express delivery companies no longer want to engage in price wars?
2024-09-01
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china business news (reporter jiang yongxia)recently, major express delivery companies have successively announced their financial reports for the first half of 2024. most companies have achieved double growth in revenue and net profit, and the business volume has achieved full growth. the continued expansion of the scale of the express delivery industry has shown a strong momentum of development.
behind the growth, there is also the risk of "decline". from the financial reports, the single-ticket revenue of major express delivery companies has declined to varying degrees, and the industry has not yet gotten out of the vortex of "trading price for volume". however, the attitude of express delivery companies towards the low-price strategy has begun to change, and even some "tongda" express delivery companies want to "tear off" the low-price label. however, in a market environment where service and price are the key factors, it is not easy for express delivery companies to get out of the "price war".
staff are sorting a batch of express parcels. (photo provided by cnsphoto)
the scale of express delivery continues to grow
as of august 30, the financial reports of the "tongda" listed express delivery companies in the first half of 2024 have all been disclosed. the reporter selected the financial reports of several representative express delivery companies, including sf express, yto express, yunda express, sto express, zto express, and jitu express, for sorting and summarizing.
judging from the financial reports, the operating income growth rates of the above-mentioned express delivery companies all increased; in terms of net profit, except for zto express, whose growth rate declined, the net profit growth rates of other express delivery companies continued to increase.
in the first half of 2024, sf express achieved revenue of 134.4 billion yuan, a year-on-year increase of 8.1%; net profit attributable to the parent company was 4.81 billion yuan, a year-on-year increase of 15.1%. yto express achieved operating income of 32.565 billion yuan, a year-on-year increase of 20.61%; net profit attributable to shareholders of listed companies was 1.988 billion yuan, a year-on-year increase of 6.84%. yunda express achieved operating income of 23.252 billion yuan, a year-on-year increase of 7.78%; net profit attributable to shareholders of listed companies was 1.041 billion yuan, a year-on-year increase of 19.8%. zto express's cumulative revenue was 20.686 billion yuan, a year-on-year increase of 10.5%; net profit attributable to ordinary shareholders was 4.038 billion yuan, a year-on-year decrease of 4.1%.
the financial performance of sto express and jitu express is particularly impressive. according to an announcement released by sto express, the company achieved operating income of 21.569 billion yuan in the first half of 2024, a year-on-year increase of 13.01%; the net profit attributable to shareholders of listed companies was 437 million yuan, a year-on-year increase of 100.17%. in the first half of 2024, jitu express's revenue was 4.86 billion us dollars, a year-on-year increase of 20.6%; among them, express service revenue was 4.74 billion us dollars, a year-on-year increase of 33.7%. in addition, the net profit turned from loss to profit, with a profit of 31.026 million us dollars, compared with a loss of 670 million us dollars in the same period last year; the gross profit in the first half of the year was 540 million us dollars, a year-on-year increase of 176.8%.
the business scale of these express delivery companies continues to expand. in the first half of 2024, sf express completed a total business volume of 6.21 billion tickets, a year-on-year increase of 6.5%. yto express completed a total business volume of 12.203 billion pieces, a year-on-year increase of 24.81%. yunda express completed a total business volume of 10.924 billion tickets, a year-on-year increase of 30.02%. sto express completed 10.227 billion pieces of express business, a year-on-year increase of 32.47%. zto express's parcel volume in the first half of the year was 15.62 billion pieces, a year-on-year increase of 11.8%. jitu express's global parcel volume reached 11.01 billion pieces in the first half of the year, a year-on-year increase of 38.3%.
data from the state post bureau show that in the first half of 2024, my country's postal industry's express delivery business volume totaled 80.16 billion pieces, a year-on-year increase of 23.1%; express delivery business revenue totaled 653 billion yuan, a year-on-year increase of 15.1%.
it can be seen that in the first half of 2024, the scale of my country's express delivery industry continued to expand, and the industry development momentum was strong.
the market generally "trades price for volume"
however, it is worth noting that, despite the growth in business volume, the revenue per ticket of most express delivery companies has dropped significantly. low-price competition is still the main theme of the express delivery industry.
data shows that in the first half of 2024, the revenue per ticket of yto express was 2.34 yuan, a year-on-year decrease of 3.95%. the revenue per ticket of yunda express was 2.08 yuan, a decrease of 0.37 yuan per ticket compared with the same period in 2023. the revenue per ticket of jitu express is also declining. the revenue per ticket was 0.34 us dollars in the first half of last year, and it dropped to 0.32 us dollars in the second half of this year. judging from the monthly operating data in the first half of this year, the revenue per ticket of sf express and sto express also showed a downward trend.
