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our reporter wu jing and lu zhikun reported from beijing

after four years of planning, the listing of bingex limited (hereinafter referred to as "bingex") has finally made new progress.

in july this year, the official website of the china securities regulatory commission disclosed the filing notice for listing in the united states. on september 13, shansong officially submitted a prospectus to the u.s. securities and exchange commission and plans to list on nasdaq.

a reporter from "china business news" learned that the one-to-one delivery service provided by shanshuang had been favored by investment institutions before. the company revealed its listing plan in 2020, but was later taken over by dada group (dada).

today, the instant delivery market has undergone profound changes. the boundaries of instant delivery services are constantly blurring. there are many competitors. flash delivery, which lacks the background of a giant and a stable traffic entrance, faces multiple challenges.

large scale, difficult to make money

shanshuang is a city-wide instant delivery service provider. it is understood that the intra-city instant delivery business is a logistics model born with o2o (online to offline), which can achieve a delivery time of about one hour. near-field e-commerce companies such as important documents and catering are the main service targets of the intra-city instant delivery market. .

from the perspective of user scale, iresearch data shows that between 2014 and 2020, the number of instant delivery users in my country increased from 124 million to 506 million. according to statistics from the sullivan report, the order scale of china's instant delivery industry will reach approximately 40.88 billion orders in 2023, a year-on-year increase of 22.8%. it is expected that by 2028, the market size will reach 81.31 billion orders, maintaining an annual average of 14.7% in the next five years. number growth.

different from the instant delivery needs of catering takeout, supermarkets and fresh food in batches, shanshuo focuses on providing "small but refined" one-to-one exclusive express delivery services.

if we look specifically at this market, according to data from iresearch, based on revenue in 2023, shanshou accounts for approximately 33.9% of china's independent one-to-one express delivery service market. however, judging from the scale of the entire instant delivery market, one-to-one delivery services only account for 4.6%.

in 2021, 2022, 2023 and the six months ending june 30, 2024, 2.7 million riders brought 159 million orders, 213 million orders, 208 million orders and 138 million orders to shanshuang respectively. volume, the corresponding revenue was 3.04 billion yuan, 4 billion yuan, 4.5 billion yuan and 2.284 billion yuan respectively.

however, such a large-scale flash delivery has not yet shown scale effects. the prospectus shows that in 2021 and 2022, shansong had net losses of 291 million yuan and 180 million yuan respectively. in 2023, it relied on government subsidies to barely achieve profitability. the operating profit related to operating conditions was 11 million yuan, and the net profit margin that year was only 2.43%.

this is related to the labor-intensive nature of flash delivery, which relies on large amounts of human resources. it is understood that it uses a "crowdsourcing" model to hire riders from third parties. such riders are equivalent to "part-time" rather than "full-time" delivery. although this helps flexibly respond to market demand fluctuations, it also brings challenges in rider loyalty and liquidity management. in order to ensure that it can quickly respond to sporadic customer needs, flash delivery generally needs to provide higher commissions to attract more riders to take orders, so the cost is also higher.

the prospectus shows that rider costs are the most important cost expenditure of shanshuo. from 2021 to 2023 and the first half of this year, the remuneration and incentives paid to riders by shanshuo accounted for 90.5%, 90.3%, 87.8% and 85.4% of its revenue respectively. . during the period, the gross profits were 189 million yuan, 259 million yuan, 395 million yuan and 257 million yuan respectively, and the gross profit margins were 6.2%, 6.5%, 8.7% and 11.3% respectively.

many people enter the game

flash delivery was founded in 2014, when the instant delivery market was still in its infancy and consumers were not familiar with this emerging delivery method. at that time, this innovative model still attracted the attention of investors. before this submission, shansong had completed eight rounds of financing, with investors including matrix partners china, cdh investments, sig haina asia, shunwei capital and other star capitals.

in 2020, shanshuo, whose business model has gradually matured, revealed its listing plan to the market. however, due to factors such as the market environment at the time, the company's own financial situation, regulatory policies, and fierce industry competition, the listing failed that year. on the contrary, dada group was successfully listed on nasdaq in june 2020, becoming the "no. 1 instant retail stock." later, sf express (9699.hk) was also listed on the hong kong stock market in december 2021.

after the listing failure, in march 2021, shanshuang received a d++ round of financing of 125 million yuan. investors include shunwei capital, wuyue capital, sig haina asia, etc. at that time, the post-money valuation exceeded us$2 billion, which was also the last round of financing before the flash delivery table.

the prospectus shows that founder xue peng currently holds 22.7% of the shares and has 74.6% of the voting rights; co-founder ru haibo holds 4.8% of the shares and has 1.6% of the voting rights; executive president yu hongjian holds 1.6% of the shares and has 0.5% of the voting rights. % voting rights. in addition, xue peng and his family hold 20.7% of the shares through snoweagle-s limited trust.

among institutional shareholders, sig haina asia holds the largest shareholding, reaching 9.7%, with 3.2% voting rights; cdh venture capital holds 8.9%, with 2.9% voting rights; shunwei capital holds shares it is 7.8% and has 2.6% voting rights.

