The Transformation of the Express Delivery Industry: From Fierce Competition to Collaborative Profit-Making
Hello everyone, I'm your financial journalist. Today, we're going to discuss a significant event in the express delivery industry and the underlying shift in logic that has left many business owners and investors restless.
If you follow the news, you probably know that SF Express and Alibaba have teamed up again recently. The "SF Express vs. Cainiao" rivalry nine years ago is still fresh in everyone's memory; back then, the two companies were engaged in a full-blown battle, even cutting off their data connections, determined to outdo each other. But now? Not only have they made up, but they've also signed a strategic partnership to collaborate in areas such as e-commerce fulfillment, cross-border logistics, and AI applications.
This isn't just about the personal grudges between these two companies; it represents a fundamental change in the competitive landscape of the entire industry: in the past, everyone was focused on fixing their own weaknesses, but now they're focusing on enhancing their strengths.
To make this easier to understand, I've broken down this in-depth analysis into five key points. Let's discuss what this means and why the giants have suddenly changed their approach.
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1. Why Have the Giants Suddenly Ceased Competing? The Mindset Shift from "All Out Fighting" to "Alliance"
Let's look back at history. Around 2017, SF Express (Fengchao) and Alibaba (Cainiao) were at each other's throats. The logic back then was simple: if you have something I don't, I want it; if I have something you have, you can't touch it.
- Past Approach: Both companies were focused on their respective weaknesses, constantly undermining each other and cutting off data sharing.
- Current Approach: They're now looking at each other's strengths. SF Express realizes that Alibaba's e-commerce ecosystem, cloud computing, and AI technology are formidable, while Alibaba sees that SF Express's logistics network and supply chain services are robust.
In plain terms:
It's like two martial arts masters. Before, they would draw swords and think, “Your swordsmanship is good; I need to train a better one to counter you.” Now, they greet each other with respect and think, “Your swordsmanship is the best in the world, and I have strong inner strength. Together, who can we beat?”
This change indicates that the industry has moved beyond the stage of territorial disputes and entered a phase of competing on efficiency and ecosystem strength. Everyone realizes that trying to overcome their own weaknesses alone is exhausting; it's better to partner with the best in those areas.
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2. Why Isn't Fixing Weaknesses the Way Forward? Because Everyone Is in the Same Pool
The article points out a harsh reality: the traditional “barrel theory” may no longer apply to the express delivery industry.
The barrel theory suggests that a barrel's capacity is determined by its weakest part. So, companies used to focus on increasing capacity, delivery times, and prices. But what happened?
- Homogenization: When one company lowered prices, others followed; when one offered same-day delivery, others did too. The result was increased competition and diminishing profits.
- Profit Decline: In 2019, the average profit per delivery was 11.8 yuan; by 2025, it had dropped to 7.5 yuan. This shows that the old strategy of sacrificing profit for volume has reached its limits.
Key Data:
- Volume Growth, Profit Stagnation: National delivery volume increased by 5% in the first half of the year, but revenue only increased by 7.3%. More importantly, the average profit per delivery has been declining.
- Competitive Deadlock: When the entire industry focuses on the same weak points, it's like everyone competing for the same limited resources, only making things worse.
In plain terms:
It's like running restaurants. In the past, they competed on who had the cheapest food, leading to losses for all. Now, the focus is on better service, unique dishes, and faster delivery. Fixing weaknesses is about competing for existing resources; enhancing strengths is about creating new growth.
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3. How Are the Giants Enhancing Their Strengths? Three Strategies: Buy, Borrow, and Exchange
Since fixing weaknesses isn't effective, how can they boost their strengths? The article outlines three strategies: buy, borrow, and exchange.
Strategy 1: Buy (Investing in Capabilities)
- Example: JD Logistics
- Action: Acquired Kuaiyue Express in 2020 and merged with Debang in 2022.
- Logic: If you want to enter a new area (e.g., time-sensitive deliveries), it's faster to buy a company with existing capabilities than to develop them from scratch.
- In plain terms: It's like buying equipment in a game—expensive but quick results.
Strategy 2: Borrow (Using Platforms to Optimize Resources)
- Example: TikTok’s退货 service
- Action: TikTok doesn’t own any express companies but uses a competition-based system to choose the best service provider.
- Logic: With traffic and business, TikTok offers orders to the best performer. If a company fails, it switches to another.
- In plain terms: It’s like a client using an outsourced service, paying for the best results.
Strategy 3: Exchange (Cross-Ownership for Mutual Benefits)
- Examples: SF Express with Jitou, SF Express with Alibaba
- Action: SF Express shares its cross-border logistics with Jitou, which has a local network in Southeast Asia and Latin America; Alibaba shares its technology with SF Express.
- Logic: By combining strengths, the two can create more value together.
- In plain terms: It’s like forming a partnership where each party brings unique skills and resources, creating a stronger combined entity.
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4. Who Is Making Money by Enhancing Their Strengths? The Success Stories of SF Express and Jitou
The article provides two examples of companies that have succeeded by focusing on their strengths:
SF Express
- Domestic Growth Slows, but Overseas and Supply Chain Growth Surges: Total revenue in the first half of the year was 155.5 billion yuan, up only 5.9%. However, the supply chain and international business generated 39.58 billion yuan, a 15.6% increase. Without special factors, the growth rate was actually 46.6%.
- Interpretation: SF Express’s domestic market is saturated, so it’s expanding into overseas and high-value-added areas, where growth is faster.
Jitou
- From Domestic Leader to Southeast Asian Dominant Player: Its Southeast Asian business grew by 71.2%, with a 5.3% increase in market share. For the first time, overseas revenue accounted for 50% of its total.
- Interpretation: Jitou’s strengths (low cost, high efficiency, rapid expansion) have helped it thrive in new markets.
In plain terms: Both companies understand that domestic competition is fierce, but overseas opportunities are abundant. By leveraging their strengths, they can tap into new markets and grow.
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5. What Will the Future of the Express Delivery Industry Look Like? From Price Wars to Collaborative Division of Labor
The article concludes with a profound statement: “Fixing weaknesses leads to homogenization, and homogenization leads to price wars. Enhancing strengths leads to specialization, and specialization leads to mutual benefit.”
This means:
1. Price Wars Will Subside: Although price competition will continue in the short term, long-term, companies will realize that cutting prices doesn’t boost profits.
2. Specialization Will Become More Common: Companies will specialize in certain areas (e.g., premium deliveries, cost-effective services, cross-border logistics, supply chain solutions).
3. Ecosystem Collaboration Will Prevail: Future leaders will be those who form strong partnerships with e-commerce platforms, tech companies, and overseas businesses to create a comprehensive network.
Implications for Everyone:
- For Consumers: Services will become more tailored. You’ll get faster, more reliable, and more affordable deliveries based on your needs.
- For Investors: Focus on the structure of companies, not just their volume growth. Consider their overseas business, supply chain revenue, and technology investment—these factors determine their future value.
- For Entrepreneurs: Avoid trying to be a “one-size-fits-all” express platform; focus on a niche and enhance your strengths, then partner with giants to leverage their resources.
In summary: The express delivery industry is still evolving, but the focus has shifted. Success will come from specialization and collaboration, not just from fixing weaknesses. The real value lies in building strong, unique strengths.