Because of service reputation and other reasons, JD Logistics and SF Express are often compared. At the moment when JD Logistics is about to IPO, this kind of comparison is even greater.
However, Jingdong logistics and SF Express are different in many aspects-although the two are increasingly close to each other in many businesses-at least for the moment, there are still many differences between the two. From the perspective of model, SF Express is a typical network model, while JD Logistics is a warehouse distribution model. SF is strong in the trunk line, and JD Logistics is strong in warehousing.
From a resource point of view, as of June 30, 2020, SF has 73 all-cargo aircrafts (59 of which are self-operated all-cargo aircrafts), and a total of 2004 all-cargo and bulk air routes. SF's self-operated and outsourced trunk and branch lines total about 45,000 vehicles, and a total of about 110,000 trunk and branch lines are opened. As for JD Logistics, as of the end of 2020, its self-operated transportation fleet includes about 7,500 trucks and other vehicles; it has about 620 air freight routes and cooperates with China Railway Corporation to use 250 railway routes. In terms of quantity, it is far less than SF Express. However, as of the third quarter of 2020, JD Logistics has operated more than 800 warehouses with a total management area of approximately 20 million square meters. Correspondingly, as of June 30, 2020, SF Express has 194 warehouses of different types (including the new HAVI Cold Chain Logistics Center), covering an area of approximately 2.34 million square meters. In this regard, SF Express is inferior to JD Logistics.
Not only that, but also specifically mentioned SF Express in the prospectus of JD Logistics. According to JD Logistics, SF Express is an integrated express logistics service provider, while JD Logistics is positioned as a supply chain solution and logistics service provider. Compared with SF Express, JD Logistics has obvious advantages in warehousing and distribution services, bulk goods logistics services, and logistics technology services, and can provide customers with integrated supply chain logistics services.
In fact, the supply chain is also the place where JD Logistics has the most ink in the prospectus. For example, in terms of competitive advantages, JD Logistics listed 6 and 3 are directly related to the supply chain , including: the largest integrated supply chain logistics service provider, advanced proprietary technology that empowers the entire supply chain, and collaboration The symbiotic open supply chain solution platform, the remaining three are: strong operating efficiency drives high service quality, excellent brand image and customer experience, experienced and visionary management team and strong corporate culture.
From the perspective of financial data, revenue from integrated supply chain customers has also accounted for most of JD Logistics' total revenue in recent years. For example, as of September 30, 2020, JD Logistics' accumulated revenue in the first three quarters reached 49.5 billion yuan, of which revenue from integrated supply chain customers accounted for 79.1%. In addition, integrated supply chain logistics services have also contributed to its revenue growth. In the first nine months of 2020, JD Logistics' revenue from integrated supply chain customers increased by 33.8%.
So, what kind of service is the integrated supply chain logistics service, what is its prospect, and what can JD Logistics do? This article summarizes the following:
01 The growing market,Unique position
According to the prospectus of JD Logistics, the so-called integrated supply chain logistics service is a market segment and an advanced logistics service in the outsourcing logistics service market. This service is provided by a third-party service provider, but unlike isolated supply chain logistics service providers, integrated supply chain logistics service providers are capable of providing comprehensive logistics services, including express delivery, vehicle and LTL transportation, and last Kilometer distribution, warehousing and other value-added services (such as door-to-door installation and after-sales service) are provided to customers in the form of integrated solutions to meet their various needs.
Among them, inventory management plays a core role in integrated supply chain solutions. JD Logistics also classifies customers based on whether they have used warehousing or inventory management related services (ie, warehousing services). All customers who use its warehousing services are classified as integrated supply chain customers. According to the Insight Consulting Report, JD Logistics is the largest integrated supply chain logistics service provider in China based on the total revenue of in 2019.
Not only that, the number of JD Logistics external integrated supply chain customers and the revenue contributed by a single customer are also growing. According to the prospectus of JD Logistics, in 2018, the number of its external integrated supply chain customers was 32,465, and in 2019 it increased to 39,926. In 2018, the average revenue of each external integrated supply chain customer of JD Logistics reached 234,057 yuan, and in 2019 it increased to 279,401 yuan.
and according to the insight consultation report,The market targeted by JD Logistics is still full of huge growth opportunities.
From the demand side, the rapid development of digitalization of the Chinese economy and the fragmented, diversified, and complex needs of end consumers have prompted enterprises to provide more rapid and flexible supply chain logistics services. The characteristics of supply chains in different verticals are different, and this requires tailor-made integrated supply chain solutions for the characteristics of each specific industry.
