While the incremental market brings new changes to the industry ecology, in 2020, the single ticket prices of major express enterprises continue to decline, and the price war is still in full swing.
Data shows that in the first 10 months of this year, the total number of express delivery in China reached 64.38 billion, an increase of 29.6% over the same period last year. However, the increase in the number of express delivery does not necessarily translate into revenue growth. In the first 10 months of this year, the total revenue of Chinas express industry increased by 16.5% year-on-year to 690.98 billion yuan, but still lower than that of last year.
Recently, Shunfeng holdings, Shentong express, Yunda shares, Yuantong express and other express companies have announced the October express service business operation briefing.
Specifically, in October, SF holding Express single ticket income was 17.50 yuan, down 14.68% year-on-year. Yunda stocks single ticket income was 2.18 yuan, down 32.72% year-on-year; Shentong expresss single ticket income was 2.25 yuan, a year-on-year decrease of 20.21%; Yuantong Express single ticket income was 2.14 yuan, a year-on-year decrease of 23.17%.
Compared with last year, the single ticket income of the above-mentioned express companies in October all dropped significantly, with a drop range of 20% to 30%.
Under the price war of old express enterprises, the entry of new players aggravates the intensity of the war to a certain extent. Since 2020, Jitu express, Jingdongs Zhongyou express and Shunfengs Fengwang have joined in.
In this regard, GUI Haoming, chief market expert of Shenwan Research Institute, told reporters that the express industry has entered the period of oligopoly. In order to further seize the market share, the major express companies have launched all-round competition, including the delivery of coupons, which leads to the reduction of customer price. This situation will continue at this stage.
However, GUI Haoming believes that from the perspective of comprehensive cost, there is little room for further substantial price reduction. The competition of express delivery should focus on quality, service and convenience. Only in this way can we attract customers and ensure reasonable profits for enterprises.
In view of the price war, Lai Meisong, founder of Zhongtong, said recently that from the perspective of the trend, especially from the perspective of cash flow, the price war is coming to an end, and the industry has reached the limit of affordability, because everyone wants to make profits, especially the franchise mode, which requires the headquarters to protect the franchisees and ensure the normal operation of the last kilometer delivery and collection.
Focus on internal repair enterprises
We believe that a long-term price war is not good for anyone, especially the price sensitivity of franchisees, which will lead to unsustainable price competition in some markets. We are speeding up the speed of gaining market share, maintaining a reasonable leading edge while maintaining a certain profitability. Lai Meisong, founder of Zhongtong, said recently.
Zhou Shaoning, chairman and chief executive officer of Baishi group, said recently in the companys three quarter report that the current market environment is full of variables. Fierce market competition and downward pressure on prices have affected the overall operation of the group. Baishi is actively carrying out strategic adjustment and organizational change, focusing more on its main business with logistics as its core.
The express industry takes quantity as the king, and can gain more market share through price war, in which the cost advantage can be said to be the key of price war competition.
At present, the main costs of express enterprises include transshipment cost, transportation cost, packaging material cost and distribution cost. Among them, transshipment and packaging materials are rigid costs, which are related to the production capacity and technology of express delivery enterprises, while the delivery fee is flexible cost.
The relevant person in charge of Debang shares told reporters that there is still a large space for improvement in the efficiency of each link of collection and transfer dispatch. In the receiving and dispatching process, with the rapid increase of express delivery volume, the front-end per capita receiving and dispatching efficiency has been steadily improved, and the gross profit rate of express business has been gradually repaired; in the transportation link, when the volume of goods is insufficient, line to line delivery cannot be realized, and the cost of self owned vehicles is high, while the increase in the volume of goods makes the company change part of the external vehicles into its own vehicles, and effectively reduce the transportation costs through the measures such as changing the small cars to the large ones In this section, the fixed cost and labor cost such as rent are diluted by improving the automation rate and capacity utilization rate.
Fine management plays an important role in the success of express enterprises. According to the adjustment of business direction, the change of customer group and the property of goods, deppon has customized precise coping strategies and strategic objectives. The person in charge mentioned above.
Yuantong Express has also adjusted its strategic focus to cope with this years business peak. Yuantong related person in charge told reporters that the two core strategies of the company this year are basic capacity building and comprehensive digital transformation. The company makes efforts from two aspects of hardware and software. It is reported that since this year, Yuantong has expanded 36 transfer centers and installed new automation equipment. At the software level, Yuantong has independently developed a series of digital tools to improve work efficiency.
In the view of relevant persons in charge of Yunda shares, the improvement of service quality will help express enterprises to further expand their market share, which has reached 18% at present.
In recent years, the company has continuously invested in equipment automation and informatization, and has formed certain advantages in improving operation efficiency, improving operation accuracy, improving the whole process efficiency and continuously reducing the single ticket operation cost. Based on this, the companys service quality has also been steadily improved. According to the October data released by the State Post Office, Yunda is only 0.003 among the major express companies, which is far lower than the industry average of 0.16. The person in charge told reporters.
Accelerating industry integration
According to the data of China Business Industry Research Institute, in 2019, the market share of the top five express companies in China is more than 70%, while in the United States, the market share of the top two express companies is more than 75%.
In the past, Chinas express delivery industry has not been differentiated. Everyones share is similar, but it cant be so uniform all the time. This year, the leading enterprises are also in the process of differentiation. With the differentiation of market share and the difference of comprehensive strength, express companies with a market share of 30% will be born in the future. This is an inevitable process and result. Lai Meisong said in a recent conference call to the third quarter.
According to the data, in the first 10 months of this year, the market shares of Yunda shares, Yuantong, Shentong and Shunfeng were 17.18%, 14.94%, 10.63% and 9.88% respectively, reaching 52.63% in total.
Lai Meisong also said that the postal express industry in the United States and Japan has also come through this way. The price depends on the market environment. The production capacity of each enterprise is related to the volume released by the market. With the process of differentiation, the price war will slow down and even a price inflection point will appear.
In the view of Zhou Xibing, enterprise strategic analyst and founder of fortune bookshop, in the future, the oligopoly of express delivery industry will certainly appear. He believes that the future level of science and technology is the main competitiveness of express enterprises. First of all, through unmanned logistics, unmanned delivery and other means to improve operational efficiency. Second, the integration of blockchain and artificial intelligence of the whole set of Internet of things system, improve the level of automation. Third, through the express enterprises own logistics trains, airplanes, cars and other vehicles for automatic delivery, the number of couriers will be greatly reduced, and it can almost be achieved that there is only one courier in a community, or only one in multiple communities. Shanxi Securities said that on the one hand, the online consumption potential is continuously released, the sinking market continues to provide increment for the industry, and the scale of the express industry is expected to grow steadily and high; on the other hand, the express industry has cleared up its production capacity, accelerated the integration of the industry, and the advantageous enterprises have long-term investment value. In the view of many industry insiders, the current low price competition of express enterprises will continue for a period of time, until the formation of an absolute monopoly market pattern. Source: Securities Times Author: Chen Jing, Cao Chen, editor in charge: Wang Xiaowu_ NF
Shanxi Securities said that on the one hand, the online consumption potential is continuously released, the sinking market continues to provide increment for the industry, and the scale of the express industry is expected to grow steadily and high; on the other hand, the express industry has cleared up its production capacity, accelerated the integration of the industry, and the advantageous enterprises have long-term investment value.
In the view of many industry insiders, the current low price competition of express enterprises will continue for a period of time, until the formation of an absolute monopoly market pattern.