"Price War" Slows Down, The Turning Point Of Express Delivery Industry Has Arrived?

The "price war" in the domestic express industry seems to have signs of a cease-fire.

A-share express listed companies the latest business briefing in June, the delivery price rebound signal. The reporter of 21st century economic report noticed that from the price of Express single ticket disclosed by Shunfeng, Yunda, Yuantong and Shentong in June, the single ticket income of the four listed companies improved on a month on month basis. Among them, Shunfeng, Yuantong, Shentong single ticket prices rose, Yunda flat.

It is worth mentioning that compared with the same period last year, the single ticket price of Shentong has even increased.

On July 2, the State Administration of market supervision and administration of the people's Republic of China solicited public opinions on the provisions on administrative penalties for price violations (Revised Draft for comments), and made clear the punishment measures for "low price dumping".

Can the policy release strong intervention intention effectively curb the "price war" in the express industry? Some industry insiders told reporters of the 21st century economic report that although it is not realistic to completely "end the price war" in a short period of time, it is clear that a single price war can no longer become a competitive mode that express companies rely on for a long time.

Month on month growth of single ticket income

Shortly after the announcement of the semi annual performance forecast, the operating data of SF in June was unveiled.

In the first half of this year, the company is expected to realize a net profit of 640 million yuan to 830 million yuan, a decrease of 78% to 83% over the same period of last year. This means that, in the first quarter of the loss of nearly 1 billion yuan, SF's operating conditions in the second quarter improved significantly.

It is an important factor that the business volume ring ratio has been greatly improved.

Benefited from the impact of the "618" e-commerce day, the volume growth rate of the whole domestic express industry rebounded to more than 30%, exceeding the industry expectations. According to the statistical data of the State Post Office, in June, the business volume of express service enterprises in China completed 9.74 billion pieces, an increase of 30.4% year-on-year; Business income reached 91.63 billion yuan, up 15.0% year on year.

But companies are divided. According to the operating data, the business volume growth rate of A-share "Tongda" listed companies is lower than the industry level. Among them, Yuantong completed 1.488 billion pieces of business, with a year-on-year increase of 26.79%; Yunda completed 1.642 billion pieces of business, with a year-on-year increase of 29.29%; Shentong completed 908 million pieces of business, a year-on-year increase of 4.82%. It is worth mentioning that Shentong's business volume growth has been low to single digit for two consecutive months, and the sustainability of its volume growth has been tested.

In June, SF's business volume growth gap with A-share "Tongda system" listed companies. In the same month, the company completed 951 million pieces of business, a year-on-year increase of 38.03%. It should be noted that SF's business volume increased by nearly 10% month on month in June compared with May. In the same period, the business volume of Yuantong, Yunda and Shentong was almost equal.

"June's growth rate increased month on month. On the one hand, it benefited from the" 618 "promotion activities of major e-commerce platforms in the middle of the year, and on the other hand, there was a strong demand for fresh fruits and other agricultural products." According to the analysis team of Anxin securities transportation, Shunfeng's market share has increased under the drive of e-commerce products, while the share of "Tongda system" has fallen to some extent compared with the same period in 2020, or it may be affected by new entrants such as GEE rabbit.

However, it is gratifying that although the market share of each express company showed different performance in June, the overall single ticket income increased month on month. The single ticket income of Shunfeng, Yuantong and Shentong increased by 2%, 2.9% and 2.4% month on month, and Yunda was flat. A courier industry analyst told the 21st century economic report that the single ticket income of express companies since this year reflects different price strategies. Among these listed A-share express companies, Yunda's price strategy is still radical, and Shentong has even shown signs of abandoning the "price war" in recent two months.

Price decline or sustained easing

In the view of the industry, the price decline of express delivery has slowed down in recent two months, which is closely related to the release of regulatory signals.

In July this year, two documents related to express delivery industry were issued successively. On July 2, the State Administration of market supervision and Administration issued the provisions on administrative penalties for price violations (Draft for revision) for public comments. As for the act of "dumping at a low price", the document points out that in order to exclude competitors or monopolize the market, dumping at a price lower than the cost, disrupting the normal production and operation order and damaging the interests of the state or the legitimate rights and interests of other business operators, it shall be ordered to correct, the illegal income shall be confiscated and a fine of less than five times of the illegal income may be imposed; If there is no illegal income, a warning shall be given and a fine of 1% to 10% of the sales during the period of the illegal act may be imposed; If the circumstances are serious, it shall be ordered to suspend business for rectification or its business license shall be revoked.

On July 8, the State Post Office, the Ministry of transport, the national development and Reform Commission, the Ministry of human resources and social security, the Ministry of Commerce, the General Administration of market supervision and the all China Federation of trade unions jointly drafted the "opinions on safeguarding the legitimate rights and interests of courier groups". The document puts forward eight tasks and measures, such as interest distribution, labor remuneration, social insurance, working environment, corporate responsibility, standardized management, network stability, career development, etc., and initially defines the path to do a good job in the protection of the rights and interests of courier.

"The above two policy documents, in view of the pain points and difficulties in the development process of the current express industry, are expected to help the whole express industry return to healthy, rational and sustainable development." The aforementioned analysts told reporters of the 21st century economic report.

It is worth noting that in Yiwu, Zhejiang Province, which is known as the weather vane of express industry, the single ticket income of express delivery in this region has also rebounded. It is reported that in April this year, the 70th executive meeting of the Zhejiang provincial government deliberated and passed the "Regulations on the promotion of express delivery industry in Zhejiang Province (Draft)", which stipulates that express operators shall not provide express services at a price lower than the cost; E-commerce platform operators shall not use technology and other means to block the normal service of express operators; Platform express operators shall not prohibit or attach unreasonable conditions to restrict the entry of other express delivery operators. In addition, Jiangsu, Guangdong and other regions have also issued relevant documents to prohibit unreasonable competition.

Dongxing securities in this analysis that the introduction of the policy as a whole is good for the healthy development of the industry“ On the one hand, the direct supervision of low-cost dumping helps industry participants avoid vicious competition and focus on how to optimize services. On the other hand, the constraints on the platform economy can enhance the bargaining power of express companies in the face of e-commerce platforms, and help to stabilize the unit price of the express industry. "

"In the long run, the" price war "in the express industry will continue, but the vicious" price war "based on money burning subsidies will be severely limited, and the basis of" price war "will return to the correct path of cost control and fine management." The agency said.

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