From the production side, in the past, the efficiency improvement of the logistics industry was mainly concentrated on the distribution side, that is, the transportation of finished products from the manufacturer to the end consumer. In fact, the manufacturing side still has huge potential to improve efficiency. With the help of end-to-end integrated supply chain logistics services, better raw material sourcing and production planning methods can be used to help companies achieve efficiency improvements.
From a technical point of view, a huge amount of data is generated in each link of a company's supply chain. Analysis of these data can enable companies to have a more comprehensive understanding of the causes of operational inefficiencies and make better business decisions. And the integrated supply chain logistics service can cover the supply chain more widely, so that valuable data can be better tracked, integrated and analyzed, so as to provide value-added services for enterprises.
In addition, the country's preferential policies and reforms to improve supply chain efficiency, reduce logistics costs, and promote the adaptability of advanced technology applications will also contribute to the development of integrated supply chain logistics services.
Based on the above background, insight consulting estimates, will reach RMB 2 trillion in China's integrated supply chain logistics service industry in 2020, and it is expected to increase to RMB 3.2 trillion by 2025, a compound annual The growth rate is 9.5%. And this market concentration is highly dispersed , the top ten companies in terms of revenue in 2019 only accounted for 7.9% of the market share.According to JD Logistics, at present, this kind of demand is undertaken by many scattered logistics companies in the market, but the service level is seriously insufficient, which brings huge opportunities for integrated supply chain solutions and logistics service providers such as JD Logistics. .
02 JD’s plan
introduced in JD.com, and also introduced 3 shares in JD.com. The demand for integrated supply chain logistics services in multiple vertical areas such as furniture, home appliances, etc.
From the perspective of growth rate, from 2020 to 2025, the integrated supply chain logistics expenditure growth rate of fresh food, fast-moving consumer goods and apparel will lead the growth rate of 18.8%, 14.6% and 12.7% respectively. Of course, the total demand in other fields is not low. By 2025, the demand for integrated supply chain logistics services in the automotive industry, 3C electronics, furniture and home appliance industries, and the pharmaceutical industry will increase to 446 billion yuan and 316 billion yuan, respectively. Yuan, 117 billion yuan and 60 billion yuan.
However, specific to each subdivided vertical field, the demand for supply chain management is quite different. For example, clothing has a large number of SKUs, multiple distribution levels, and obvious seasonal characteristics. It also has to respond instantly to the rapid changes in the tastes of end customers, and it also faces frequent reverse logistics challenges. The current omni-channel sales model also requires apparel companies to manage online and offline inventory flexibly and effectively.
Another example is fast-moving consumer goods,Although it is a daily necessities, the demand is usually relatively stable, but the changes in the peaks and valleys caused by various big promotions also bring huge challenges to production and inventory management. In order to achieve higher operating efficiency and inventory turnover throughout the year, companies need professional integrated supply chain logistics services to help them predict orders, so as to better manage production and storage. Due to the special category of fresh food, it needs better cold chain logistics capabilities and infrastructure to minimize the distance between the source of production and the end customer, and reduce the number of transfers.
To this end, JD Logistics has developed supply chain solutions for specific industries based on its supply chain service capabilities. Here, we understand the solutions of JD Logistics through two types of industries.
1. FMCG
The FMCG industry includes many different product categories, such as food and beverages, beauty care, personal care, and packaged groceries. Each product category has its own unique Some characteristics. But FMCG also has common characteristics, such as large quantity, low cost, high turnover rate and omni-channel distribution.
JD Logistics can provide FMCG customers with omni-channel inventory management and supply chain optimization solutions. According to JD Logistics, the core competitiveness of ’s supply chain solutions for this industry includes: omni-channel inventory management, optimized warehouse inventory allocation according to business needs, shelf life monitoring, multiple transportation methods, on-time delivery, and Forecast dynamic inventory management, and bonded warehousing.
For example, in the cooperation with Nestlé ,With its ability to predict market demand in different regions, JD Logistics can allocate and transport products between Nestlé’s various factories and various distribution centers, and deliver products directly to consumers anytime and anywhere, without the need to stay in other Nestlé warehouses or sales channels.
In addition, the technical capabilities of JD Logistics can also enable customers to simplify the inventory management of a large number of SKUs. JD Logistics' solutions can also enable customers to fully understand their own supply chain, such as the number of goods available for sale, geographic location of the goods, remaining shelf life, and traceable transportation routes. Customers can also make better business decisions based on the data provided by JD Logistics, thereby significantly reducing time and other supply chain management costs.
