Securities Times reporter Wang Xiaowei
"The fierce competition in the field of instant delivery in the same city has basically come to an end, and the trend of the competitive landscape under differentiated positioning has begun to appear." This is the new judgment given by Du Shangbian, vice president of Flash Delivery, in an interview with a Securities Times reporter on the 12th.
This means that the real-time distribution track, where various factions have been rushing to the beach in the past few years, is entering a new stage.
On the one hand, the leading enterprises participating in urban real-time logistics services have gradually formed their own differentiated positioning; on the other hand, the development direction from "delivering food" to "delivering everything" has become clear.
However, the difficulty of making money is still an important issue facing this 100 billion-level market.
Under the B2C model, SF Express and Dada's annual losses are still at the level of 100 million yuan or even 1 billion yuan, thus forming a contrast between "hot primary market and cold secondary market" in terms of capital sentiment.
In addition, some C2C platforms are moving towards break-even, and how to solve the problem of scale has become a new challenge.
From the perspective of the express delivery industry with the largest market scale, a new trend is emerging from "cross-city" to "same-city", which brings new opportunities to the express delivery market and the pre-warehouse industry chain, as well as an increase to the instant delivery market.
How will the major participants change with the trend?
Where does the second curve sword point?
How does regulation promote orderly competition in the industry?
These have become new topics on this track.
The duel between giants and grassroots
Guo Chaodong (pseudonym), a logistics expert who has worked in the postal system for many years, told reporters that in recent years, the growth rate of consumer scale and order volume in the instant delivery industry has slowed down, and the overall situation of the industry has gradually entered a mature development stage from the early rapid growth model.
This has become the meso background for each leading enterprise participating in the urban real-time logistics service to form their own differentiated positioning.
In 2015, the order volume of the instant delivery market doubled year-on-year, and the transaction volume also exceeded 10 billion yuan, which also led to the financing boom in the track around 2015.
Before and after, as the "last mile" of the logistics industry, intra-city instant courier has welcomed many participants, including food delivery and delivery businesses established by local e-commerce companies such as Meituan and Ele.me, as well as food delivery services represented by SF Express. Courier giants, as well as "grassroots" independent third parties such as Flash Delivery without any traffic background and UU errands from Zhengzhou, jointly form the arteries of the urban logistics microcirculation market system.
Since the last century, express delivery companies represented by "three links and one delivery" have come out successively.
Why has the smoke war of instant delivery been ignited in recent years?
Duchampi believes that it is related to three subjective and objective factors.
The first is technical reasons. In particular, the new generation of information technology represented by 4G has rapidly lowered the cost of communication, enabling various platforms to respond quickly to market demands.
The second is the reason for demand. With the development of takeaway and new retail industries, the demand for instant logistics, which is faster than traditional express delivery, has exploded.
The third is driven by the trend of personalized consumption. Following the emphasis on social networking (such as offline dinner parties) and light social interaction (such as WeChat communication), "moderate social networking" has risen.
"For example, after the flash delivery, if a person picks strawberries, they can share it with friends within 1 hour."
This has also formed the continuous iteration of express logistics.
In Du Shangyu's view, 1.0 is a traditional express service model that relies on e-commerce; 2.0 is a self-built warehousing model represented by JD.com, which can deliver orders in the morning and afternoon; 3.0 is around 2015. With the growth of new retail and takeaway demand, it is more immediate than the previous stage, and one-hour delivery is achieved through the close cooperation of business flow and logistics.
It is worth noting that after many years of silence, with the fierce competition of the aforementioned participants basically coming to an end, capital once again ushered in the peak of beachcombing.
In December 2021, SF Express will be listed on Hong Kong stocks, with a total market value of around HK$13 billion.
In addition, Shansong completed a D++ round of financing of more than 125 million US dollars last year, and Xiaomi Lei Junshunwei Capital and others re-entered the market; UU errands also received hundreds of millions of B+ rounds of financing from 58 industry funds, which were dubbed by the market as local living with investors. New expectations for synergy.
Guo Chaodong told reporters that for the real-time logistics market in the same city, the market and capital will pay attention to it every two or three years, because the market competition pattern is constantly changing.
