The following article comes from the opinion, the author is charming Dr. X
Original title: “SF Wangwei: Ambush on Ten Sides!” 》
Source: “Viewpoint” official account (public account ID: baobaobutong)
Author: Charming Dr. X
The richest man in Hong Kong has changed.
——This is a big piece of news a few days ago. It may be because Ant and Jack Ma have been so popular recently that many people have ignored this information.
According to media sources, the Forbes Global Real-time Rich List on October 26 showed that Wang Wei was ranked above Li Ka-shing, and the net worth difference between the two was about 3.5 billion US dollars. This means that Wang Wei’s wealth has surpassed the real estate tycoon Li Ka-shing to become the new richest man in Hong Kong.
Wang Wei? That’s right, Wang Wei, the founder of SF Express.
Since the beginning of this year, under the epidemic situation, SF Express’s performance and share price have soared, and Wang Wei’s wealth has risen by 118% to 240 billion yuan.
But at the same time, behind the flowers and the applause, SF Express under the leadership of Wang Wei is already facing “ambush on all sides.”
At 5:02 am on November 1, 2020, a high-speed train departs from Beijing West Railway Station and arrives at Wuhan Hankou Station at 10:20 that day.
There is no passenger in the car, there are no seats in the car, only shelves-this is a high-speed rail for express delivery.
Double Eleven this year comes early, and the express industry ushered in a “war” ahead of schedule. SF Express has laid down 863 high-speed rail lines, and all cargo planes and drones are also ready to go. The express delivery giant wants to seize the double eleven and become the most beautiful express delivery boy.
However, SF Express, which always dominates the arena with “fast, accurate and stable”, seems to have overturned during this early Double Eleven.
On social media, there are a lot of complaints about SF Express.
Netizens use “slower as soon as Double Eleven” to describe SF Express, which is indeed not groundless. As early as last year’s Double Eleven, SF Express’s timeliness was criticized. At that time, some netizens asked Zhihu, “What happened to SF during Double 11? Weibo Post Bar was scolded everywhere. It stands to reason that SF Express did not occupy a large share of the express delivery market. But because of the slow timeliness?”
In fact, looking carefully, this “gap” is not unexpected. In May 2019, SF Express took the initiative to lower its stance, seized the e-commerce parts market, and launched a “special offer” product.
According to SF Express’s internal configuration, the standard express for inter-provincial and inter-economic circles is generally by air, and preferential products are transported by land.
During the Double Eleven period, a large number of e-commerce products flooded into special special distribution products, and SF Express’s strongest is Skynet (aviation parts), which is no better than three links and one delivery in land transportation.
Moreover, at the same time, SF Express’s initiative to “sink” has another consequence-a decline in single ticket revenue.
Huxun has made statistics. In the field of traditional time-sensitive products, SF Express’s express shipment volume in 2019 was 4.831 billion, a year-on-year increase of 25.84%. However, the proportion of time-sensitive parts’ revenue has not risen but declined, and has been declining year after year. One of the important reasons is that single ticket revenue is declining.
Financial data show that in 2019, SF Express’s per ticket revenue was 21.94 yuan, a drop of 1.32 yuan from 23.26 in the same period last year.
The decline in single ticket revenue shows that China’s express delivery network system is improving and growing, and residents are enjoying faster and lower-cost express services.
On the other hand, this also shows that the market has entered a stage of homogenized competition where price is exchanged for quantity.
In other words, the express industry is fighting a “price war”. Tiger Sniff has done statistics:
“In 2007, the cost of sending an express was 25 to 26 yuan. By 2019, the cost of sending an express was only about 12 yuan, a drop of more than half.”
For SF Express, which has been taking the “high-end route”, this is definitely not good news.
The essence of competition in the express delivery industry is cost and operational efficiency. Price is the reason for the differentiation of SF Express. However, at the moment of increasing dataization, the speed and safety of major competitors are constantly improving, which has eroded the moat on which SF Express depends in disguise. As for SF Express, which built its own supply chain system, its growth has been further affected because its scale has not been upgraded.
And this is just the tip of the iceberg. What makes SF Express and Wang Wei more anxious is the competitive landscape that SF Express is facing.
SF Express has never been a big winner in the “feast” of the e-business and express delivery industry on Double Eleven.
A very important reason is that SF Express wanted to set aside e-commerce and establish its own system.