regarding the decline in per-ticket revenue, sf express pointed out in its 2024 financial report that consumers' emphasis on shopping cost-effectiveness will prompt companies and merchants to seek to further reduce express logistics costs, and the per-ticket revenue of major express companies declined in the first half of the year. intensified market competition has prompted express companies to continuously reduce costs and increase efficiency, and provide more competitive services and pricing on the basis of balancing revenue and profitability to win more market share.
in the current highly competitive market environment, "price for volume" still plays an important role in competing for market share.
in the first half of 2024, jitu express quickly expanded its business scale and achieved profitability, and the "price-for-volume" strategy played a key role. as a rising star in the express delivery industry, jitu express can be described as a dark horse. with the rapid development of social e-commerce, jitu express swept the market with ultra-low prices, and the madness of "losing money on every delivery" put tremendous pressure on other express delivery companies. the low-price strategy also helped jitu express to quickly open up the market and accumulate resources. jitu express's 2024 first-half financial report shows that in the chinese market, jitu express's parcel volume reached 8.836 billion pieces, a year-on-year increase of 37.1%; the market share was 11%, an increase of 1.1 percentage points year-on-year.
in order to maintain their market share and gain additional growth, other express delivery companies continue to compete with low prices. especially now that e-commerce has begun to raise prices, express delivery, as an important part of e-commerce, has also been caught up in it, and express delivery companies have to further find ways to lower the price of express delivery.
can we avoid price wars?
in terms of increasing business volume and market share, the low-price strategy has indeed made an indelible contribution, but blindly engaging in "price wars" is not conducive to the high-quality development of the express delivery industry. so, can express delivery companies avoid "price wars"?
indeed, some express delivery companies have come out and said that they no longer want to engage in a "price war".
lai meisong, founder, chairman and ceo of zto express, said during the release of the financial report that zto hopes to break out of the "tongda group" in terms of brand awareness and customer satisfaction and further expand its advantages in profit growth.
lai meisong said: "although the express delivery industry's business volume has maintained a rapid growth, competition is still fierce and the industry as a whole is under great pressure." he also pointed out that although price fluctuations in "grain-producing areas" (areas with relatively concentrated express delivery business volume, such as yiwu, jieyang, guangzhou, etc.) are still fierce, the bidding space of cost addition and subtraction is close to the bottom line, and the express delivery industry as a whole must truly move from high quantity to high quality.
the market is not optimistic about the growth achieved by jitu express by "trading price for volume". it is reported that the stock price of jitu express has continued to fall, and its market value has evaporated significantly since its listing. jitu express also sensed the crisis and tried to tap new growth points in addition to playing the low-price card. in its financial report, jitu express stated that in the chinese market, jitu express is exploring non-e-commerce platform customers to find new package growth.
although the attitude of express delivery companies towards "price war" has changed, in the fierce market competition, no one will be the first to throw away this weapon. a senior practitioner in the express delivery industry told reporters that although all companies shouted that they did not want to fight a "price war", in fact, they were all working hard to improve efficiency, reduce costs, and gain price advantages. "in the past two years, zto express has been the most aggressive company in the industry in the "price war", which has also allowed it to gain a larger market share." the person also said that yunda express and sto express, which have lagged behind in development in the past two years, also want to win back their market share with low prices.
at present, the "tongda group" is facing severe homogeneous competition, and prices are almost linked to market share. whoever has the lowest price will get the most traffic. at this time, who dares to give up the low-price strategy?
the above-mentioned person believes that although express delivery companies want more profits, they will not give up on prices and will grit their teeth and hold on. however, the current "price war" will balance other factors and will no longer "lose money to gain publicity."
zhao xiaomin, ceo of guanshuo capital and express delivery expert, also said that express delivery business "below cost or at a loss" is no longer within the company's consideration.
zto express, which has long called for a break away from the "tongda group", has become more cautious in its transformation strategy after experiencing a slowdown in business volume growth and a decline in market share.
“business volume is not secondary, it helps achieve economies of scale,” said yan huiping, chief financial officer of zto express. “we are constantly exploring between weighing risks and opportunities, with the goal of achieving a reasonable profit level and maximizing value.”
