The development of Polar Rabbit Express

On May 7, 2020, a group of executives from Jitu China just learned that the average daily order volume exceeded 1 million in May. They plan to have a meal to celebrate this iconic moment after get off work.

Coincidentally, on the same day, Wang Wei led a group of SF Express executives to hold a seminar in Dongguan. The topic discussed at the meeting was: Does the entry of Jitu in China have any impact on SF Express. In the end, Wang Wei and the executives agreed that Jitu's domestic expansion would not have any impact on SF Express.

After the average daily order volume exceeded one million in May, Jitu exceeded ten million in just four months. It was only last year that the whole express delivery industry was discussing the issue of "The Rabbit is coming". As of June 2022, the average daily business volume of SF Express is stable at 34 million votes, while the average daily business volume of Jitu is stable at 40 million.

The real headache for domestic express delivery companies is not the scale of business or the price of a single ticket, but the fact that Jitu relies on the advantage of latecomers, breaking the delicate relationship and competition pattern of the domestic express delivery industry. "Everyone was at peace, but suddenly a wolf in a rabbit's skin came, and everyone was caught off guard."

According to an industry insider, before a meeting held by the competent authority of a certain region, the regional leaders of the two express companies angrily scolded the regional leaders of Jitu, "You Jitu are here to disrupt and completely disrupt the market."

When domestic competitors were still spitting and doing their best, on August 21, 2021, a flight to the United Arab Emirates took off from China. Two months later, the Jitu Middle East team was initially set up. In January this year Officially opened.

Extending the time, the development process of Jitu is completely different from that of domestic express companies. In August 2015, it was born out of the OPPO Indonesia team, and gradually gained a firm foothold in Southeast Asia. By March 2020, it entered China, and then acquired Best by constantly copying itself, and it seems that it has not yet stopped.

In the first six months of this year, the "wolf in rabbit's skin" entered the United Arab Emirates, Saudi Arabia, Mexico, Brazil and Egypt.

"Jump" from Southeast Asia to China

One day in the first half of 2015, in Jakarta, Indonesia, Li Jie, who was still in OPPO Indonesia at that time, held two meetings with his team.

The first meeting was actually Li Jie throwing stones to ask for directions. He threw out the idea of going out to start a business to the participants, and hoped that everyone would participate. According to people familiar with the matter, most of the team members are old OPPO people who have developed a strong executive force. Therefore, most of the participants at the meeting expressed their willingness to follow Li Jie to start a business.

A few days later, Li Jie held a second meeting on the topic of how to "must" join new entrepreneurial projects. At this time, the participants realized that the so-called entrepreneurial project is actually a courier service.

The above-mentioned person told Photon Planet that even if he didn't understand it for a while, as long as Jet (Li Jie's English name) decided to do things after careful consideration, no one could stop him.

In fact, 2015 was a once-in-a-lifetime opportunity. At that time, e-commerce in Southeast Asia was on the eve of the outbreak. The sudden rise of Shopee broke Lazada's "walking in the garden". Similar to the development process of domestic e-commerce, the confrontation between the two e-commerce giants will accelerate the development of e-commerce and stimulate the demand for express delivery.

Facing the fleeting opportunity, Li Jie chose the deadlift team to go to "Liangshan".

It was extremely difficult for Jitu to start the Internet in Indonesia. A local employee, Lu Mingyu (pseudonym), told Photon Planet that he originally worked in OPPO for retail and wholesale, and faced various businesses, processes, and emergencies in the express delivery industry. .

In order to let this "halfway monk" team find a direction, J&T (the self-proclaimed version of Jitu in the Southeast Asian market) has found many experienced peers from China to impart their experience. In addition, because the team members were recruited by Li Jiecheng to the new company, they cooperated and learned from each other, which shortened the "internship period" of the members.

What really makes Jitu gain a firm foothold in Indonesia is the "pay for being late". Southeast Asia not only has many islands, but also has relatively backward transportation infrastructure. In order to ensure the performance of the contract, it has to face high costs.