In 2013, as soon as the “Cainiao Network” was established, the three links once reached the same boat as Ali. Only SF Express became a lone ranger, wandering outside Ali’s scepter.
Now, Ali has almost half of China’s express delivery industry in the bag. Among the major logistics companies in China’s express delivery market, the “three links” (Shentong, Yuantong, Zhongtong) and Best have Ali’s presence behind them.
Such “loneliness and bravery” puts increasing pressure on SF Express. On Children’s Day in 2017, SF Express even “crashed” with Cainiao, directly shutting down Cainiao’s data interface service in the smart self-pickup cabinet “Fengchao”, and even alarmed the top management.
The importance of e-commerce platforms to the express delivery industry is self-evident, and it is no exaggeration to say that e-commerce platforms hold the lifeblood of most express companies.
Express parts mainly include e-commerce parts, business parts, and personal parts. According to the data of Zhiyan Consulting, the proportion of e-commerce parts in 2018 has reached about 78%.
At this point, SF Express’s feelings are getting deeper and deeper. Whether it is the repeated failures to build a self-built e-commerce platform, or the initiative to sink into “e-commerce special offers”, SF’s e-commerce desire is extremely urgent.
However, on the biggest cake of e-commerce, the “Tongda Department” that hugs the thighs of e-commerce has already left SF Express behind, and its market share has dropped from 11.5% in 2014 to 7.6% in 2019. Stand at the end of the “head express giant”.
When SF Express was deeply involved in the e-commerce dispute with “Tongda”, the e-commerce platform’s own express delivery was already in full swing.
The strong rise of JD Logistics shocked SF Express and Wang Wei. In front of JD.com, SF Express’s proud direct operation and warehousing are no longer the only advantages.
As early as the end of 2017, JD.com had 405 warehouses with a total area of 9 million square meters. At that time, the storage area of SF Express was less than 4 million square meters.
Moreover, JD’s strategy is to set up a large number of front-end warehouses to minimize the waiting time after consumers place orders. This is also close to the speed moat that SF Express has built for many years.
In front of JD.com’s “e-commerce platform to acquire customers + natural storage capacity”, SF Express’s pressure is not small.
The rising stars in the express delivery industry are also accelerating.
Before Double 11, a major event happened in the express delivery industry-Shentong, YTO and Yunda unexpectedly stood in the same camp and jointly blocked Extreme Rabbit Express.
Extreme Rabbit Express-this courier company that has only been established for 5 years, took 2 years to take the lead in the express delivery industry in Indonesia. After entering the Chinese market in March this year, it took only 5 months for Extreme Rabbit Express to exceed 8 million tickets per day, and sometimes even approached 10 million tickets.
You know, Best Express took nearly 10 years to achieve an average daily express business volume of 6 million pieces.
According to All-weather Technology, Jitu has completed 100% coverage of provinces and cities across the country. As of October this year, the number of national transportation trunks has exceeded 1,500, and the number of trunk transportation vehicles has exceeded 2,000. At present, the number of domestic outlets has exceeded 10,000.
This is destined to be another strong opponent that SF Express will soon face. Moreover, the industry generally believes that Pinduoduo is standing behind Jitu.
These have been enough to make SF Express exhausted, and the people who carve up the express market are still coming.
City delivery is one of them. Flash delivery, Dada, Meituan errands, UU errands, etc. have been in full swing recently. Take Dada, the country’s largest real-time logistics platform, as an example. Up to now, the platform has 634,000 crowdsourced delivery personnel, with a peak daily order volume of 9.2 million orders per day, covering more than 2,400 cities and counties. There is no doubt that SF’s market space will be further eroded if the price difference is not large.
Tongda, Jingdong, Jitu, and intra-city delivery…More opponents are coming from all directions.
Some latecomers rely on the big tree to quickly ramp up, quickly copy the successful experience of the pioneers in the original competitive landscape, further carve up the logistics market, and put more and more pressure on SF Express.
The changes in the external environment are far greater than the moat Wang Wei has created for the internal system, and the market is changing!
How much room for imagination
Seeing the predators coming from all directions, SF Express didn’t expect to break through.
For a long time, China’s express delivery industry has been questioned more than homogeneous competition and over-reliance on e-commerce business, locked itself in a single space, and its profits are getting thinner.
Therefore, SF Express began to focus on diversification. In the past six years, SF Express has changed its CEO at 7 in the commercial sector, and Wang Wei’s transformation anxiety has become “dying ill.”
