There was no doubt about the improvement and blessing of traditional industries by informationization. Almost any industry would undergo earth-shaking changes after informationization, and the logistics and express delivery industries were the same.
Before Li Mu started to build the logistics hardware, he had already started the road of informationization. At present, the logistics management system of Taobao Logistics was not only the first set of logistics information management system in the country, but it was even not weaker than the level around 2010 in his previous life.
Because Liu Shixiong had been on the frontline of Taobao Logistics, he was very familiar with the logistics management system of Taobao. In his opinion, this system was simply a divine tool. As long as a scanning gun was added to the key nodes of logistics, every link from receipt to transportation to delivery could be clearly recorded on the server. The improvement in the efficiency of the entire logistics was not small.
At this time, Li Mu asked Liu Shixiong, "In addition to our own land transportation network, how are the current aviation resources?"
Liu Shixiong said, "I have already started to cooperate with Ms. Lin Lin. All the cargo space resources of Southern Airlines have been exclusively contracted by our joint venture company. We have also taken a lot of the cargo space resources of several other airlines, and the proportion is increasing."
Li Mu nodded and asked Liu Shixiong, "What is the specific time limit for Taobao Express?"
Liu Shixiong said, "At present, if there is air route support from trunk cities to trunk cities, we can already achieve delivery within 24 hours. Usually, we receive the package before 6: 30 pm, and after sorting and packing are completed at 9: 00 pm to 12: 00 pm, we will load it together. Basically, it will land in the destination city before 12: 00 pm the next day, and the delivery will be completed before 6: 30 pm the next day."
"From trunk cities to non-trunk cities, if there is air route support, it will be delivered within 36 hours. The first half is the same as what I said before. We will first reach the trunk distribution center within 24 hours, and then the remaining 12 hours will be delivered and delivered through land transportation from trunk to branch."
"From non-trunk cities to non-trunk cities, if there is air route support, it will be delivered within 48 hours. Basically, it will be delivered from non-trunk cities to trunk cities, then from trunk cities to trunk cities, and then from trunk cities to branch destinations."
"From a non-trunk city to a non-trunk city, if there is no air route support, within 48 hours for those within 1,000 kilometers, and within 72 hours for those beyond 1,000 kilometers."
"If it's in the very remote southwest and northwest, users have two choices. Air transportation is also effective within 48 hours, but the price will be slightly higher. Land transportation will be much cheaper, but the time will be slightly longer. Generally, we promise delivery in five days."
Li Mu nodded and said, "This timeliness is already quite good, worthy of praise."
In the future, Shun Feng, the number one express company in the domestic express delivery industry, would basically have the same delivery time in the country. Therefore, in terms of delivery time, Taobao Express could basically be on par with Shun Feng in the future. The only difference was in transportation capacity.
Right now, although the national express delivery capacity had greatly increased, it had not yet entered the golden age of e-commerce. Under the current market demand, Taobao Express could guarantee this kind of timeliness, but if the transportation capacity doubled, it would definitely not be able to do it. In the future, Shun Feng would have the largest express delivery fleet in the country, but faced with the huge market demand, even Shun Feng would find it difficult to guarantee the timeliness, so the future of Taobao Logistics was still very long.
Thinking of Shun Feng, Li Mu asked Liu Shixiong, "How is Shun Feng's express delivery in Guangdong Province?"
Li Mu had once given an order to Liu Shixiong that against a small company like Shun Feng that relied on express delivery in Guangdong, Hong Kong, and Macau, they had to be fiercely attacked. Although it had not yet grown to a large scale, it had already opened up a gold mine with no losses. If they didn't get rid of it, as its capital grew stronger, it would one day explode and bring about an impact on the entire industry.
Liu Shixiong said, "Previously, we acquired a few fleets in Hong Kong that had the qualifications to transport between two places. Adding on the fact that we have been poaching Shun Feng's employees and fighting a price war with them, we have already dragged them to the brink of death. Currently, our express delivery time in Guangdong, Hong Kong, and Macau is a little faster than Shun Feng, and the overall benefits of our express delivery personnel in Guangdong Province are at least 30% higher than Shun Feng, and at the same time, we have better benefits. More importantly, we have kept the market price very low. Currently, our express delivery business is losing money, and Shun Feng doesn't dare to fight a price war with us. Right now, it should be operating at zero profit. Two days ago, I heard that they couldn't hold on any longer and are looking for financing."
