Source | Public Account: CapitalWatch
Best Group (NYSE: BEST) announced the third quarter financial report of this year on Friday. Due to fierce market competition and downward price pressure, the overall operating conditions of the group have been affected.
However, the business volume of multiple segments of the group still achieved significant growth. The financial report shows that Best Group's operating income in the third quarter of 2020 will be 8.693 billion yuan (RMB, the same below). Among them, express business revenue was 5.08 billion yuan; express business revenue was 1.49 billion yuan, an increase of 8.2% year-on-year; supply chain business revenue was 450 million yuan, basically the same year-on-year; international business revenue was 220 million yuan, an increase of 125.9% year-on-year. Express freight volume increased by 31% year-on-year to 2.5 million tons; Zhou Shaoning said on Friday's earnings conference call that the growth rate of express freight was significantly higher than the industry average.
adjust strategy to boost confidence
Recently, the well-known domestic logistics company Best Group has made frequent actions, which has attracted attention. Through the "slimming" strategy to cut down the business store plus (shop plus is Best's national S2B2C deep distribution comprehensive service platform), express delivery business "change of command" and other measures, concentrate resources to do a good job in the main business express delivery, "go overseas "Strengthen the cooperation with Southeast Asian e-commerce, and quickly occupy the market share in the Southeast Asian e-commerce logistics market which is still in the blue ocean. Best adjusts its strategy from all aspects to bring confidence to investors.
After this strategic adjustment, Best will focus on its core logistics business. Johnny Chou, Chairman and CEO of
Best Group, said in a statement on Monday:
“In the past few quarters, store losses have gradually narrowed. In order to be able to consolidate in the increasingly fierce market competition. Market position, the Group will make strategic adjustments to focus more on the core business of logistics, strengthen the competitiveness of the core business, quickly respond to market changes, and improve profitability. Based on this, we believe that it will gradually withdraw from the store plus business and use funds Investing in the main business is in the overall interests of the company and shareholders.” Z2z
Best said that it is expected to withdraw from the store-plus business except for the self-operated WOWO convenience store by the end of this year; the original store-plus business online product procurement platform and management system Will be handed over to an independent third party to continue operations. Instead, Best focuses its resources on expanding its core businesses-express delivery, express delivery and supply chain management, and strengthens the collaborative operation of these core businesses to provide customers with integrated logistics and supply chain solutions.
Best also announced that the express delivery business has "changed". Wang Xiaoqing, the former general manager of Best Jiangsu branch, succeeds Zhou Shaohua as the senior vice president and general manager of the express business department of Best Group, and Zhou Shaohua will serve as Zhou Shaohua's special assistant. Wang Xiaoqing holds an EMBA degree from the University of Texas and has been the general manager of Best Jiangsu branch since 2009. Before that, he served as the senior sales manager of the Nanjing branch at UTStarcom.
bets on e-commerce
China is the world's largest e-commerce market, three times that of the United States. China's largest online retailer Alibaba Group (NYSE: BABA; HKEX: 09988) broke all records again on Double 11 last week, with sales reaching 74 billion US dollars from November 1 to November 11. This year's annual shopping festival is not only a sign of China's rapid recovery after the epidemic, but also a sign of the continued growth of e-commerce.
Publicis Communications chief business strategist and e-commerce podcast Jason&Scot Show host Jason Goldberg (Jason Goldberg) predicts that the sales of Chinese retail giants will break new records. He also believes that this trend will continue after the outbreak.
“If you win e-commerce in China, you win business,” Goldberg told Capital Watch at the end of October.
Now is the best time to seize the opportunity.
Best Express achieved a growth rate significantly higher than the industry average, mainly due to the company's focus on e-commerce products, economies of scale, and continuous network optimization.
In a highly competitive logistics market, Best has the support of Alibaba Group and a cooperative relationship with Cainiao. In September, Best is still with dishesBirds cooperate to provide cross-border logistics services for the entire link between China and Malaysia, achieving "one order to the end".
Internationally, Best has been expanding its business in Southeast Asia and other regions. Last year, the company launched express delivery services in Thailand and Vietnam. Despite the impact of the epidemic, Best entered three markets in Southeast Asia this year, and plans to operate 12 distribution centers and approximately 400 franchise stores in Malaysia, Singapore and Cambodia in the next three years. A recent report by
shows that cross-border e-commerce is one of the fastest-growing sectors in China. This year's transaction volume will reach 124 billion U.S. dollars, nearly double that of 2019.
In this fiscal quarter, the number of registered drivers on Best's online freight matching platform UCargo APP soared by 85% year-on-year to 280,000.
Alibaba, Pinduoduo and other Chinese giants are all accelerating to seize Southeast Asia in this booming market. As a third-party logistics provider that supports the realization and delivery of e-commerce, Best's international background puts it in a favorable position in the competition and can profit from this round of growth. Looking forward to the future, Best said that the company is actively carrying out strategic adjustments and organizational changes, focusing more on its core business with logistics as its core, and strengthening its core competitiveness, hoping to return the company to its profitable growth track.
