Dialogue with Chairman of ZTO Express: Why was the express delivery giant born in Tonglu?

It is understood that ZTO Express has ranked first in market share for three consecutive years. In 20 14, shentong used to be the largest express delivery company in the industry, and this position changed hands in 20 15. After that, Zhongtong continued to exert its strength at 20 14 and 20 15, and maintained the first market share at 20 16.

Zhongtong's 20 18 financial report shows that more than 8.5 billion packages were completed in the whole year, up by 37. 1% year-on-year, surpassing Shentong and Tong Yuan, predecessors of Tongda Department, ranking first in the industry for three consecutive years; Zhongtong's operating income reached 176 billion yuan, and its adjusted net profit reached 420 1 billion yuan, up 30. 1% year-on-year. In terms of profitability, Zhongtong is even catching up with SF.

On the development of Zhongtong itself

Q: What are Zhongtong's plans for internationalization now?

L: Internationalization must be two growth points of future express delivery, and the other is rural express delivery. The growth rate of cross-border business is much higher than our original focus, and Zhongtong is also actively deploying cross-border business. With the strengthening of various capabilities, the proportion of internationalization will gradually increase, and the distance from international giants should be getting closer and closer, which is an inevitable trend.

Q: Zhongtong can come from behind and develop so fast. Everyone thinks it's because of its cost advantage. Why can it do this?

L: Zhongtong is indeed more efficient in the whole industry. Low cost and high efficiency. Then come from the back and go to the front. Every enterprise has a different style, but there are reasons behind it. Zhongtong's culture is simple, so our company is simple.

After 2009, I judged that it was a turning point for express delivery to usher in spring, and this industry must have dignity in the future. The second is that rich people will come to do express delivery. After the promulgation of the Postal Law, I think social capital will definitely step up its involvement.

Zhongtong did something different from others. The first thing is to gather people and get them together. We started the shareholding system reform, and many stakeholders became the same stakeholders. Originally, we sent a boss by express in each province, called all these bosses, and all the shares of the company were replaced and sent to Zhongtong Group. This will make the big cake bigger. Let's share it. What achievements have we made after the shareholding system reform? That is to say, unified thinking and smooth government orders, because the franchise system is difficult to achieve smooth government orders, because everyone counts his own accounts.

The second is capacity building. After the merger of these companies, the financial resources of the whole country are centralized and the central finance is centralized. At that time, of course, the profit was not too much. I can earn 200 million yuan a year, so I invested all these 200 million yuan in infrastructure construction. Zhongtong buys the most land in today's industry, so our cost efficiency is very obvious. The site utilization rate is higher, so the front-end burden will be lower and the front-end will be more competitive.

Third, there are some differences in management capabilities in all aspects of operations. Fourth, I think the team of Zhongtong is strong inside. I sum up a word myself, that is, the strength inside. Therefore, we talk about the capital market differently. In 20 14, when we talked about financing, the industry valuation was the highest, but at that time, the status of rivers and lakes was much higher than ours, and Zhongtong was not the largest, ranking probably third and fourth. At that time, the first round of financing was 40 billion yuan, 20 15 arrived, and 20 16 went public, so I told them that Zhongtong would go public in the United States, with a valuation of10 billion. I have all the top investment banks. When 20 16 went public, we were the most listed companies in China except Alibaba.

Let me put it simply: if you respect yourself, others will respect you. I always thought that China Express was underestimated, and I think so today. The valuation of 400 billion-500 billion is seriously underestimated. Our low price today actually has a lot of room for growth.

On price war

Q: We know that several giants of express delivery are all from Tonglu. At present, this industry is also in a state of relatively low gross profit margin. If our express delivery company fights a price war in the future, it is possible that several companies will sit together and discuss this matter.

L: The course of express delivery is from all-round competition to leading competition and then to oligopoly competition. In fact, most industries are like this. Especially the characteristics of the express delivery industry are very obvious. Because the benefits brought by the scale of express delivery are cost-effective, it is completely different. Let's look at the course of China Express. In the past two years, in fact, the second and third types of express delivery enterprises have successively withdrawn, which proves that the industry has gone through the first stage, that is, the stage of comprehensive competition, and has entered the stage of leading to oligarchy.

So the price war, I think, every enterprise will have its own considerations. Let's look at it from another angle. In fact, in the first half of this year's financial report, most of the profits of listed companies achieved growth or stabilization. So I think the price war is also a kind of market behavior, which is determined by this industry. My own judgment is that the price will definitely stabilize and eventually pick up. We should see that when the competition is fierce, it is actually the beginning of the turning point.

