Author丨Zhao Xiaoxiao
Editor丨Guan Ju
Image source丨Picture insect creativity
All the express delivery is going to sea, and they have launched their international business early, and YTO's international business was established at the latest, but it was the first to be listed.
In 2017, YTO Express acquired 62% of the equity of the listed company Xianda International Logistics for HK $1.041 billion, officially moving towards internationalization, and changed its name to "YTO Express International" a year later, and the founder Yu Huijiao became the only "chairman of a double listed company" in the express delivery industry. At this time, YTO Express has just been listed for one year.
At that time, the express price war played an oligopoly pattern, the industry and players have entered a mature period, and the era of high growth has come to an end.
In the past six years, the rapid development of YTO Express International has been accompanied by frequent changes in senior management, continuous adjustment of business direction, and slow adaptation with the lowest cost of trial and error. However, revenue still went for a continuous decline, from HK$7.556 billion in 2021 to HK$5.3 billion last year.
At the end of 2022, YTO Express International changed its name again, changing YTO Express (International) Holdings Co., Ltd. to YTO International Express Supply Chain Technology Co., Ltd., and the abbreviation was changed from "YTO Express International" to "YTO International Express", further highlighting the international label.
At the end of March this year, YTO International Express disclosed a major personnel adjustment, and Zhou Jian of SF Express became the executive president of YTO International Express, and will be responsible for the development of its international business thereafter. Zhou Jian is a veteran of the express delivery industry, he has been in Best Express for 12 years and SF Express for 3 years, and has many achievements.
Today, the wave of China's e-commerce going overseas is one of the few opportunities for express companies to go global, and the other "two links" plus Yunda, SF, and J&T are accelerating their going to sea. But for YTO International Express, the right strategy is far more urgent than speed.
Start with envy of an airplane
Among the top five express companies in China, YTO was the latest to set up its own international business, Shentong, Zhongtong and Yunda established an international sector before 2013, Best Express was in 2015, and SF Express launched its international business in 2009.
The reason is that YTO was established later than other express delivery, so in the first 10 years of the company's establishment, YTO mainly focused on the domestic market, and in just 6 years, the business volume has reached the top three in China.
In 2007, Yu Huijiao went to the United States UPS Express Company for inspection, and when he came back, he set a new strategic plan for YTO: one is to establish its own airline, comprehensive internationalization, and the other is to achieve information management. At that time, Yu Huijiao's statement was, "An express company without air is not a real express company." ”
Partnerships and acquisitions are common tactics used to expand the domestic footprint. In the years that followed, YTO partnered with a number of information technology companies and airlines to drive technological change first. In 2012, YTO built its own airline, which opened operation three years later, becoming one of only three express delivery companies in China with air transport capacity, the other two being SF Express and China Post. In that year, Alibaba also cooperated with Yunfeng Fund to invest in YTO.
In 2017, YTO acquired Hong Kong-listed Xianda International Logistics, becoming the first large-scale cross-border M&A in China's express delivery industry. After the acquisition, YTO International Express has the company's global business: corporate entities in 17 countries and regions, business in more than 150 countries and regions, 52 self-built sites, and more than 2,000 international routes.
Yu Weijiao responded at the time, "YTO has truly gone international. ”
Since then, YTO International Express has improved its logistics ecosystem, expanded routes, and opened up the international market by building a global air logistics hub, buying aircraft, starting the formation of a global parcel alliance, and international cooperation with Cainiao.
The business scope has gradually become clearer, and a one-stop business chain has been opened up from front-end order management, first-mile pick-up, warehousing, customs declaration, international transportation, to back-end customs clearance, local transportation, terminal distribution and even returns.
Expanding to more than 150 countries around the world, Southeast Asia and Australia are one of the important markets for YTO International Express.
The former has great e-commerce potential, backward logistics infrastructure, low labor costs, and a good starting volume. The latter has a large number of Chinese, the e-commerce shopping market is relatively mature, and most of the export products of China and Australia have achieved mutual exemption from tariffs, with a total trade volume of more than 220 billion US dollars, and there are more than 20,000 express companies in Australia, but there are not many specializing in Sino-Australian logistics.
In these two markets, YTO International Express has covered the most core areas, such as Sydney, Canberra, Melbourne, Cairns, Darwin and other major Chinese settlements, Southeast Asia Vietnam, Singapore, Indonesia, Thailand, Cambodia, Malaysia, the Philippines, etc.
