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By Xu Yiwen
Source: zinc Finance (ID: xincaijing)
The old business of intra city freight has ignited a new fire.
Just last Thursday, Didi disclosed a new round of personnel adjustment through an internal letter. The first thing was to merge the original two wheeled vehicles, Valet driving, errand running and freight transportation into “urban transportation and service business group”, with Fu Qiang as CEO and director of the safety committee of the business group.
It is worth noting that Fu Qiang was the CEO of the online car Hailing platform company and the person in charge of Didi’s core business. Therefore, it can be seen that didi attaches great importance to urban transportation business.
Just half a month ago, manbang group completed a new round of financing and announced to enter the city’s freight business, adding a helping hand to this extremely busy industry this year.
In the past, there were old players such as huolala and kuaigou. Later, didi and manbang, new players, entered one after another. A new round of reshuffle appeared in the city’s freight industry.
At present, there is no absolute leading enterprise in this relatively traditional format. Looking at the war situation and fully grasping the market pain points, Internet players with operation ability, technical reserves and brand advantages may become the winners in this new campaign.
A piece of cake that everyone wants to eat
Intra city freight is a traditional blue ocean.
First of all, this market is large enough, but the existing formats are relatively scattered. It is one of the few trillion level markets left by the Internet with a lack of incremental growth.
According to the Research Report of iResearch consulting, in the past three years, due to the steady growth of China’s entire logistics industry, intra city freight has also maintained an annual growth rate of more than 7%, and will exceed trillion yuan in 2020.
More importantly, the Internet penetration rate of intra city freight transport is not high. In 2019, the transaction volume of China’s intra city Internet freight platform is only 49.5 billion yuan, so there is still a lot of room for Internet companies to further cultivate.
In the case that the base plate is large enough, the city freight market has not developed a leading enterprise with monopoly status after years of development, showing a scattered feature.
According to the report on panoramic investigation and investment prospect forecast of China’s intra city freight industry from 2020 to 2026, CR10 (top 10 market share) of China’s intra city freight transport is only 3.5%. In contrast, with the logistics industry, CR10 in China’s express market has reached 84% under the integration of e-commerce competition.
This is mainly due to the demand for intra city freight transport and the desertification of brands. The main activity scope of intra city freight transportation is a single city, so there is a state of isolation between cities and cities, leading to the proliferation of local small brands, and a large number of transactions are still carried out in the traditional offline way.
The industry without integration means that for competitors, sooner or later, they have a chance to take a share. In the classic entrepreneurial theory, the biggest requirement for new market is “no giant”. In the case of the overall situation is uncertain, the starting line between new players and old players is very small, and it is possible to reverse the wind.
Therefore, no matter drop pressure heavy note or full help rush into the game, are expected things. However, this seemingly sweet cake is not really easy to eat.
Like most Internet platforms, Internet intra city freight still solves the pain point of eliminating information gap. The shipowners mainly based on C or small B lead to a problem of scattered demand and low Re purchase rate.
The same problem exists on the driver side. Most of the drivers registered on the platform are personal vehicles, commonly known as waiting for “Binghuo”, with different quality. How to manage drivers is a big challenge for the platform.
Putting aside the two sides of the transaction, Lao Piao, founder of grassroots logistics and a special commentator of the National Post Development Research Center, told zinc finance that the biggest problem for freight transportation is the non-standard service.
The online car Hailing of people carries people from a to B, and the service ends. The whole process is standardized. Freight is not the same, the size of the goods, weight, the way of handling, distance are all influencing factors. If nonstandard products are framed into a standardized transaction template, all kinds of problems will arise, which will put forward a great test on the operation ability of the platform.
On the whole, the intra city freight market is big and blue enough, leaving broad space for the Internet; on the other hand, the market is scattered and chaotic, which leaves huge challenges for participants. No matter who wants to integrate such a complex market, such as iron teeth gnawing at steel cakes, needs the strength of hard hitting hard.
A wild and dazzling Lake
Like most industries, intra city freight transportation has entered the Internet transformation period since 2011, and Internet companies have been constantly breaking into this river. Each entry point is not the same, strengths and weaknesses are also different, there is a sense of confusion gradually attractive eyes.
At present, the biggest player in the city freight market is cargo Lala. This inter city freight Internet platform, which was established in Hong Kong, entered the mainland market in early 2014. It is good at various efficient marketing means and has opened up a situation in a short time. As of Didi’s admission, the cargo market accounted for 50% of the city’s Internet freight market.
Labrador map source network
Unfortunately, after occupying the scale advantage, huolala did not make good use of this advantage, but had a negative impact on the whole industry ecology. At the driver’s side, cargo Lala began to launch a membership model to sell traffic to drivers in the name of membership fees.
During the previous visit, some drivers complained that they were forced to pay the highest level membership fee when they just joined the cargo Lala. According to zinc finance and economics, there are three stalls for Sala members, namely, 269 yuan basic package, 609 yuan luxury package and 859 yuan supreme package. Different cities have different membership fee prices, and different grades correspond to different points. According to the publicity on the driver side of the platform, members can receive high-quality orders. The higher the level is, the faster the order will be received.
In order to get a better stand-by, drivers will have to top up the members of the highest level. However, many drivers have no orders to receive after they have recharged the membership fee. Such a make complaints about it is often seen. It’s not easy to see the difference between the platform and the driver. At the same time of exploiting drivers, there are also negative comments about malicious price reduction on the Internet. The platform unilaterally reduces the freight and encounters a wide range of driver boycotts.
And in the cargo owner side, the word-of-mouth of cargo Labradors is also declining. In May this year, two million fans on Weibo disclosed that they had to pay a lot of money when they moved. The price for a 1.2-kilometer journey was 5400 yuan. A piece of information pierced the chaos behind the goods.
