According to LatePost (晚点), SF is currently in contact with J&T for equity cooperation, or will invest in J&T Global with a ratio of 1%-2%, and the specific investment amount and cooperation details are still under discussion.
J&T Express (极兔速递) was founded in 2015 by Li Jie (李杰), the founder of OPPO's Indonesian business, and grew into the largest express delivery company in South East Asia in 4 years. In the second half of 2019, J&T returned to China for development, and after 3 years, it became the fifth-largest express delivery industry in China. SF Express (顺丰) set internationalization as its second growth curve after its failure to sink in 2021. The Kerry Logistics (嘉里物流) it acquired is currently the second-largest express delivery company in South East Asia, and it once competed fiercely with J&T in The Kingdom of Thailand.
Today, when the number of express parcels in China is stuck at 300 million a day and no longer growing significantly, competitors are also starting to squeeze each other in their own ways. ZTO (中通快递) and YTO (圆通快递), which rank first and second, have both lowered prices to varying degrees this year; STO (申通快递), which ranks fourth, also plans to sacrifice profits for growth and reach third place by the third quarter of this year.
The wave of Chinese e-commerce going overseas is one of the few opportunities that will allow emerging express delivery companies to go global. For two companies eager to expand into the international market, cooperation is more urgent than competition. J&T has overseas customer resources and terminal distribution networks in South East Asia, the Middle East and South America. SF has China's largest air cargo fleet and rich air trunk network. Together, the two sides can seize this window period faster. Otherwise, it would take them three to five years to build the infrastructure from scratch.
The express delivery industry today is mainly a competition between efficiency and cost, and the resources invested in the past determine today's efficiency. Rivals are more powerful than J&T. They have purchased more land, updated vehicles and equipment in the past ten years, and continuously reduced costs and improved efficiency. This is directly reflected in the capital investment of several companies. The capital expenditure of ZTO Express, the first in the industry, has reached CNY 27.50 billion in the past three years, and STO, which has invested the least, has also reached CNY 8.90 billion.
At present, both J&T and SF have their advantages. If the two sides choose to fight alone, whether it is SF building its own terminal network and attracting customers, or J&T building its own air trunk line, it will take three to five years, and they will not be able to keep up with the current wave of Chinese e-commerce going overseas. The market may also be intercepted by DHL and FedEx.
However, from the current point of view, there is still considerable uncertainty about the effect of this cooperation. But at the same time, J&T and SF have to cooperate. This is one of the few opportunities they are unwilling to give up to explore overseas battlefields.