As competition in China’s logistics industry intensifies, newcomer seeks significant overseas market share
Indonesian parcel delivery startup J&T Express (Chinese: 极兔速递) launched its network in Mexico on February 24, making its first foray into the Latin American market.
J&T announced that it has established 12 sorting centers and 26 distribution centers in Mexico, covering key regions in all 32 states of Mexico. A local version of its mobile application will also be launched soon.
Ryan Zhang, director of J&T Express Mexico, called the move “a new step in J&T’s international strategy.” Previously, this rapidly growing company had a network spanning 10 countries, including China, Indonesia, Vietnam, Malaysia, Thailand, Philippines, Cambodia, Singapore, United Arab Emirates and Saudi Arabia. .
J&T’s rise is driven by a substantial share of delivery orders from Chinese e-commerce giant Pinduoduo (PDD: NASDAQ), whose model of using subsidies and low prices to woo consumers is also crucial to the success of J&T. J&T.
Zhao Xiaomin, a logistics expert, observes that J&T’s strategic expansion into the global market is due to the hypercompetitive environment in China’s courier market.
Founded by Jet Lee and Tony Chen, respectively former and current CEO of Chinese smartphone maker Oppo, J&T seeks to tap into emerging markets around the world. Charles Hou, vice president of J&T Group, described the company as a new generation of logistics company with “international genes”.
J&T has taken aggressive steps to increase its market share, including through the acquisition of struggling local competitors. In October 2021, J&T acquired the logistics business of its Chinese rival Best Express for 6.8 billion CNY (1.02 billion USD).
With a view to listing on the stock exchange, the dark horse faces challenges from other established companies such as STO (002468), YTO (600233), ZTO (2057: HK), Yunda (002120) and SF Express (002352) . Additionally, J&T will also face smaller but fast growing couriers including Deppon Express (603056) (Chinese: 德邦快递), JDL (Chinese: 京东物流) and UC Express (Chinese: 优速快递).