2. Home appliances and furniture
The size, weight, and value of home appliances and furniture products are unique, so related companies will face special challenges in fulfilling their orders. For example, the cost of warehouse storage and transportation may be high and difficult to optimize; in warehousing, transportation, assembly and installation services, many companies need to hire a separate service provider, which brings difficulties to coordination and cost control. In addition, home appliances and furniture also have the characteristics of industrial agglomeration, and manufacturing plants are mainly concentrated in a few areas of our country.
JD Logistics' solution is to build some warehouses near the concentrated areas of home power plants and furniture factories, so that customers can directly ship products to the nearest production warehouse, thereby minimizing storage and transportation costs. JD Logistics’ intelligent warehouse management system, bulky distribution network, and last-mile delivery service can help JD Logistics better provide comprehensive services to customers in the home appliance and furniture industry, including integrated management of warehouses across sales channels, high efficiency and Low-cost performance and delivery, and high-quality door-to-door and installation services. In addition, JD Logistics also provides after-sales service. extends from factory package to door-to-door delivery, assembly and installation services and after-sales service-end-to-end supply chain solutions and logistics services such as JD Logistics.Can greatly reduce customer management and performance costs.
03 has many advantages, fundraising direction _strong19span _5span7span _strong19 pstrong _5span7span _p2
There must be a certain infrastructure, a corresponding network, a corresponding technological capability, a clear understanding of customer needs, relevant experience, and so on. The reason why JD Logistics can do this is also due to its special growth background.
First, JD Logistics started out in JD Group. Although it has moved from enterprise logistics to logistics enterprise, is closely related to business flow. It not only has stable e-commerce orders, but also can penetrate into business flow. Even further upstream, it has accumulated proprietary technology and professional knowledge, has an in-depth understanding of business flow, and designed and developed a comprehensive and integrated logistics network covering a wide range. Judging from the results, JD Logistics assisted JD Group to stabilize the inventory turnover days below 40 days. In 2020, about 90% of online retail orders processed by JD Group through the JD logistics network can be delivered on the day or the next day.
Second, JD Logistics has established a robust and diverse infrastructure. Smart storage facilities represented by Asia One have laid the foundation for efficient inventory management.Highly covered and highly coordinated warehousing network, integrated transportation network, distribution network, bulky network, cold chain network and cross-border network, not only provides guarantee for the ultimate experience of JD logistics output, but also allows it to be one-stop Satisfy all customer supply chain needs. By reducing the number of handling and shortening the distance between the product and the consumer, it not only brings about an improvement in timeliness, but also brings customer's warehousing demand, which is also better for it The development of warehousing and distribution supply chain services provided assistance.
Third, powerful supply chain technology. The traditional single supply chain logistics service is still labor-intensive, and the level of automation is relatively low. Due to the narrower business scope of a single supply chain logistics service provider, the use of data insights is also limited. In comparison, JD Logistics has more comprehensive coverage and deeper insights, and of course it also invests heavily in technology. In addition to well-known cases in the industry, such as Asia One and unmanned warehouses, JD Logistics is also continuing to improve its automation, digitalization and intelligence by adopting underlying technologies such as 5G, artificial intelligence, big data, cloud computing, and the Internet of Things. Ability to make decisions. Intelligent algorithms can also achieve efficient collaboration and sharing, and intelligent decision-making in areas such as sales forecasting, commodity distribution planning, and supply chain network optimization.
Fourth, an increasingly rich customer base. As of 2020, JD Logistics has provided services to more than 190,000 corporate customers, covering a wide range of industries such as fast-moving consumer goods, clothing, home appliances, furniture, 3C, automobiles and fresh food. As of September 30, 2020,The number of JD Logistics integrated supply chain service customers reached 46,000. This has a large number of customers in various fields. On the one hand, it has deepened JD Logistics’ understanding of different industries, thereby developing and improving more efficient supply chain solutions. On the other hand, it has also improved the utilization efficiency of JD’s logistics infrastructure. The ability of business operations. With the deeper cooperation, the relationship between JD Logistics and related customers has become closer , creating a strong brand image. The future potential of JD Logistics also depends to a large extent on the growth of external customers.
According to the plan of JD Logistics, the main purpose of this IPO fundraising is to consolidate and enhance its competitiveness in the supply chain, such as upgrading and expanding our logistics network, development and supply chain solutions and logistics services related The advanced technology of the company, as well as the breadth and depth of extended solutions, deeply cultivate existing customers and attract potential customers.
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