In the past two years, YTO International Express has shifted its focus to South Asia, because enterprises from China's clothing and textiles, digital electronics, new energy vehicles and other fields are investing in South Asia with an average annual growth rate of more than 15%, which corresponds to high logistics costs, long port stays, and low container levels. This average difference has to be solved by Chinese express companies.
YTO, which wanted to buy aircraft at the beginning, now has its own aviation fleet of 13 aircraft, which is far less than SF's 97 aircraft, but in terms of internationalization, YTO is faster than SF, which is mainly concentrated in Southeast Asia, Europe and the United States, and the Middle East, South America, and Africa are just ready to try.
In March this year, after YTO International Express released last year's financial report, Yu Weijiao said that it would increase investment in international business this year, "In ten years, YTO plans to establish a global network and align with international giant express delivery." ”
Zhou Jianqiren
The biggest change so far this year has been the appointment of the new chief executive officer, Zhou Jian. Yu Weijiao attaches great importance to this appointment, revealing YTO's determination to accelerate the pace of internationalization.
Zhou Jian, 46, graduated from Huazhong University of Science and Technology with a master's degree in information processing engineering. From 2001 to 2005, he held various positions at UTStarcom China.
In 2008, Zhou Jian joined Best Group and became one of the core members of the company's start-up team.
Zhou Jian is known as "Zhou Shaoning's most trusted person" in the industry, and their earliest relationship was with a colleague in UTStarcom China. Zhou Shaoning joined Google after leaving UTStarcom and founded Best Group nine years later.
In November 2010, Best Group acquired Huitong Express to establish the express delivery division - Best Huitong Express (later renamed Best Express), Zhou Jian was appointed as the general manager, and led Best Huitong Express from the second line of express to the first echelon in 6 years, with an average daily parcel volume from 200,000 orders to more than 8 million orders.
In 2017, Zhou Jian was transferred to the general manager of the strategy and international business department of Best Group, responsible for the development of international business, and within two years, Zhou Jian led the team to set up a network in Thailand, Vietnam, Malaysia and other Southeast Asian countries.
Best Group was once favored by Alibaba, and before its listing in 2017, Ali invested in Best Group 6 times, but after the listing, Best Express has not been able to achieve profitability, and its domestic business was acquired by J&T for 6.8 billion yuan in 2021.
In March 2020, Zhou Jian resigned, and prior to that, Zhou Jian was Senior Vice President of Best Group and General Manager of Best International.
In April of the same year, SF Express established Fengwang Express, priced at 3-5 yuan, planning to erode the mid-to-high-end market of three links and one reach. After joining SF, Zhou Jian was responsible for the business related to SF's economic e-commerce express delivery products - preferential distribution, which is a special distribution service launched by SF Express for large customers in 2019.
In September 2021, Zhou Jian was appointed CEO of Fengwang Express. However, due to operational problems and wrong judgments, Fengwang Express did not bring the expected revenue to SF, but suffered its first single-quarter loss since its listing. In May 2023, J&T spent 1.18 billion yuan to acquire Fengwang Express.
In January of this year, Zhou Jian joined YTO International Express, but it was also a tricky errand.
First, since the backdoor listing, the performance of YTO International Express in the capital market has been very sluggish, and its current market value is 500 million Hong Kong dollars. Second, in the past years, YTO has focused on the air and sea trunk links, and the ability to do so in the entire cross-border logistics chain is still lacking. Third, because the demand for international air and sea freight and freight rates have fallen in the past two years, its core business air and sea freight business has declined, which is an uncertain thing that will exist for a long time.
Also unstable is the management of the company. Before Zhou Jian joined, YTO International Express had changed its presidents several times, and since 2018, it has replaced at least 5 presidents.
According to the announcement of YTO International Express, Zhou Jian's monthly remuneration is about 138,500 yuan, with an annual salary of 1.6 million, and he receives the same amount of bonus as one month's salary every 12 months of his tenure.
After Zhou Jian joined, whether he could promote the business of YTO International Express to a higher level may be known at the end of this year.
The best opportunity for China Express
Judging from today's market environment, the rapid growth of cross-border e-commerce and the digital upgrade of traditional freight forwarders are one of the few opportunities that can enable emerging express companies to go global.
The emergence of emerging e-commerce platforms such as Temu, TikTok, and SHEIN has changed the mode of going overseas, shifting from the original platform operation to the fully managed business model, and lowering the threshold for factory-based enterprises to go overseas. Mature platforms AliExpress, Shoppe, Lazada, and Ali International Station have readjusted their strategies to join this wave of e-commerce wars and get the opportunity to turn around.