"Financing?" Li Mu snorted and said disdainfully, "A local express delivery company wants financing? Financing to fight a price war with us? With Taobao Logistics and Taobao Technology here, which investor would invest in them? This beautiful dream is a little too unrealistic. "
Liu Shixiong nodded and said, "I think they basically have no chance. At most, they can hold on for another month or two, and then they will disband. Without a market, without profits, they have no advantage over us."
As he said that, Liu Shixiong continued, "Actually, with our current operating model, we have already become an existence that all the domestic express delivery companies can only look up to. It's not just Shunfeng, it's the same for other express delivery companies. They are now in a huge whirlpool. Although they want to be like us, with automatic sorting systems, logistics management systems, efficient fleets, and aviation resources, they don't have enough capital to operate such a huge project. The threshold is really too high, so they can only desperately lower the price, and the profit margin is already extremely low, almost at the edge of what they can bear."
Li Mu asked him, "Our overall cost is higher than theirs, right?"
"Yes." Liu Shixiong said, "Our overall cost is at least 30% higher than ordinary express delivery companies, mainly because of the large hardware investment in the early stage, high depreciation rate, high personnel costs, and so on."
Li Mu was silent for a moment, then said, "In other words, because our overall cost is high, we basically can't cut the edge of the other express delivery companies, and we will even leave some space for them to survive."
Liu Shixiong said, "That's right. For example, with the same route and the same weight, other express delivery companies can grit their teeth and lower their cost to 10 yuan, but our cost per unit can only be lowered to 13 yuan. This space of 3 yuan is left for them to survive."
Li Mu smiled slightly. "That's good too. After all, we have to let the industry develop as a whole, so we can't crush all the express delivery companies. The government and the law will not allow us to have a monopoly in this industry, but we can use our own methods to achieve a hierarchical monopoly."
Liu Shixiong asked curiously, "What do you mean by a hierarchical monopoly?"
Li Mu said, "For example, we can only monopolize the middle and high-end express delivery market, leaving a gap in the low-end express delivery market for other companies. In the entire express delivery industry, we are not in a monopoly position at all, nor are we involved in any monopoly operations. But from the user's point of view, we will eat up all the middle and high-end express delivery needs."
Liu Shixiong nodded. "I understand what you mean. This is indeed the most suitable for our current overall situation. With our huge asset management model, it's very difficult to lower our cost to the lowest level and fight with those companies at the lowest level. The sea is very deep, and there will always be places we can't go."
Lei Jianguo, who had been silent all this while, suddenly said, "Li Zong, Old Liu, I feel that it is far from enough for us to only focus on the middle and high-end market. Based on the domestic situation, no matter what industry, the middle and high-end market will never become the mainstream. Take the clothing market for example, more than half of the domestic market volume is supported by the middle and low-end market. It's the same for home appliances, mobile phones, and fast consumer goods. I have previously investigated the market share of daily chemical products. Although the daily chemical brands we see on TV and shopping malls in Beijing are all well-known brands, after doing the actual investigation, we found out that most of the market volume is supported by small brands that we don't know about. Moreover, the market volume is very large, almost covering the vast majority of the eight to nine billion rural population, and also a small portion of the urban population. The five yuan bottle of shampoo produced in Guangdong Province sells more than ten to twenty times more than the well-known brands like Pantene and Head & Shoulders. If we give up all the low-end express delivery market to these companies, it is very likely that we will give up more than half of the market volume to them in the future. This is a very big loss!"
Lei Jianguo's words instantly woke Li Mu up.
He always felt that it was amazing that Shunfeng could achieve that scale, that service, and that efficiency. But in the end, although Shunfeng was the only one in the industry, its market share in the industry was far less than its reputation. There were a large number of low-cost express delivery companies in China. Three Links and One Reach were just a few of the larger ones, but there were countless unknown express delivery companies nibbling away at the market share of this industry. If he only wanted to make Taobao Express into Shunfeng, then his imagination was very limited. Shunfeng's market value was at most 200 billion RMB, but a top giant like UPS had a market value of 600 to 700 billion RMB for a long time.