Weibo big V exposed goods Lala cut from microblog
The life of a fast dog is much better than that of a wild man. The predecessor of fastdog is 58 express, which relies on the living ecology of 58 city and focuses on the C-end moving market. Although the resources in the same city make the fast Dog Taxi have a relatively comfortable growth period, the side effects are also obvious, the brand awareness is not high enough, the loyalty of drivers is low, it is difficult to form their own unique advantages.
Fast Dog Taxi map source network
In addition to the two old players above, there are also the new man gang. Manbang has been developing in the field of trunk long-distance freight transportation, accumulating a large number of users, data and resources. According to the current data, there are more than 10 million certified drivers and more than 5 million certified cargo owners on manbang platform. It is expected that the platform will enter the same city for freight transportation.
Manbang group graph source network
A Xing (pseudonym), an investor who has been paying close attention to the logistics track for a long time, told zinc finance and economics that trunk transportation and intra city transportation seem to be an area, but the business details are quite different.
First of all, the most obvious difference is the user group. Shippers of intra city freight generally prefer C, but the demand of trunk transportation mainly comes from B end. For small B cargo owners and C-end consumers who have transportation demand for intra city freight, the popularity and influence of manbang have not penetrated into this field.
A Xing said that intra city freight transport has higher requirements for platform capacity. For trunk transportation, the platform only needs to meet the requirements of matching, while for the same city, it requires upgrading from matching degree to speed and flexibility. This belongs to internal skill, it can’t be practiced overnight. It can only be said that it is not impossible for manbang to successfully grab a piece of cake in the same city freight, but there is still a long way to go.
The fourth strong competitor is Didi, who entered in June. From people to goods, it seems logical to drop into the Bureau. Uber also launched the freight version of Uber freight after the development of online car Hailing to a certain stage, so as to extend its industrial chain.
Didi has no small flow advantage at the C end. Many people are familiar with didi even if they don’t know about Didi’s freight business. This kind of influence is not only in the hearts of consumers, but also in drivers. In past interviews, some drivers said that they joined didi freight because they trusted didi platform.
Intra city freight has been on the stage since 2013. Although some people have been salivating for the cake of intra city freight transportation, there is no one who can really eat it. A Xing believes that urban freight transport and community group buying are similar, both belong to the pain point for a long time. It seems that all players have it, but no one can run through the whole mode.
The market is waiting for competitors who can really innovate.
A new war decided by technology and service
City Internet freight and any previous industry internet revolution, is a revolution in service and cost. In the end, the competition is nothing more than who has the highest efficiency, who has the lowest cost, and whose driver can make money, who can win.
The operation mode is the most able to reflect the technology gap. At present, the Internet platform operation mode of intra city freight transportation is mainly divided into two types: the widespread order grabbing mode represented by freight Lala and the typical order distribution mode with didi as the typical one.
In order grabbing mode, the decision-making power is given to the driver, and the weakness of human nature will inevitably lead to the driver only taking the order which is beneficial to him and pursuing the individual optimal solution. If the platform management is not good, it is easy to lead to the phenomenon that the driver grabs the order maliciously, selects the single, and even grabs the single plug-in phenomenon one after another.
The dispatch system is relatively more scientific, it pursues the global optimal solution. When a city has thousands of trucks to dispatch, the intelligent dispatch algorithm can maximize the efficiency of the whole city.
A Xing told zinc finance and economics that the dispatch mode is highly adjustable, which is based on the intelligent degree of the system. It’s not hard to understand that Didi’s confidence in doing so is based on its daily single volume of tens of millions in the field of travel. In contrast, the unit volume of the whole city’s freight transport is only one million, so for peers, the technical advantages of didi freight can be called dimension reduction.
Graph source network
It is the technical level that changes the cost structure of the industry, while the operational capability determines the service level of the industry. The operation ability of intra city freight transportation is mainly reflected in the ability to recruit, train and manage drivers when the city is opened.
Previously, the operation requirements in this industry have been missing for a long time; the platform can not or unintentionally manage, constrain and guide drivers, and drivers often receive private orders, ask for exorbitant fees, and charge indiscriminately.
We have to feel sorry for the goods. Under the condition that the market scale occupies an absolute advantage, it has not been able to make good use of the network effect to improve the service level of the industry. Instead, it has been delayed by the management ability and become the target of the industry to be attacked.
In terms of operation, Didi is perhaps the most experienced enterprise in the industry. Although one is the field of travel, the other is the field of logistics, but the object of management is the same driver group. Compared with other players, Didi freight can quickly copy the management system of online car Hailing drivers and form the whole life cycle management of truck drivers. According to the survey of zinc finance and economics, the net recommended value and retention rate of drivers of didi freight are currently the highest in the industry.
Of course, only technical and operational capabilities are not enough to win the final victory. With the development of the Internet, the competition between products, platforms and platforms is no longer a contest between technology houses. Capital is also one of the important factors to be considered.
Sufficient capital has become a necessary condition for a new platform to enter the market. Although manbang recently completed $1.7 billion in financing, it remains to be seen how much ammunition it is willing to invest in the totally unfamiliar field of intra city logistics. Didi has also said several times that it is determined to invest and win in the logistics field of the same city. At present, the actual effect is considerable. Didi freight has opened eight cities in the Sichuan Chongqing economic circle and the Yangtze River Delta economic belt, with a daily unit volume of more than 100000. According to the public report in August, Didi freight has gained 50% market share in the opened cities.
After several years of fierce fighting, it seems that the pattern of intra city freight transport has been settled, but in fact, there is a long way to go. Now, the situation is rising again. The four Party saw battle may promote the development of the existing business form to a new stage.
(statement: This article only represents the author’s point of view, not Sina’s position.)