News from our newspaper (Reporter Ma Jing) On the eve of "Double 11", major news came from the express delivery industry.
Yesterday, Jitu Express and Best Group jointly announced a strategic cooperation intention. Jitu Express will acquire Best Group’s express delivery business in China at a price of approximately RMB 6.8 billion.
Best Group’s transfer of its domestic express delivery business to Jitu Express is closely related to its own poor operating conditions.
Best Group’s main sources of income are express and express delivery, and it has been at a loss in recent years.
According to the financial report, Best Group's full-year operating income in 2020 will be 30 billion yuan, a year-on-year decrease of 7.3%.
Among them, the annual operating income of Best Express and Best Express in 2020 will be 19.42 billion yuan and 5.16 billion yuan respectively.
The annual gross profit of Best Group was 240 million yuan; the net loss was 2.051 billion yuan; in the first half of 2021, Best Group had a half-year revenue of 13.871 billion yuan and a net loss of 1.085 billion yuan.
Best Group once stated in its financial report that the sharp increase in net loss in 2020 and the pressure on operating cash flow are mainly due to the negative impact of the epidemic in the first quarter of 2020 and the fierce market competition in the express industry and China’s freight service market. Service prices have created tremendous downward pressure.
In the first half of this year, the total volume of express delivery services nationwide was 49.39 billion, a year-on-year increase of 45.8%.
The growth rate of Best Express business volume lags behind that of the industry, and its market share in the first half of the year has further dropped to 8.2%.
In recent years, under the background of increasingly fierce competition in the domestic express market, Best Express has been at a disadvantage. However, Jitu, which entered the Chinese market last year, has further intensified industry competition with its "ultra-low price" strategy, and the price of the express industry has been further lowered. , The profit margin of enterprises is further reduced.
However, with regard to the price war in the express delivery industry, the supervision has been a red light.
On April 9 this year, the Yiwu Post Office punished two express delivery companies, Jitu and Best, for low-price dumping, and some of the distribution centers of these two express companies in Yiwu were also suspended for rectification.
The State Administration of Market Supervision also issued the "Administrative Penalties for Pricing Illegal Acts (Revised Draft)", and the market chaos caused by price wars in the express delivery industry is also within the scope of supervision.
Some analysts believe that China's express delivery price war has ushered in an "inflection point."
Through integration and reorganization, Jitu's network processing capabilities will be strengthened, which is expected to enhance its market competitiveness and reduce disorderly competition in the industry.
After Best’s domestic express delivery business is transferred to Jitu, it can better focus on the development of express, supply chain, and international businesses, and transform the international supply chain platform.
Fan Suzhou, CEO of Extreme Rabbit Express, said: "Best Express has accumulated many years of industry experience, has a good infrastructure and excellent network resources for franchisees. The complementary advantages of this acquisition can optimize the terminal network layout of the two parties in the Chinese market and promote the network. Refined operations provide customers with better services and promote the healthy growth of the industry."