Jitu also gave all outlets a dead order: any outlet that is overdue must pay for it. Fortunately, market dividends, mature teams and service capabilities have enabled Jitu to gain reputation and share in the Indonesian market.

From July 2018 to January 2020, the restless Jitu started its expansion, entering Vietnam, Malaysia, the Philippines, Thailand, Cambodia and Singapore successively.

In addition, the founders also set their sights on the country. Before 2020, Jitu twice sent a team to China to investigate, and also found a market organization to do research. The results were good and bad.

The bad thing is that in terms of e-commerce products, the three links and one delivery have a market share of 78-82%; in terms of business products, SF Express, JD.com, and EMS occupy 85% of the market. The good news is that third-party agencies believe that the domestic express delivery industry can maintain a growth rate of 10%-15%. At the same time, the old players have developed for many years, and there is a certain "historical burden".

So from September 2019 to March 2020, Jitu China completed the preparations for its launch. People’s calculations are not as good as heaven’s calculations. Initially, the management set a goal of breaking 5 million daily orders by the end of 2020, but never thought that the business volume would far exceed the forecast. According to a person familiar with the matter, the average daily order volume planned by the province and region for a certain area was only two or three thousand, but the actual order volume has already reached 10,000. "Our distribution capacity cannot keep up with the growth rate of order volume."

Jitu had to passively follow the single volume, which exposed a lot of problems. For example, the construction of their own terminal outlets could not keep up, and they encountered resistance from peers, resulting in insufficient performance; lack of management experience and inefficiency; even, they could not obtain land in good locations as transshipment centers.

On October 29 last year, Jitu acquired Best’s domestic express delivery business for 6.8 billion yuan, which finally solved the urgent need. According to the analysis of the above-mentioned people, Best's terminal outlets, executives, and major customer resources have made Jitu really sit on the poker table.

Single-handedly "break into" the Middle East

As we all know, many people in the Jitu team are from OPPO, and the core backbone going to the Middle East also has a group of managers and employees of OPPO overseas teams. Jia Mei (pseudonym) is one of them. She expressed to Jitu at the end of 2020. willingness to join.

"If a new market opens in the future, I hope to give me a chance."

On the night of August 19, 2021, Jia Mei was cleaning the table after dinner when she received a message from the Jitu team: two days later, she will go to Saudi Arabia. For her, the mysterious Middle East does meet the desire to open a new market, and it also satisfies the heart of an entrepreneur. In the eyes of outsiders, this task is almost impossible: 2 days to prepare, 2 months to build a team.

For the OPPO overseas team, it is not surprising.

I received an appointment on the night of August 19, and the next day I studied immigration policy, packed my luggage, and did nucleic acid testing. On August 21, he got up and flew to Bahrain, where he planned to transfer to Riyadh, the capital of Saudi Arabia. When she left the residence, the superior who sent her to Saudi Arabia asked all the staff to see her off at the door.

"On the way to the airport, the boss also gave me a call. He said that he noticed that I took two suitcases. I was worried that I might be quarantined when I landed in Bahrain, and I couldn't take the boxes. It is recommended to use a small package of essential daily necessities. .” Life is full of encounters, and this caring leader also arrived in Saudi Arabia soon after.

All went well in Bahrain. However, something went wrong when transferring to Riyadh: Jia Mei was stopped by the staff, "interrogating me why I came here." Fortunately, after a while, she passed the cross-examination and entered Riyadh as she wished.

Another employee who participated in Jitu Middle East Qiwang, Alin, said that at the beginning of September, the seven regional heads of Jitu Saudi Arabia market gathered in Riyadh, which means that the countdown to "2 months Qiwang" has entered.

The first task is to find a Chinese who is proficient in the local language. With no clue, the start-up team had to "climb the stairs" through the local social networking site to find any clues. For example, are there any posts posted by Chinese when they are looking for jobs, or try their luck in a small group of Chinese people.