Everything is growing like crazy, and business flows end up affecting logistics. UPS opened flights from Zhengzhou to the United States because Foxconn built a factory in Zhengzhou that year, and the proportion of local business dropped from 90% to less than 60%. This is the best change of frame of reference.
In 2021, SF adjusted its overseas strategy, announced that it would plan to go overseas as the company's new second curve, and acquired a 51.5% stake in Kerry Logistics, the second largest express delivery company in Southeast Asia, for HK$17.555 billion. Last month, SF Express acquired another 35.9% of the outstanding shares of Thailand's Kerry Express (a subsidiary of Kerry Logistics) for 1.4 billion yuan.
Cainiao changed its principles and announced its opening up in 2021 to pursue the second growth curve, after Cainiao only served Alibaba's internal cross-border e-commerce platform. At Cainiao's open day in July 2022, Cainiao CEO Wan Lin said that international business will be one of Cainiao's core businesses in the future.
"Three links and one reach" has found the core positioning in international business, following Chinese enterprises to go global, focusing on cross-border business, improving its ecosystem through investment and cooperation, and achieving business coverage in more countries.
Also expanding in the same way is the Polar Rabbit. In 2019, J&T obtained a license to operate China's express delivery business through the acquisition of Longbang Express, and a year after entering the Chinese market, it acquired and integrated Best Express for 6.8 billion yuan, greatly improving its infrastructure, raising the production capacity ceiling and obtaining orders for Tao e-commerce.
When the market has been rising, the company gets continuous positive feedback.
Last year, Temu's GMV reached $18 billion, TikTok's annual revenue in the U.S. was $16 billion, and SHEIN's profit exceeded $2 billion. AliExpress orders increased by 60%, Lazada's loss per order continued to narrow year-on-year, and the two platforms drove Alibaba's international business revenue in the December quarter to increase by 44% year-on-year to 28.516 billion yuan, becoming Alibaba's fastest-growing business segment.
During the same period, Cainiao handled more than 1.5 billion cross-border e-commerce parcels, ranking first in both China's outbound and Chinese inbound e-commerce logistics, and international business revenue accounted for 47.4% of Cainiao's total revenue. In the first half of 2023, Shentong International has turned losses into profits, and Best International's revenue last year was 947 million yuan, and the daily volume of cross-border delivery orders has exceeded 50,000. J&T has become China's fifth-largest express delivery company in just three years, with annual revenue of US$8.849 billion, an increase of 22%.
The total revenue of YTO International Express and SF International has declined to a certain extent, mainly due to the change in air and sea freight prices, which is one of its core businesses, but only in terms of international express and parcel services, the revenue and business volume of the two express companies are growing trends.
Ten years ago, China's express delivery to the sea was a different scene.
In 2009, SF Express launched its network in Southeast Asia, and four years later, Yunda International, Zhongtong International, Shentong International, and Best International were established successively and gathered in Southeast Asia. Almost at the same time, Southeast Asia's local logistics J&T launched in Indonesia.
In the past ten years, SF's business volume has only reached 3.5 million, while the daily order volume of UPS in the United States has been about 20 million in the same period. At that time, SF Express could not keep up with the volume of goods in the Southeast Asian market for a long time, and it lost money every day, and finally had to shut down the network. Other express delivery is operating at low cost, and has been in the testing stage for a long time, with many losses. On the contrary, J&T's business boomed after entering China.
The reason is that the business flow has not formed a certain scale, which is a problem that is difficult to solve even if more infrastructure is invested. Secondly, the chain of cross-border logistics is very long, which is a very complex process, which tests the operational ability behind it, with large investment and high cost.
These problems have all been solved today. Global cross-border e-commerce is still growing rapidly, and under China's strong supply chain capabilities, mechanical and electrical products, new energy vehicles, medical devices, consumer electronics and semiconductors with high added value and high barriers have become a new direction for Chinese express delivery companies to explore.
In January this year, the price war in China's express delivery market resumed, and Yiwu's single ticket revenue fell to 2.5 yuan, surpassing the price war caused by J&T when it started online in 2021, which was a record low.
Last year, China's express delivery business volume was 110 billion pieces, with an overall income of 1 trillion yuan, and the express delivery business volume in the United States was only more than 20 billion pieces, but the overall revenue was about 1.5 trillion yuan, which was 1.5 times that of the domestic market.
China Express goes to sea, waiting for the best time.