Jingdong ate Debang: Why did the “king of less than carload” become a follower? Who’s profiting?

In the end, only SF and JD logistics are left in the direct sales express. The once less than truckload dark horse has become a follower to commit to others. Just over the past weekend, “JD logistics’s acquisition of deppon” has become a certainty. Cui Weixing, who founded deppon and led it to expand its territory, handed over the actual control of the company, and JD logistics seems to have become the new owner of deppon.

Debang has changed after all. The “old gun” who has entered logistics alone has become dependent on competitors to win the opportunity to survive. Some people say that deppon’s performance is declining day by day, so it will be reduced to annexation; Others say that as long as you don’t become the first and second, you still have to stand in line after all.

In any case, Debang’s fate curve also reflects the dilemma of second-line express in the fierce competition to a certain extent. In 2022, the survival situation of second-line express will become more and more difficult, and a large number of express will go bankrupt one after another or have regional abnormalities. For Jingdong Logistics, which stands at the first echelon and is the investor, this may be a “hundred benefits without harm”. With the help of deppon e-commerce customer resources, JD logistics will have the opportunity to pry open the door of Ali and Suning camp.

Jitu acquired Baishi express, Jingdong ate deppon, and logistics enterprises moved closer from “standing in line” to integration, which also blurred and ambiguous the boundary between head e-commerce platforms.

network resources as chips

On the evening of March 11, deppon announced that JD logistics will acquire Deppon Logistics Co.Ltd(603056) 6649% of the shares. After the transaction is completed, Cui Weixing, chairman and general manager, will no longer be the actual controller of the company.

It is understood that after the acquisition, the two sides will carry out in-depth cooperation in the fields of express, cross-border, warehousing and supply chain, and continue to maintain the independent operation of the brand and team, with the overall strategy and business direction unchanged.

Generally speaking, mature network and transportation resources are important chips in the capital game between the two logistics enterprises. In terms of JD logistics, compared with the network logistics mode of SF and Tongda express, JD logistics can compete with it mainly by virtue of intensive warehouse distribution. However, in terms of remote logistics, JD’s express business launched in 2018 is difficult to compete with its peers today. The one-way performance characteristics of retail determine that it is limited in terms of terminal distribution scale and trunk transportation capacity.

According to the financial report, at the end of 2021, the number of self operated trucks of JD logistics was about 18000, while the total number of trunk and branch vehicle resources of SF reached about 58000 in 2020. Relying on the supplement of third-party transportation resources has increased the burden of JD logistics to a certain extent. In 2021, the company spent 40.4 billion yuan on outsourcing costs alone, with a year-on-year increase of 54.7%.

“The business flow of JD logistics carrying platform is enough, but if you want to become a third-party logistics company and occupy a place in the express industry, the capital and operation investment will be a huge number. The efficiency can be maximized by purchasing and utilizing existing resources, and Debang and JD logistics have certain similarities in brand positioning, products and services.” A senior express practitioner told the Beijing Business Daily that before Jingdong Logistics acquired trans express, it mainly wanted to supplement the air transport network, but after more than a year, the business supplement of trans express to Jingdong was not obvious.

From the existing logistics resources of deppon, the financial report shows that as of the first half of 2021, deppon has 143 distribution centers, 140 warehouses, 30486 outlets and 63700 couriers. In terms of transportation network, deppon has 15524 vehicles, accounting for 55.7% of its own transportation capacity, with a total of 2057 trunk lines.

heroes are hard to fight in the twilight

The express master of Yibang has been excited for decades.

On September 1, 1996, at that time, Debang was also called “Cui’s freight”. Together with Cui Weixing and his wife Xue Xia, there were only four employees. At that time, Wang Wei, the founder of SF, obtained the license of Guangzhou SF small Express Service Co., Ltd. and is extending SF network to Dongguan; Chen Ping, the founder of Home Express, is busy seizing the cargo transportation opportunities of major railway stations in Beijing; Yu weijiao, founder of Yuantong, and Zhou Shaoning, founder of Baishi, have not yet intersected with the express industry

At that time, the express market was so high that birds could fly. Cui Weixing and China Southern Airlines Company Limited(600029) veteran cadre air cargo Office jointly engaged in air transportation business, allowing deppon to quickly drive to the fast lane. In August 2000, Guangzhou Debang Logistics Service Co., Ltd. was established. Debang, which started as an air transportation agent, began to try to go out of Guangzhou. In order to get out of the price war, in 2004, deppon pioneered “truck flight”, which won the air express business at the price of road freight, and the business is getting bigger and bigger

However, where there are business opportunities, there are competitors. From 2016 to 2018, Yuantong, Zhongtong, Shunfeng and other enterprises successively landed in the capital market, and the express industry blossomed everywhere for a time. In addition to Anneng and Yimi tick, which started from the medium and low-end express market, SF and Baishi also extended their hands to the express field. In 2018, deppon, which was successfully listed, did not settle down safely. In 2019, SF established SF express to compete for the medium and high-end market with deppon through direct operation, and finally surpassed the latter with a revenue of 12.45 billion yuan. So far, the halo of Debang’s “king of less than truckload” began to dim, and the volume of goods was gradually eroded by backward students.

In fact, since 2013, deppon has also tried to change and launched “3kg-60kg” large express products. Not only to seize the bonus period of e-commerce logistics from 2013 to 2017, but also to seek growth in addition to the traditional LCL business with declining growth rate. In 2018, deppon was determined to transform and changed its name to “deppon express”. At the press conference, Cui Weixing publicly said that the LTL market should eventually be express.