During the process of "climbing the stairs" on the forum, the start-up team saw a post from half a year ago, which was posted by a Chinese proficient in Arabic, so they contacted the "compatriot" with the idea of giving it a try. Coincidentally, the other party happened to be in the process of handing over the old and new offers. When they met face to face, they were moved by the sincerity of the team and decided to give up the offer and join Jitu Middle East.

Alin told Photon Planet that the first batch of people who joined the Jitu Middle East team should be the most stressed, because "you have to work on the day you join the company, and you have to work overtime until after two in the morning in the next few days."

A series of preparatory work, such as registering a company, applying for guarantees, opening an account, and recruiting personnel, are like the sandstorm in the Middle East. During this period, the Saudi government expressed a strong interest in the arrival of Jitu, and gave the green light all the way, and Jitu became the 20th official licensed operator in Saudi Arabia that combines "cross-border customs clearance" and "local delivery" licenses.

However, local laws and customs continue to test the members of the Jitu China team. First of all, any foreign company must recruit local people in personnel, finance and other positions. Fortunately, the team recruited a local person with experience in express delivery. With his help, the human problem was gradually solved.

When one difficulty is solved, more difficulties arise. "People, vehicles, and fields" are the three important links in the express delivery industry to make goods flow. It cannot solve the problem of vehicles and fields. Even if people are recruited, the team can only idle.

When establishing the transshipment center, the Jitu team encountered a big problem. The warehouse is located in a relatively remote location, and the network conditions are extremely poor, and it is even impossible to pull optical fibers at all. It is even more difficult to apply for a license. According to the regulations, it is necessary to install the equipment of the designated supplier in accordance with the requirements of the local government, ranging from warehouse monitoring to a trash can and fire fighting equipment.

According to a person familiar with the Middle East market, "the local regulatory authorities have no tolerance for sand. Once they find a problem, they will ask for rectification, but there is no clear requirement. Many times they need to figure out what they mean." Therefore, it took Jitu half a year to solve the warehouse license and other issues of the distribution center.

Later, the Jitu Middle East team figured out the way. If they can find a local consulting company, they can shorten the process that took three weeks to complete into a few days. So, relying on this method, Jitu quickly established more than 30 stores in Saudi Arabia.

The most difficult problem is the driver, this occupation is usually expatriate, such as Pakistan, India dominated. As a result, when switching to a new employer, a sum of at least 2,000 Saudi riyals (the local currency name, referred to as "sand", or about 4,000 yuan) must be paid to the insurer, and 10,000 sand (about 4,000 yuan) must be paid for the renewal of the residence permit every year. 20,000 yuan).

The special labor structure has led to the high labor cost of local express delivery, and Jitu has followed the local customs and adjusted its strategy according to local conditions.

A new paradigm for going overseas

Photon Planet found that the growth of Jitu in the Middle East market is similar to that in Southeast Asia and China: looking for a local emerging e-commerce giant to cooperate. In Southeast Asia it is Shopee, in China it is Pinduoduo, and in the Middle East, Jitu found noon.

"When we eat other people's cakes, the amount we get is not an increment, but a stock." Surprisingly, Alin believes that Jitu really has a firm foothold in the Middle East market, not relying solely on local partners.

He believes that the primary reason why Jitu can enter the Middle East is service, which is in fact a replica of the experience that was established in Southeast Asia.

On the one hand, after years of development, China's express delivery industry leads the world in infrastructure investment, management concepts, and network construction. Just like the Indonesian employees of Jitu, who relied on the training of Chinese mentors earlier, they gradually learned about express delivery from awareness, to practical operation, and finally to localization.

The Middle East team is no exception. Before entering the Middle East, the management divided the Saudi market into 7 districts, each district set up a distribution center, and then gradually penetrated down to form a courier network. Moreover, Chinese companies have far more control over the whole process of goods circulation than foreign companies.

For example, some overseas express delivery companies have introduced equipment for automated operations, but they have not considered the process of loading goods into vehicles, resulting in the need for more workers to lift goods onto the vehicles one by one. An industry insider told Photon Planet, "They never thought about connecting the equipment with the parking space from beginning to end."