On the development of express delivery industry

Q: What is the biggest bottleneck in the whole express delivery industry now?

L: Personally, I think that although the growth rate of China Express has slowed down in recent years, its absolute value is unprecedented. Express delivery has entered the era of annual business growth of10 billion pieces, and the overall growth rate is very large. The reason behind its rapid growth is the high cost performance of the express delivery industry in China. In fact, the happiness index of our users is very high. It is precisely because of the high cost performance that China Express can continue to develop at a medium and high speed, which means that consumers can buy more things with less money.

Q: What is your forecast for the future development of the express delivery industry?

L: For the future, I think the contribution of courier companies to society and the return to couriers have just begun. Looking at today in five years, I believe that the media, the government and the express delivery practitioners did not expect the express delivery to become what it is today. But I feel that from the next five years to today, in fact, express delivery is still very few.

Q: What kind of competitive situation will express delivery enterprises present in the future?

L: I feel how Zhongtong came from. Our breakthrough from a single point is to make the main business efficiency of express delivery the highest in the industry and have a cost advantage. The future competition must be the competition of ecological chain, in fact, it is the competition of resource agglomeration. In the future, express delivery must not be alone, it must be a competition. Cluster operation is the competition of integrating resources and capabilities. The future express delivery will certainly gather a lot of resources, and then many formats will be born and many companies will be established.

Talking about the business environment

Q: Do you think the business environment has changed from before to now?

L: China Express has today. In fact, I think one of them is the product of reform and opening up, that is, the economic development of China. The second is a very good business legal environment and policies that are very conducive to the development of the industry. Actually, we went to see the development of express delivery in China. It has a turning point, that is, the promulgation and implementation of the Postal Law in 2009. Before 2009, my conclusion was that people who can find jobs rarely do express delivery, people with money rarely do express delivery, and people in cities basically don't do it. After the promulgation of the Postal Law, the legal status of private express delivery was determined. At this time, social capital and investment capital began to intervene, and express delivery also ushered in rapid development. Without the new Postal Law, express delivery would not be today.

First of all, it can maintain a medium-high growth rate because it is cost-effective and enables consumers to buy more things with less money.

Second, we can sell our manufacturing and agricultural commodities to further places and sell them at better prices. Today, the agricultural products of a place are picked by farmers from the fields and trees and sold in the market. The cost is much higher than that of express delivery to all parts of the country, and the distance is shortened. Today's express delivery volume, I feel like a monster. Compared with the past, the company's market value is not low, and many people are employed and started businesses on this platform. I think the express delivery industry has great potential in the future. I personally feel that this industry may reach a trillion valuation, and even a company may reach a trillion valuation.

Third, it actually has a very large imagination. For example, in fact, we are not just a courier company, but an empowerment platform. Zhongtong only does two of the four links of express delivery, namely, receiving, forwarding and dispatching. We help people who send and receive express mail to be more competitive, so that they can enjoy better service at lower prices and reach more customers. In the future, we hope that the 300,000 couriers of Zhongtong platform can move from employment to entrepreneurship and help him become a small boss.

My own idea is that the more important reason why China Express can have today is to stimulate the motivation of these entrepreneurs. The fundamental point of the empowerment model is to solve the problem of who owns food. For example, receiving express delivery, most of the money is earned by couriers, and the platform only earns a small part of the money. This model is actually the most endogenous. I believe this industry will be very good in the future.

Talk about Express Delivery Tonglu Port

Q: At present, Tongda Department is closely related to Ali. I want to know if there is any idea of Tonglu gang holding a group when choosing Ali?

L: Our relationship with Ali is actually a relationship of * * * health * * glory and cooperation. To put it simply, e-commerce can't do so much without express delivery, so it is a synergistic relationship. Ali has its advantages, digital advantages, information advantages, the advantages of products behind it, a bigger empowerment platform and more resources gathered. The courier company has a scene advantage. For example, there are millions of outlets involved in villages and towns, and there are one or two million people in our enterprise. These 2 million people have direct contact with customers. How can we make good use of resources, reduce costs, let the costs in the whole ecological chain return more to customers, let customers increase their trust, and then buy more things? Actually, this is the logic behind it. It is out of this idea that we believe that Zhongtong should go further, and only with more powerful partners can it go further.

Q: Why do you think Tonglu can get out of so many excellent express delivery companies? What are the characteristics of Tonglu Express entrepreneurs?