“With the penetration of e-commerce consumption habits, the current express industry, like express delivery, also presents the characteristics of multi frequency and fragmented transportation.” A senior express person pointed out to the reporter of Beijing business daily. This trend is also reflected in the structural adjustment of products by various enterprises, including the mini e-commerce products launched by Anneng in 2019 and the less than carload express quotation service launched by SF express in 2021.

While peers continue to explore the kilogram section of express, on the other hand, the price of small pieces of e-commerce has long been fighting into a red sea. Seeing that Tongda express takes advantage of Taobao, deppon also actively cooperates with rookies and accesses the return and exchange service wrapped by rookies first. However, it is difficult for large express taking different routes to bring deppon out of trouble as the “truck flight” product of that year. According to its financial report, from 2017 to 2020, the year-on-year growth rate of deppon’s revenue decreased from 19.7% to 6.1%, the growth rate of express revenue decreased from 69.14% to 13.6%, and the fast operation revenue has been negative growth since 20182020. In the first half of 2021, deppon’s net profit attributable to listed shareholders was 15.658 million yuan, a year-on-year decrease of 89.88%.

Whether express or express, deppon has been difficult to deal with the situation surrounded by two powerful enemies.

is another curve forward

Logistics enterprises have changed from “standing in line” in the past to integration, which also makes the boundaries between e-commerce platforms more ambiguous and vague.

Just the day before deppon announced its acquisition, JD logistics released its performance in 2021, and the proportion of external customer revenue exceeded 50% for the first time. While trying to convey the information that it is trying to become a third-party integrated logistics provider, JD has also made up the logistics sectors in the same city, aviation, real estate and so on, including the acquisition of dada distribution, leapfrog express and holding China’s logistics assets. The short board of express business is supplemented by deppon’s mature network.

However, from the perspective of business data, deppon’s share of express delivery and supply chain is far from being discussed in the industry. If calculated in 2019, which is not affected by the epidemic, the business volume of deppon express is 520 million tickets, accounting for only 0.008% of the national business volume. The revenue from warehousing and supply chain business was 509 million yuan, accounting for only 1.96% of the total revenue.

In other words, through acquisition in one fell swoop, it is difficult for JD logistics to take the acquisition of Baishi as a springboard and quickly jump in the share of express market like Jitu express. However, it cannot be ignored that the acquisition of deppon is packaged with the tickets of customer resources and other platforms.

According to a person familiar with the matter close to Jitu express, the network integration of Jitu express and Baishi has been completed by the end of February. Beijing Business Daily reporter noted that at present, users can access the logistics turnover information of Jitu express by using rookie app.

Just as Ali has been wary of this logistics provider that has undertaken too many packages for many years, the relationship between Ali, Suning and JD logistics is also kept secret due to commercial interests. However, relying on 273000 customers accumulated by deppon by the first half of 2020, JD logistics may have the opportunity to open the door of the above two companies.

how long can second line express live

Nowadays, in various logistics enterprises, it is not difficult to find many employees and executives from deppon, and the business of deppon has also been imitated and learned by latecomers such as Anneng. In the industry, Debang is often called “Huangpu Military Academy”. It is understood that deppon will not only spend hundreds of millions of yuan on enterprise consulting every year, but also the company’s senior management team is relatively young, almost promoted from front-line college students.

However, during the 14 months after listing in 2018, four deputy general managers left deppon one after another. At one time, many practitioners ridiculed deppon for “cultivating talents for other opponents”. Some professionals also pointed out that deppon should form a new model in the high-level incentive mechanism and introduce more people who can fight immediately.

More cruelly, many second-line logistics enterprises fell in 2019, including express, Guotong, Quanfeng and rufengda, and the new express business of Anneng was cut off due to high losses. Then, in 2021, Tiantian express was shut down, and one meter tick and Baishi Express were acquired one after another. Anting, which finally got listed, has now halved its market value. In 2022, the multi land network of Sulzer express was shut down, and homestead Express has been rarely heard in the C-end market.

“Small and medium-sized express delivery is not networked and large-scale, so it is difficult to win the market space. Countless words and technologies are difficult to win the future market under the digital economy, so it is difficult to obtain the continuous support of capital. In this case, small and medium-sized express delivery enterprises or more join the leading enterprises.” Logistics industry expert Yang Daqing said.

Perhaps it was a deep crisis. In May 2020, Debang introduced Yunda as a strategic investor, who obtained about 6.5% of Debang’s equity with 614 million yuan. For this capital cooperation, both mentioned the goal of jointly expanding market share. However, in the following more than a year, Yunda and deppon made no significant and substantive progress at the business level, and only disclosed a business coordination meeting in January 2022.

It is worth noting that there is market news that at the end of 2021, Wang Zhenhui, the former CEO of JD logistics, has been invited back by Liu qiangdong and may take over the integration work after the acquisition of deppon. For the authenticity of the matter, as of press time, the relevant person in charge of JD logistics did not respond to the reporter of Beijing business daily.

“The delivery time of deppon and Yunda is too long, and the market needs to see the results of deppon after cooperation, but it is not satisfactory from the financial report data. The space for second-line express to move in the future is getting smaller and smaller. From Baishi to deppon, 2022 will become an important year for the reorganization and merger of express enterprises.” Express logistics expert and CEO of guanshuo capital Zhao Xiaomin said.

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