Cainiao ushered in another major move after the spin-off development. On June 28, at the Global Smart Logistics Summit, Cainiao announced the launch of its own high-quality express delivery service: Cainiao Express. Wan Lin, CEO of Cainiao Group, confirmed that he has obtained the "Express License".
The launch of Cainiao Express is against a special background. As the business with the most mature conditions for listing after Alibaba’s split, it was approved by Alibaba’s board of directors to launch its listing plan in May. At the same time, it took a 25% stake in STO Express in early June. . From many perspectives, Cainiao already possesses the ability of sustainable growth. However, there are SF Express, Jitu, and JD.com in the logistics market, and it needs to develop more advantages to face the turbulence of the industry.
From the first ten years when there was no need to consider profitability, to the next ten years when competition is fierce and quality and efficiency are improved, Cainiao’s flight has coexisted with firmness and twists and turns.
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Cainiao Express is upgraded from the distribution business of Tmall Supermarket. On the basis of improving service quality, the business has been expanded to a national express network.
Six years ago, in order to support the development of Ali’s internal self-operated businesses such as Tmall Supermarket, and to control the impact of uncertain factors on user experience in the process of self-operated service performance, Cainiao began to build a self-operated system from point to area, and then started express delivery. service growth path.
In August 2020, Cainiao will integrate its transportation capacity, including Danniao, and launch Cainiao direct delivery. In March this year, Cainiao announced in Hangzhou that it would cooperate with Tmall Supermarket to achieve "half-day delivery" (preferred warehouse delivery, that is, the integrated warehouse delivery service of Cainiao Express and Cainiao warehouse), and then opened multiple cities.
In May, Cainiao and Shentong announced that they would launch the next-day delivery service for smart warehouse distribution, and the first batch of goods for the Yangtze River Delta and Pearl River Delta will achieve next-day delivery from payment to receipt; the joint Taotian Group further announced that Cainiao’s self-operated preferred warehouse distribution products Fully open to the outside world, jumping out of the restrictions of self-operated business and leading merchants, as long as merchants who adopt this business can achieve "half-day delivery" or "next-day delivery".
It is worth noting that the process from "Logistics Cainiao" to Cainiao Logistics is obviously a process of comprehensively improving the quality of express delivery services. Cainiao Express clarifies the word "quality" and focuses on "cainiao self-operated, high-quality express delivery, easy to use and inexpensive". To benchmark the best service in the industry, it is unavoidable to remind people of JD.com, which has built its own logistics since 2007. This discussion mainly focuses on the field of e-commerce logistics.
According to the results of the 2022 express service satisfaction survey released by the State Post Bureau on April 11, SF Express, JD Express, and Postal Express rank among the top three.
In fact, only in terms of timeliness and other points, Cainiao has indeed further stimulated the industry's fighting spirit for "volume" services. After Cainiao’s half-day delivery was launched, JD Logistics followed up and launched “Yuncangda” on April 6, shortening the e-commerce delivery time to a minimum of 2 hours. SF Express announced that the "half-day delivery within the same city" has expanded to more than 80 cities. During the 618 period, both Cainiao and JD.com expanded the pre-sale front-end scale to achieve the ultimate minute-level delivery.
Tmall Supermarket, whose delivery model is similar to JD.com, emphasizes short distance, high frequency, and fast enough speed. For e-commerce orders, the sending and receiving must be integrated, which puts forward extremely high requirements for warehouse allocation and digital management capabilities, and is also a level of service that ordinary sellers and small and medium-sized brands cannot achieve. However, as Cainiao releases these capabilities to the outside world, whether it is brand merchants or small and medium-sized merchants in the supply chain of industrial belts, their service capabilities have been reshaped.
For example, under the Cainiao Smart Warehouse Distribution business model, if merchants choose to enter the two warehouses in East China and South China, they will be able to achieve 50% of the orders nationwide in the next day.
The half-day delivery service based on Cainiao Express has an immediate effect on brand improvement—according to the official introduction, Yili’s Tmall flagship store has tried Cainiao Express since last year, and complaints about logistics problems have dropped by 30%, and logistics costs for big promotions have dropped by 30%. The proportion of repurchases from old customers increased by 10%. At present, Cainiao Express has signed customers such as Tsingtao Brewery, Oupolai, Timke, and Adopt a Cow.