SF Optimal focuses on fresh food e-commerce, and has a layout of Heike stores. Later, SF Optimal merged with SF Heike offline stores to open the fresh O2O era. Later, SF Express entered into cross-border e-commerce. Later, the transition to convenience stores and unmanned shelves changed almost every year, but the effect was not obvious.
Just as Yema Finance said, since SF’s involvement in e-commerce and offline supermarkets, it has been ups and downs all the way, summed up in four words, that is: bad, bad.
The unsatisfactory originates from insufficient preparation for the management ability of an unfamiliar industry; the inadequacy originates from the incomplete research on the supply chain commodities of the supermarkets.
Since 2018, SF Express has successively entered the intra-city distribution business, increased its cold chain business, and entered the supply chain business and e-commerce parts market.
But today, SF Express is already very difficult to break through the red sea of e-commerce. Tiger Sniff has analyzed the reasons:
First, due to the heavy asset model of SF Express, it is difficult for SF Express to spread its outlets to more low-end markets and fully penetrate the sinking market;
Second, SF Express’s high cost, low-priced e-commerce business will lower the overall ticket revenue, and bring certain pressure on profitability. Moreover, the decline in the growth rate of the e-commerce industry will result in limited growth space for the e-commerce express market.
SF Express’s hopes also fall on its intra-city distribution, cold chain and supply chain businesses. In February 2019, SF Express established SF DHL and deployed its To B-end supply chain business.
However, intra-city distribution, cold chain, and supply chain businesses contribute little to SF Express’s overall revenue. The three will only account for about 10% of revenue in 2019. It is currently difficult to reverse the lack of performance growth, and it has yet to be scaled up.
The missed opportunity of e-commerce is regarded by the outside world as the main reason for SF Express’s current embarrassing situation. But from a deeper perspective, SF Express’s dilemma lies in its business model and strategic layout.
From a model point of view, SF Express originally took the high-end route of “quality for quantity”. Indeed, in the early days of the express industry, such a strategy refreshed consumers. High-end positioning, air freight and direct sales have become SF’s moat. But today, the express delivery industry has entered the era of inventory game. When everyone’s quality and speed have improved, SF Express’s original advantages are no longer obvious.
In terms of layout, SF Express could have used its first-mover advantage to build a complete upstream and downstream industry like Xiaomi. However, because Wang Wei chose to “fight alone” and missed the golden period of e-commerce express development, he regretted it. The time is too late. The so-called diversification is just following the waves of the wind outlet, and cannot help SF Express build a complete ecological chain.
If these are not fundamentally changed, SF Express will continue to be eaten away.
At that time, maybe as Wang Wei himself said——
“Our competitors are definitely not from peers, but cross-border companies.”
Behind the style of a company is often the character of the boss.
Wang Wei, the head of SF Express, rarely talks about the process of entrepreneurship in public. In 1993, Wang Wei took the 100,000 Hong Kong dollars his father gave him and founded SF Express in Shunde, Guangzhou. They rented a tens of square meters store on Portland Street in Hong Kong to receive and deliver goods, and they were mainly responsible for land express delivery between Hong Kong and Shunde.
From riding a motorcycle through the streets and alleys to becoming a courier giant with hundreds of thousands of employees, Wang Wei’s hardships on the road to success can be imagined.
It was this kind of experience that made Wang Wei cautious, low-key and even conservative.
On June 20, 2017, the Guangdong-Hong Kong-Macao Greater Bay Area Forum was held in Hong Kong. This forum, solely organized by Ma Huateng, rarely invited Wang Wei, who has rarely appeared.
At the meeting, Wang Wei said:
“Ten years ago, I paid attention to Tencent of Boss Ma. At that time, I understood that Tencent was a QQ. I said that it was a pick-up girl. I thought it was nothing. But I am thinking now, 10 years later, what is the difference?”
“In addition to creating his own internal environment, President Ma also created the entire external ecological environment.”
“In the end ten years, it will be the difference between 200 billion and 2 trillion.”
Wang Wei is talking about the point: Tencent wins in ecology, while SF Express loses in the pattern.
Do everything by yourself. In the ascending stage of the market, you can indeed rely on the ultimate experience to occupy the minds of users, but when the market scale reaches a certain level, this self-contained closed system will make user growth no longer sustainable.
At this time, whether you can innovate, break yourself, and create a complete ecosystem has become the key to reversing the decline.
Therefore, SF Express’s biggest rival may be SF Express itself!