Lai: Tonglu gang-this is determined by specific historical conditions.

My own life and the world must be fair. Why did Tonglu produce a courier company? I sum up myself, homesickness, affection and friendship. Tonglu's economy was not very developed in the 1990s, so it was difficult to find a job. Then these people have the simplicity of mountain people. Because of mutual trust, mutual help and mutual support, Tonglu's express delivery enterprises were born.

Why doesn't the city express? One of my earliest teachers was from Hangzhou, and she was very familiar with express delivery. I had tea with him before I made the courier and asked him how he did it. He said how much money do you have? I said how much money I had, and he said that it was all in the knowledge book of express delivery, and then guided me. I said, teacher, why don't you do express delivery? He said I couldn't do it because I had no one. My five sisters have been doing express delivery for four or five years. Our sisters don't know what I do. We basically don't communicate. We meet once or twice a year at most, that is, having tea and eating during the New Year. He said you could do it in that place. People there believe in strength and help their neighbors. Everyone trusts each other. So I think trust is the foundation of success in a place. Of course, trust has two aspects, which can be extended by four words-ability and character. It is the simplicity, mutual trust and no bullying of our Tonglu mountain people, and then slowly help our neighbors support this industry.

In fact, going further has something to do with our Tonglu culture.

Let me just talk about our village, with more than a dozen families and more than 70 people. No one in our village has been divorced and no one has been to the police station. How much trust does this country style have? Therefore, the ties of nostalgia, affection and friendship, mutual trust, mutual support and mutual help are also related to Tonglu's simple culture.

There is a Zhongtong village in Tonglu called Zhongtong Jiayuan, all of whom are our Zhongtong people. Why did I build this is also a nostalgia for the original ecological countryside. When I was a child, I felt that there was only one family in a village, and all the pigs were killed in the country for the New Year. Everyone in the village can eat meat. This feeling is actually an emotional bond of the Chinese nation that lasted for 5,000 years.

On the Construction of Tonglu Express Industry

Q: What is the strategic significance of Tonglu in Zhongtong?

L: First of all, I'm from Tonglu. I think it's every enterprise that goes back to my hometown. As long as it reaches this level, it is inevitable that everyone has such an idea or attitude.

Tonglu, in my own feeling, is moving from the hometown of couriers to the real gathering place of express delivery industry. I have come into contact with many top financial talents in the world. Every time I bring them to Tonglu, they like Tonglu very much. I have been recommending Tonglu to government leaders for lack of talents. If these people are led to Tonglu and let them live in Tonglu, the resources behind them are very powerful. We can't understand how many things you said he would produce directly with Tonglu today. But if he is allowed to invest in Tonglu, the capital financing behind it will be a big article. I am thinking about it myself, because Zhongtong itself is a group of people who come out of the countryside and trust each other through emotion, but their ability and experience still have a ceiling, and I have to gather such a group of experts around me.

Therefore, I believe that the future competition of a place must be the competition of talents. Whoever comes to you will determine your future direction. The future development of a place must be a human problem, and high-end people must be attracted to Tonglu. So we have done many projects in Tonglu, and the local contribution will increase. Personally, I think it is entirely possible for Tonglu and Zhongtong to produce several companies with tax payment exceeding 100 million in the future.

Q: Tonglu wants to build a "hometown of express delivery industry". What do you think of this?

Talking about going out

Q: What are the opportunities and challenges for enterprises to go global now?

Q: What are your plans for diversification?

L: To the west, China express delivery enterprises have been very successful, and the penetration rate of Zhongtong township outlets in China has exceeded 90%. This is very remarkable. Basically, like the Yangtze River Delta, villages and towns are all-inclusive and fully covered. For example, in Shanghai, every household has arrived. Zhejiang may be like Tonglu. My hometown has not arrived yet, but our hometown can actually arrive, mainly because the scale is not enough.

Going out is going to sea. Of course, it is still far behind the international giants, but we must see our own progress. Our growth rate is very high. It used to be tens of millions a year, but now it is tens of billions a year. Of course, there is still a gap compared with hundreds of billions of international giants. So there is still a market and a process.

In my own opinion, in fact, every enterprise should be very clear about what it wants to do and what it shouldn't do, instead of going out blindly. Because the overseas market is actually limited, not unlimited, and the domestic market is actually unlimited, so we must do unlimited first. Therefore, every enterprise should consider its own different situations and different needs. China enterprises now have opportunities, because globalization is bound to be the trend. It must be a trend to buy globally, sell globally and sell goods further away.