As competition in China’s logistics industry grows intense, the newcomer seeks a sizable chunk of the overseas market
Indonesia-based parcel delivery startup J&T Express (Chinese: 极兔速递) launched its network in Mexico on February 24, making its first foray into the Latin American market.
J&T announced that it had established 12 sorting centers and 26 distribution hubs in Mexico, covering key regions in all of Mexico’s 32 states. A local version of its mobile app will also be launched soon.
Ryan Zhang, head of J&T Express Mexico, called this move “another milestone in J&T’s international strategy.” Previously, this rapidly growing company had a network spanning 10 countries, including China, Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Cambodia, Singapore, the UAE and Saudi Arabia.
The rise of J&T relies on a substantial proportion of delivery orders from Chinese e-commerce giant Pinduoduo (PDD: NASDAQ), whose model of using subsidies and low prices to court consumers is also crucial to J&T’s success.
Zhao Xiaomin, an expert on logistics, observes that J&T’s strategic expansion into the global market is due to the hyper-competitive environment of China’s courier market.
Founded by Jet Lee and Tony Chen, respectively former and current CEO of Chinese smartphone manufacturer Oppo, J&T seeks to tap into emerging markets worldwide. Charles Hou, Group Vice President of J&T, described the company as a new generation of logistics firm with “international genes.”
J&T has been making aggressive moves to expand its market share, including through acquisition of struggling local competitors. In October 2021, J&T acquired its Chinese rival Best Express’s logistics business for CNY 6.8 billion (USD 1.02 billion).
Eyeing a stock listing, the dark horse faces challenges from other established enterprises like STO (002468), YTO (600233), ZTO (2057: HK ), Yunda (002120), and SF Express (002352). What’s more, J&T will also find itself up against smaller but fast-growing couriers including Deppon Express (603056) (Chinese: 德邦快递), JDL (Chinese: 京东物流), and UC Express (Chinese: 优速快递).