Jitu seems to have changed the "playing game" of the express delivery industry locally. In the final analysis, the Chinese logistics industry is replicating its own experience.

Secondly, the special organizational structure of Jitu, especially giving a great say in the regional market. An industry insider said that Jitu adopts a management model of "unified standards for the group and a high degree of regional autonomy". Specifically, taking China as an example, the senior management of Jitu China is mainly responsible for the overall strategy, compliance, training and other matters. The head of the district is the boss himself and is responsible for its own profits and losses. This setting has greatly awakened the vitality of the organization. And this experience was replicated in Southeast Asia and now in the Middle East.

In addition, in terms of localization, the genes of the OPPO Indonesia team make Jitu more adaptable and executive.

E-commerce in the Middle East market is still in its early stages, and many people have not yet developed the online habit of electronic payment and e-commerce. The most troublesome thing is that the local area does not have a very standard and accurate delivery address in China. When the terminal is delivered, the courier often needs to use WhatsApp to determine the specific location for accurate delivery.

Even some ridiculous things happened. For example, the address reported by the recipient is a traffic light on an overpass—he believes that this is his pick-up location.

A cross-border payment service provider also mentioned the low penetration rate of local electronic payments. "After the domestic krypton gold game changed to a skin suitable for the local culture, the local tyrants couldn't stop at all. They not only asked to lift the limit of 999 yuan for a single recharge, but also often mailed cash to our local branches."

Various difficulties have still not stopped the rapid development of Jitu. It is reported that from June to August this year, the monthly growth rate of the daily average order volume of the Jitu Saudi market was as high as 79.4%, ranking first in the local area.

Just like a catfish, after Jitu stirred up the Middle East market, they encountered a situation they were familiar with in China: local friends and businessmen hoped to use price wars to snipe Jitu, and they also waved their hoes and poached people.

Because of the company's organization, its own capabilities and successful localization plans, the turnover rate of its employees is very low. Alin told Photon Planet, "Several foreign employees have worked in companies such as South Korea and Spain. They have never thought that work and life can be integrated, and they are not engaged in mechanical work, but a job that belongs to them. business.”

In the past Mid-Autumn Festival, the local team produced a greeting card with Chinese elements and local characteristics and a box of customized moon cakes, which made many non-Chinese employees feel a different company culture.

Interestingly, it took less than a year for Jitu Saudi Arabia to go from being unpopular in the recruitment market to becoming a popular one. In August of this year, Jitu Saudi personnel posted an ordinary job posting, which received more than 40,000 hits.

The Middle East is not the last stop

The success of a courier company going overseas may have a more "basic" value than other industries going overseas. Because express delivery to the sea means building a bridge to the new world.

Macroscopically, China's postal express industry encourages "two in and one out" (into the village, in the factory, and out of the sea). In July, Saudi Arabia added a new route between China and Saudi Arabia, and the relationship between China and Saudi Arabia entered a honeymoon period. We have reasons believe that the express delivery industry will become a springboard for domestic enterprises to go overseas to the Middle East.

Behind Jitu's rush in the Middle East, some domestic giants such as SHIEN, Yuanqi Forest, DJI, OPPO, vivo and so on are waiting for the opportunity to follow the bridge built by Jitu to the mysterious Middle East.

From a global perspective, if Southeast Asia is becoming a maritime crossroads for global trade, then the Middle East is literally a crossroads on the road to Eurasia. The expansion of Jitu so far is obviously not just as simple as becoming a regional logistics company, but also wanting to be embedded in the global logistics system.

"There is a kind of bird in the world that can never be shut up, because every wing of it is covered with the radiance of freedom."

The Jitu Middle East team does not seem to be planning to stop. At present, they first hope to make Jitu a leader in the Saudi market. On the other hand, they firmly believe that they will not be in Saudi Arabia forever and are always ready to open new markets.

"The boss may suddenly tell me one day in the future that tomorrow he will send me to a place that I have never been to to develop new business, and I may still be the same as a year ago, without hesitation, and go happily." Jia Mei said Say.

Maybe that's what's etched into the team's DNA.