For brand merchants with different needs, or the different requirements of single brand merchants for different business regions and stages, logistics services must be diversified, and a balance should be found between merchant costs and user experience. This is in line with what Cainiao Group CEO Wan Lin said: "China's express delivery market is developing fast enough and large enough, requiring the logistics industry to provide multi-level supply." As a benchmark self-operated project, Cainiao Express will not directly compete with Tongda .
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Under the background that Cainiao is about to go public, all actions are expected to boost performance. In the early years, Cainiao could get Ma Yun’s promise that he would not consider making profits for ten years, but the ten-year period since the establishment of Cainiao in 2013 has passed. Now Cainiao, who is an independent leader, is considering maximizing the value of his ability.
On the one hand, Cainiao’s losses are still continuing. The total adjusted EBITA loss in the last three years is 2.669 billion yuan. Although the loss in fiscal year 2023 is only 391 million yuan, there is still a certain gap from profitability. However, the current sentiment in the Hong Kong stock market is not good, and the market will be stricter in identifying the quality of listed companies.
On the other hand, as Cainiao develops independently, its business prospects need to be evaluated more carefully. For example, at this stage, the most valuable part of Cainiao’s business is still e-commerce logistics (the same is true for JD Logistics). To be independent, it is necessary to expand enough customer sources.
Judging from the first-quarter financial report, Cainiao’s revenue from external customers accounted for about 72% of its total revenue, amounting to 13.619 billion yuan. The problem is that the proportion of its external customers is roughly at the same level as JD Logistics, but the amount is still significantly lower than that of JD Logistics, whose external revenue reached 25.516 billion yuan.
Fortunately, Cainiao's series of open source actions since the first half of the year, including the release of Cainiao Express, have shown that it has made sufficient preparations for independent development.
In fact, Cainiao is also realistic. For example, when it took over the autonomous driving business of Dharma Institute on May 15, the intelligent delivery robot "Little Man Donkey", as a project that has already landed application scenarios, obtained the layout of Cainiao, but focused on L4 level automatic driving. The "big donkeys" who drive trucks are excluded. Because the latter needs to burn more money, even if there is a prospect, it will bring too much investment pressure to Cainiao at this stage-in the context of the upcoming listing, Cainiao needs to consider investing more resources in heavier service areas , such as delivery of home appliances and so on.
The investment does not stop there. At the Global Smart Logistics Summit, Cainiao CEO Wan Lin also announced the four most important things for Cainiao this year. Re-acceleration of international express delivery, deep cultivation of key overseas regions, multi-level products in the domestic supply chain, and new upgrades of domestic express delivery. The importance of overseas and cross-border business is self-evident, which is more in line with Cainiao's own positioning as a "global digital logistics group".
In 2022, Cainiao's annual average daily cross-border parcel volume will be second only to traditional giants UPS, FedEx, and DHL, reaching more than 4.5 million.
In the context of the sprint listing, overseas will become an important highlight of Cainiao's development. Especially in China, due to policy and industry self-discipline restrictions, the price war in the express delivery industry has long been locked in a cage, and the effect of reducing costs and increasing efficiency has an upper limit, and the overall tone of pursuing development quality is relatively prominent. But overseas, rich e-commerce experience can also bring a lot of room for imagination.
In terms of quality control, Cainiao's "end-to-end controllability" has dismantled and constructed the four major links of "ABCD" (domestic collection, main line transportation, overseas hub to destination country, and destination country delivery), with solid results. In terms of logistics timeliness, Cainiao is promoting the implementation of global five-day delivery.
What is worthy of recognition is that since 2018, Cainiao’s revenue has grown at a compound annual growth rate of more than 60%, which is twice the 30% of SF Express and JD.com during the same period. This is a strong proof that Cainiao is catching up as a latecomer. On the eve of coming to be independent, Cainiao's continuous new initiatives also show its confidence. It coincides with the 10th anniversary of the rookie, and his ambition is still there, and he will gradually give the answer from now on.
Article source: Songguo Finance