"Take 2020 as an example. At that time, Alibaba's Cainiao Network wholly acquired Dian Wo Da, SF Express tested the water for group meal delivery, Dada went to the United States to submit an IPO prospectus, and many new changes in the logistics market brought about by the epidemic. In the near future, the market is paying attention to this track again, because the leading companies have basically formed a differentiated positioning."
The stable trend of this competitive landscape not only extends the tentacles of traditional logistics services, but also promotes the innovation of business models and drives the turbulence of the entire business chain.
Hu Da Restaurant is the most famous restaurant specializing in crayfish in the Beijing area.
According to company insiders, the most important point of company expansion is location selection, because it will directly affect passenger flow.
However, as the instant delivery service expands the area radius of supermarkets and restaurants from the past 1,000 meters to 3-5 kilometers, the company's human efficiency, floor efficiency and commodity efficiency have all improved.
Common challenges in the 100 billion market
On the one hand, instant delivery breaks the constraints of business time and space for offline merchants, and on the other hand, completes the closed loop of O2O business flow for online merchants, and also expands the consumption radius of C-end consumers.
According to data from iResearch, among the multi-party links, the industry scale has exceeded 131.3 billion yuan as early as 2019.
However, in this 100 billion-level market, the difficulty of making money has become a common challenge faced by all players.
Taking SF Express as an example, the net profit loss from 2018 to 2021 will expand year by year, with losses of 300 million yuan, 400 million yuan and 700 million yuan respectively.
Therefore, although the cyclical financing in the primary market is hot, the funds in the secondary market do not buy it, and the company's stock price is hovering at the breaking point.
"Loss is a common problem faced by all players." Guo Chaodong told reporters that although the real-time delivery chassis in the same city is stable, and there is no need to worry about demand, since the birth of this track, it has faced the dilemma of scale and cost.
The scale effect is difficult to form, and it mainly refers to categories other than the high-frequency rigid demand for non-takeaway food delivery, especially the personal delivery connected to the C-end. Due to the high dispersion, immediacy and personalization of demand, personal delivery is completely different from the standardization of takeaway delivery. How to meet customer needs is difficult.
In addition, it requires a lot of money to deploy transportation capacity, which also means huge subsidies. The difficulty of scale has always been the sword of Damocles hanging on this track.
Guo Chaodong analyzed that the difficulty of C2C profitability is that "non-standard" means that it is difficult to scale.
Because the C2C market faces both the randomness of demand and the non-standard capacity of transportation, for example, the delivery staff to deliver equipment, choice of means of transport, and required delivery skills are completely different.
Both sides will increase the operating cost of the platform.
"Traditional express delivery platforms are all cost-oriented, and this model needs to quickly make large orders in order to minimize costs. Therefore, there is an 'abnormal' phenomenon that even intra-city delivery needs to be turned around at the transit station. However, intra-city instant delivery platforms usually cannot improve efficiency and reduce operating costs through capital expenditures such as fixed assets, which in turn brings savings in performance costs. Especially in the C2C mode, such as the market that Flash Delivery enters, it is through one-to-one, Point-to-point instant delivery, in order to satisfy consumers when they are most anxious to solve key problems, which determines its business model is to focus on timeliness rather than price.”
The distribution under the B2C model is dominated by business districts, and the competition is fierce, and the leading companies are all profitable.
In this regard, SF Express told reporters that the company will focus on achieving long-term performance in the fast-growing market, and will continue to focus on expanding its customer base and service network, rather than seeking immediate financial returns or profitability.
In contrast, C2C is showing another scene.
The Flash delivery side told reporters that before the flash delivery, C2C instant delivery was a track that no one at home and abroad had set foot on. Therefore, in 2015, the flash delivery carried out a profit verification of the business model, and the verification result at that time was that the annual profit could be achieved.
Judging from the company's operations in recent years, "it is in a good state."
This is obviously not unrelated to the higher unit price.
So, will the instant delivery track also have the catfish effect brought about by the introduction of the polar rabbit in 2021?
Guo Chaodong believes that it is unlikely.
"At present, the differentiated competition pattern of each platform has been formed, especially for the C2C platform, the algorithm models on both sides of the capacity and demand need to be accumulated for a long time, and thus a first-mover advantage has been built. Flash and Jitu can be regarded as two extremes. .Pinduoduo and Jitu are completely cost-oriented; Flash Delivery tends to be quality-oriented.”
Capacity: High Costs and "Reservoirs"
The cost of transportation capacity is the absolute largest part of the operating cost of the instant delivery platform.