If he wanted to become a world-class logistics company, he must have sufficient market share. If he only focused on the middle and high end, it was obviously not enough. Li Mu recalled that in his previous life, at least 80% of the orders in Taobao did not use SF Express. This was because on one hand, the seller was reducing costs, and on the other hand, the buyer was also reducing expenses. Many sellers had a long-term relationship with an ordinary express delivery company. The starting price for a big customer's express delivery was as low as 3 to 4 yuan. Under the same circumstances, SF Express's price was probably twice as high. Therefore, most of the sellers would not choose SF Express. If the customer insisted on choosing SF Express, then the buyer would have to bear the additional cost.
Most of the time, when buying an item that cost tens of yuan, the seller would send it to SF Express, but the buyer would have to pay an additional 15 to 20 yuan. As a result, most of the buyers would not choose SF Express unless they were in a hurry. This was SF Express's lack of control over the low end of the market.
Li Mu had never been in the real estate business and did not understand the meaning of the low end of the market. Liu Shixiong was obsessed with building his own logistics system, so he also neglected the low end of the market. However, Lei Jianguo was different. The reason why he was able to make Xiaomi bigger and stronger was because of his keen sense of the low end of the market. No matter if it was a low price, low end model, or a low price, high end model, Xiaomi's product line was very good. Many of Xiaomi's "Mi Family" products basically relied on these two dimensions to compete with their competitors.
Li Mu got a very important inspiration from his words. He wanted to do both the middle and high end and the low end. This was the direction of all-round development. Otherwise, the smooth sailing in his previous life was the future of Taobao Express. There was no bigger pattern.
Then, Li Mu said seriously, "Old Lei is right. We can't completely give up the middle and low-end market. Otherwise, it will be very easy for these mobs to muddy the water. If we don't have the ability to fish in the muddy water, or we don't want to fish in the muddy water, then we have to suppress these guys. Once they muddy the water, we will have no food to eat!"
As he said that, Li Mu recalled Xiao Mi's method and said to Senior Brother Liu, "Senior Brother, I'll give you two missions. First, compress our cost even more and push down the blade edge even more. You said that they can reach 10 and we can only reach 13. This is not accurate because once they truly start to struggle for survival, they will be able to continue probing from the base of 10. Who knows, they might even find a way to push this number down to 5 in one go. At that time, we will be at 13 and they will be at 5. The space left for them in the middle will be too much!"
Liu Shixiong also realized the severity of the problem and nodded his head, "I understand. Next, I will think of ways to lower our operating cost."
Li Mu said, "The cost of operation and the time of service are different. Although we can provide the highest time of service to our users now, we can't rule out that in the future, many users will choose the former when they have to choose between cost and time of service. For the same express delivery, it costs 20 yuan to deliver within 24 hours, 15 yuan to deliver within 48 hours, and only 10 yuan to deliver within 72 hours. There will always be many users who will choose the 10 yuan price range, so not only do you have to think of ways to reduce the cost of operation, but you also have to better integrate our logistics system. We can't just let it play a role in improving the time of service, but also let it play a role in reducing the cost."
As he spoke, Li Mu asked again, "In order to ensure the timeliness of express deliveries, what is the utilization rate of the space and transportation capacity of each package, container, or in-plane cargo warehouse that we send out?"
Liu Shixiong thought for a bit and said, "Other than the very popular routes, which can be used up to 90%, most of the other routes are around 70%. For example, we need to send trailers from Yanjing to Jinling tonight. In order to ensure the efficiency, we have to send the trailers at 12 o 'clock at night. Even if we only load 50% of the trailers, we have to send them out on time."
Li Mu nodded and said, "That's the problem. From the perspective of cost, the more full the vehicles are, the more profitable they will be. But if we want to wait for the vehicles to be full, we have to waste time. If we don't want to waste time, we have to load as much as we can within the specified time, so we have to waste a lot of transportation capacity. So in the future, we might as well develop a low-end product line. The time efficiency of this product line will be automatically reduced in the system from the moment the parcels are sorted. For example, the parcels from Yan Jing to Jinling will be sent out even if they don't fill up within the specified time. But the parcels that choose the slow product line will be delayed in the sorting center until they are full or almost full. In this way, the overall cost of this batch of slow product line will naturally be reduced a lot."
Liu Shixiong immediately nodded and said, "Okay, I will start on this immediately. I will go find Fang Xudong tonight and talk about the requirements in this area. We will upgrade our system."
Select text and click 'Report' to let us know about any bad translation.
