SF Express has launched an 8-hour private car express. Can differentiated services break the deadlock of the

SF Express has launched an 8-hour private car express. Can differentiated services break the deadlock of the "price war"?

SF Holdings Announcement: Net profit in the third quarter expect to fall by 40%-46% year-on-year. According to Unshared News: The popularity and maturity of SF express delivery services, consumers' requirements for fast delivery are also evolving, not only requiring "delivery" but also "delivery as soon as possible" and "delivery on time".

In response to the special needs of some users, SF Express has recently launched a new high-end service-an an "exclusive express mail" service. It adopts the transportation mode of "car pickup + next flight/high-speed rail + special car dispatch", which can realize express delivery in 8 -16 hours delivery.

In addition, ZhongtongThe value-added service of "timed delivery" launch not long ago.

Years of price wars have overwhelmed major express companies, and the focus of competition has shifted to service quality. Differentiated services may become a new method for express companies to "break the game."

High quality, the high price of SF Express

The exclusive emergency service launched by SF Express takes the form of intermodal transportation with professional partners, which has significant advantages in terms of timeliness. Taking Shanghai to Beijing as an example, using exclusive express mail can be 14 hours ahead of SF Express and more than two days ahead of SF Express.

Of course, better service also means more expensive prices. It is reported that the lifting of exclusive express mail is 30kg, of which the special fare for collecting and dispatching is 280 yuan/30km, and the part exceeding 30km is calculated at 6 yuan/km; the air/high-speed rail freight starts at 380 yuan/30kg, and the excess part is charged at 13 yuan. /kg calculation. A single shipment of about 30 kilograms costs more than 1,000 yuan, which is a lot more expensive than ordinary bulky shipments.

SF Express Pricing rules

SF Express has exclusive pricing rules for urgent items.  The picture comes from the screenshot of it appletSF Express has exclusive pricing rules for urgent items. The picture comes from the screenshot of the SF Express applet

In addition, UI News learned through SF Express’s customer service that exclusive urgent items have requirements for the delivery time, city, item type, weight, and other factors. SF will only push this service when the order meets the conditions.

This launched this new service, which is mainly used to transport drugs, temperature-controlled vaccines, factory parts, and other items with high demand for timeliness. At present, the service has only opened 8 origin cities and 18 destination cities, with 38 first product lines.

ZTO Launch a Technology

On the other hand, ZTO will launch a Technology "timed delivery" value-added service to facilitate consumers to sign for express delivery in person at a specified time.

According to news from Yibao.com, users can choose two hours between 9 am and 7 pm as the delivery time, and each order will be charged 2 yuan. The service is expected to be promoted throughout the network in late November.

The timed delivery service is not the first of Zhongtong. As early as April 2017, CainiaoBaotuo announced the joint launch of new functions of timed delivery in 8 cities across the country, but it did not promote it on a large scale. JingdongSF Express has also launched similar services.

As the volume of express orders increases year by year, this type of business may bring a considerable amount of additional income to express companies.

From "price ratio" to "speed ratio" OF SF Express Cars

In fact, since the first half of this year, China's express delivery market has set off a wave of "speeding up."

The first is that SF Express will upgrade its product system from April, canceling the previous four time-sensitive products of "SF Express", "SF Express Next Morning", "SF Express" and "SF Express", and changing to "SF Express Today", "SF Express" and "SF Express".

In May, China Post also launched a "comprehensive speed-up". Major cities across the country can achieve next-day or even next-morning delivery of mail, and more than 60% of express mail can achieve next-morning delivery.

Industry insiders believe that this move will narrow the gap between China's postal delivery business and private express delivery, and the pressure on SF Express, JD.com, and Tongda will also become greater.

Domestic Express Industry

For a long time, the domestic express industry has become more homogeneous, and price wars have become the main means for express companies to seize market share. The company's profitability and the average delivery fee of couriers will inevitably affect it, and the industry has fallen into a vicious circle.

Recently, major express delivery companies have successively released third-quarter financial reports, and the situation of increasing revenue but not increasing profits continues.

From the perspective of revenue, in the first three quarters of this year, YTO’s revenue increased by 30.41% year-on-year, SF Express increased by 23.97% year-on-year, Yunda increased by 23.88% year-on-year, and Shentong increased by 14.95%. The growth momentum is considerable.

But from the perspective of net profit returned to the parent company, Shentong fell 4671.20% year-on-year, SF Express fell 67.89%, and Yunda fell 23.41%.

Breaking the deadlock in the price war and seeking profit points have become the primary demands of the express delivery industry, and product differentiation may be an important means.

Great Wall Securities

Great Wall Securities analysts believe that SF Express is currently improving product stratification, optimizing product structure, and improving product pricing capabilities to restore profitability.

On the other hand, ZTO not only launched a scheduled delivery service but also announced the cancellation of the fourth quarter assessment. On the one hand, this move adds bargaining chips and rules to the end delivery, and on the other hand, it can promote the weakening of price competition, promote the maintenance of high-quality customers at the end of the outlet, and abandon some low-priced e-commerce customers.

However, how much-differentiated services can bring to the industry depends first on the market scale that high-value-added products can form. Judging from the introduction of SF Express's exclusive emergency, this project is still a small-scale test, and whether it can promote on a large scale remains to test over time.

Ali Akbar
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Qasim Ali

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