"Currently, the most active riders are flash delivery, while SF Express riders in the same city are the most sticky." Guo Chaodong told reporters that this part of the cost is difficult to save.
Especially as the State Administration for Market Regulation and other departments require the protection of riders' rights and interests, related costs may still rise in the future.
A person close to the flash delivery revealed to the reporter that at present, there are 1.5 million flash delivery personnel licensed by the platform, and 80% of the company's operating costs will be given to the transportation capacity, and the remaining proportion will be given to customers to subsidize and retain the company's operations.
At the same time, some people close to SF Express pointed out that companies in the industry usually refer to the sum of labor outsourcing costs and employee welfare costs related to riders as "performance costs", and the cost of SF Express roughly accounts for more than 95% of operating costs. .
Du Shangyu told reporters, "Under the huge capacity, many orders have a story behind them. For example, a considerable proportion of the couriers who can receive orders rely on full-time couriers to survive. There was once a courier who came to Beijing alone. At first, I could only sleep in my own sleeping bag every night, but now I have done it little by little, making money, freedom and happiness."
In addition to capacity, one of the main costs is technology investment.
This is related to the fact that under the outsourcing model, the instant distribution platform will not choose a heavy asset operation model.
According to the State Intellectual Property Office, Beijing Tongcheng Bing Technology Co., Ltd. applied for a patent in 2018 called "Order Distribution Method, Device, Server and Storage Medium", which can realize the receiving of orders based on the delivery staff. Single-will, evenly distributes the orders to each flash courier, and uninterruptedly pushes orders to each flash courier according to the priority order of each flash courier's assigned orders.
This has become a refractor for the C2C model to solve the "non-standard" dilemma - using data to solve the problem of standardization.
Du Shangyu introduced that by labeling and digitizing the supply side, and then matching the most suitable flash delivery personnel with the help of background algorithms.
"From the point of view of the distribution of delivery personnel, in the 1.0 era, the default is the shortest door-to-door time. In the 2.0 era, matching dimensions such as average speed and customer distribution differentiation have been added. In the 3.0 stage of rapid increase in order volume, Flash Delivery is committed to individual The optimal demand goes to the regional optimal.”
The express industry turns to "the same city is king"
With the opening of business flow and information flow, many platforms can predict customer needs in advance, and many goods can be placed in front warehouses in advance.
As a result, a new trend of "cross-city business" to "same-city business" is emerging in the express delivery industry.
Du Shangyu believes that how to optimize the express delivery business in the same city may also change the traditional mode of transit in the same city in the future.
This new trend is having three important implications.
First of all, it will bring about the growth of the bulk logistics express market.
Taking Aneng Logistics, which has recently landed in Hong Kong stocks, as an example, the company's total cargo volume will grow at a compound rate of 31% from 2015 to 2020, of which the daily cargo volume in 2020 will be 38,400 tons, the peak daily cargo volume will exceed 50,000 tons, and the annual LTL volume will exceed 50,000 tons. The cargo volume also exceeded 10 million tons for the first time.
Secondly, pre-storage storage such as large warehouses around the city and small warehouses in the city (including independent construction and third-party warehouse construction) will also usher in great development.
In addition, the structure of express delivery business is also expected to usher in a major adjustment, and the proportion of the same city will increase.
In addition, it will also bring new opportunities to the instant delivery market under the new ecology.
Guo Chaodong said that e-commerce platforms such as JD.com and Taobao have successively launched one-hour delivery services, which are based on existing retail stores on the one hand, and front-end warehouse layout on the other hand.
From the perspective of distribution, the proportion of logistics services relying on real-time distribution will become larger and larger in the future.
For instant delivery, the future incremental space does not stop there.
Guo Chaodong said that on the one hand, intra-city instant delivery connects C-end consumers and has the potential to extend the value chain to the consumer Internet; on the other hand, it connects B-end manufacturers and service providers, and has the potential to extend the value chain to the Industrial Internet.
Therefore, the business of instant delivery in the same city has incremental value space to be tapped on both the C-side and the B-side.
"On the whole, the express delivery industry is experiencing diversion." Guo Chaodong believes that one direction is represented by instant delivery, and the speed of logistics services is getting faster and faster.
The other direction is represented by Ji Rabbit, which is going in a slower direction under the guidance of cost.