for this fundraising, shansong stated in the prospectus that the ipo proceeds will be mainly used to expand the customer base and increase market penetration, build brand image, technology research and development, and for general corporate purposes.

however, from 2020 to now, the instant delivery market has changed dramatically.

from the perspective of business scenarios, according to the "2022 china instant delivery industry trend report" released by iresearch, the instant delivery category has expanded from early catering takeout to fresh food home delivery, supermarket retail, flowers and cakes, medical distribution, and clothing. in categories such as shoes and hats, 3c electronics, and beauty products, the instant delivery industry has been strongly promoted, and business scenarios are constantly enriched.

among them, catering takeout is the main force in the demand for instant delivery, with a market share of about 70%; supermarket convenience and home delivery of fresh food account for more than 20%.

such high-frequency and urgently needed services have also brought stable cash flow to related companies. for example, in the first quarter of this year, meituan’s core local business revenue was 54.626 billion yuan, a year-on-year increase of 27.4%, of which distribution services contributed 21.065 billion yuan. .

the one-to-one direct delivery service scenario of flash delivery is relatively simple, and it accounts for a relatively small proportion of the overall instant delivery market, and there are seasonal fluctuations in demand. in the past, flash delivery was known as the "sf express" in the field of instant delivery due to its higher unit price and faster delivery experience. but now, as consumer demand changes, there is great uncertainty as to whether consumers are still willing to pay for experiences.

in addition, with the increase in business scenarios and the entry of more and more players, competition in the instant delivery market has become increasingly fierce.

last year, lalamove announced the launch of its errand business, which covers catering takeout, intra-city pickup and delivery, purchasing on behalf of others, and agency services. didi leveraged its brand influence and transportation capacity resources in the travel field to launch didi errand service. amap announced that it has cooperated with a number of instant delivery companies to provide errand services through its platform. haro leverages its operational experience and user base in shared bicycles and mopeds to expand instant delivery services. e-commerce platform oriental selection also announced that in order to enhance user shopping experience, it will launch instant delivery services through cooperation with third-party delivery platforms. in addition, douyin and kuaishou are also accelerating their testing of real-time retail.

in addition to new entrants, previous major companies are also continuously strengthening cooperation with their headquarters in order to seek more stable traffic. for example, as the delivery contractor for jd’s instant retail business, dada group’s business has been further integrated into jd’s ecosystem this year. the original instant retail brands jd hourly delivery and jd daojia have been fully integrated and upgraded to “jd instant delivery”, promising delivery in as fast as 9 minutes. .

sf express has continued to deepen its cooperation with sf express group headquarters, and the two parties have jointly built a new distribution network. in addition, sf express also continues to strengthen cooperation with traffic platforms such as douyin, alibaba, wechat, and meituan, as well as with multiple leading chain customers.

with multiple parties entering the market, price wars in the field of instant delivery are inevitable. in july this year, cainiao announced that it would upgrade its intra-city express delivery service and launch a "half-day delivery" service. this service was first launched in guangzhou and is targeted at merchants in scenarios such as small batch clothing transfers, flowers and fresh fruit sales, etc., at 14:00 on the same day orders placed before 30 minutes ago are guaranteed to be delivered on the same day. the first weight is charged 6 yuan, and the additional weight is 1 yuan per kilogram. the price is equivalent to a 50% discount.

"demand exists, but consumers need more affordable prices." at this year's interim results meeting, sf express management said that the company expects prices to fall to a certain extent this year.

in the face of price wars, one-to-one delivery services with high customer unit prices cannot be immune. the prospectus shows that from 2021 to 2023, although the number of flash delivery orders increased from 159 million to 271 million, the average revenue of a single order dropped from 19.1 yuan to 16.7 yuan during the same period, and fell further to 16.6 yuan in the first half of this year.

under fierce competition, shanshou is also gradually expanding its business scope and starting to provide delivery services for local restaurants, flower shops, supermarkets and other merchants. for example, in december 2022, douyin takeaway officially announced that shanshou will .

it is understood that among the instant delivery companies that have been listed, dada group has not yet achieved profitability. in the second quarter of this year, it achieved total revenue of 2.35 billion yuan, a year-on-year decrease of 9.5%, and a net loss of 142 million yuan. the current stock price has dropped by more than 9% from the issue price. become.

sf express achieved full-year profits for the first time last year. in the first half of this year, it achieved revenue of 6.88 billion yuan, a year-on-year increase of 19.6%. the net profit attributable to the company’s owners was approximately 62.17 million yuan, exceeding the net profit for the whole year of 2023. level. but currently, the company's stock price has fallen by more than 30% from the issue price.

as a "latecomer", how shansong can gain an advantage in the fierce competition remains to be further observed by the market. the reporter contacted shanshuang about how to expand more business scenarios, improve distribution efficiency, and how to face price wars. they said that it is currently in a silent period and it is inconvenient to reply.