JD Logistics launched a new APP called 'Jingyi Truck (京驿货车)' recently, which will be the freight transaction arm of JD.com. This platform enables the truck owners to pick orders and make deals online. Matching the trucks and cargos, this platform has been considered as Didi for freight transportation.
The freight transportation market in China is huge and still growing. The first five months' accumulated volume of road freight in China was 15.4 billion tons, increased 5.8% on a year-on-year basis.
JD logistics has experiences loss-making for years and have to seek more profitable business, and have better utilization of the resources from JD group,
In addition, in 2007, JD.com self-built its own logistics arm and invested a large amount of capital to build warehouses, fleets, end distribution teams, etc., JD Logistics became the royal logistics team of JD.com, giving users good shopping experience. However, with the lack of growth of JD.com, the business volume provided is not enough to cover the cost of JD Logistics, and the losses of JD Logistics are further aggravated.
By doing the matching business of goods and trucks, through the integration of truck resources on the Gyeonggi truck platform, a number of high-quality fleets can be selected for JD Logistics, supplementing their own capacity and saving the cost of self-built fleets. And to develop the cargo matching business, it can further enrich the product system of JD Logistics, create a complete logistics ecology, improve the market valuation of JD Logistics, and help JD Logistics to go public as soon as possible.
In such a big market, start-ups like Manbang (满帮集团) and Lalamove (货拉拉) have entered this industry and have grabbed a big market share. After several rounds of financing, Manbang has basically achieved profitability.
The competition in this sector is fierce so far, seemingly, JD Logistics expects Jingyi Truck to stand out and improve the overall profitability.