Losing Money to Be a Tycoon

Chapter 1079: Traditional Express Delivery Company’s Countermeasure

May 31st, Thursday…

Shanghai, Shengyun Express Corporation headquarters.

Shengyun Express Corporation was currently the boss of the domestic delivery industry. It occupied half of the delivery business.

It basically covered cities at the prefecture level and above in the country and cities at the county level and above in developed areas, especially in the surrounding areas of Shanghai. It has basically achieved the goal of delivery without blind spots, and has even started the internal testing of overseas shopping transshipment business..

However, the reputation of Shengyun Express was not very good.

This company had been established for nearly twenty years. Its rapid development and growth mainly benefited from the franchise strategy. It had a huge advantage in obtaining market share quickly when the entire express delivery industry’s development was maintained at a high speed.

However, as the industry slowed down and the company developed, and the era of careful management came to an end, the disadvantages of this franchise system became more apparent.

On the one hand, there were many layers of networks and it was difficult to manage them. Many of the franchisee companies were more powerful and it was difficult to effectively execute the headquarters’ orders. The mixed services results might affect the end customers’ service evaluation;

On the other hand, the low proportion of self-operated transshipment centers will also reduce efficiency to a certain extent and extend the time required for express delivery.

Shengyun Express was a huge organization. It was even divided into three or four different delivery brands within the company. There was a certain competitive relationship between them.

Finding a way to solve these problems was the biggest headache for Shengyun Express in recent years.

At that moment, a few higher-ups of Shengyun Express were having a meeting to discuss some issues regarding the development of Shengyun Express.

The chairman of Shengyun Delivery was Nie Yunsheng, but he could not control the entire corporation. A few major shareholders and the higher-ups of the companies who were friends with him would support him most of the time, but they would often have different opinions.

Thus, if he wanted the entire corporation to develop in the direction that he had expected, he would need a large number of meetings to unify the internal thinking.

At that moment, the meeting had already reached the end stage. Most of the big proposals had been discussed.

A company Vice-President said, “Boss Nie, everyone, Tengda’s Upwind Logistics are preparing to build the air transport route. I have already organized a set of materials and distributed them to everyone.”

“Boss Nie, how should we deal with this?”

It would take two months for Upwind Logistics to officially prepare the air transport route but Lu Mingliang was already doing some simple preparations and publicity.

For example, he could distribute flyers during delivery and set up some display boards for publicity at Upwind Courier stations.

That was because the express delivery business was not like other businesses. Time waited for no one. If they waited for the air transport business to be completed before advertising and guiding customers to use it, it would be too late. The first few flights would definitely not be able to pull in many goods.

He had to advertise the location of Upwind Courier stations in advance. He could only receive a large number of orders when the cross-city delivery business opened.

Thus, this news naturally reached Shengyun Express.

The vice president had summarized all the relevant information into a report.

Upwind Logistics was currently targeting the ‘last mile’ delivery business. Shengyun Express had also been working closely with them.

At the moment, Upwind Courier stations were expanding rapidly in Jingzhou, Beijing, Shanghai, and Guangzhou. The number of shops was increasing rapidly.

On the whole, it was still not comparable to Shengyun Express. However, once Upwind Logistics’ cross-city delivery business opened, it would definitely pose a threat to Shengyun Express.

That was why Sheng Yun Express had to react as soon as possible and think of countermeasures.

Nie Yunsheng had already read the report. His expression was slightly grave. “This is completely within our expectations. Upwind Logistics has been incurring huge losses. It’s impossible for them to not want to do anything.”

“It’s reasonable for them to do cross-city logistics now.”

“With Tengda Corporation backing them, their goal must be to use these four cities as the center. Through the advantage of Upwind Courier stations, they would first open the market with high-quality services from the high-end people in the big cities and form a competitive competition with us.”

“I have to say that this business model is still a threat to us.”

“What’s more, we don’t have many methods. Upwind Courier stations are already very dense in these cities. The delivery experience is completely better than ours. This is made from real money. We are unlikely to adopt a similar model.”

“What do you all think?”

A vice-president said, “Should we work with other delivery companies to kill it in its infancy? Just like what we did with Chilu Delivery.”

Obviously, this was the simplest and most effective method.

Shengyun Express had done this before and had succeeded.

A year ago, an express delivery company called Chilu Delivery developed at a high speed. It targeted the lower-tier cities in the Midwestern region. It became a disruptor with a huge backer, especially since they had a good relationship with the e-commerce platform and priced themselves one to one and a half yuan cheaper than Shengyun Delivery.

Chilu Delivery took the lower-tier cities very seriously. It printed the slogan “Chilu Delivery will not do a half-a*sed job no matter how high the mountain is or how far the road is.” on the walls of thousands of towns. It also said that it was ready to incur losses for two years in a row. It came on aggressively.

Thus, Chilu Delivery released the notice ‘Notice on Prohibition of Taking on the Agency of Chilu Delivery on the Network’ and ‘A Penalty Announcement for Taking on the Agency of Chilu Delivery’. It requested the franchisees not to take on any agency for Chilu Delivery and fined the companies that violated the regulations.

Under such heavy pressure, Chilu Delivery soon collapsed because of its low profit margins and messy internal management. It lost the trust of the investors who left the scene quickly and was currently in a half-dead state.

Thus, the first reaction of Shengyun Express was to nip Upwind Logistics in the bud when faced with their threat.

However, another vice president immediately objected.

“That’s not good. Upwind Logistics is different from Chilu Delivery.”

“Chilu Delivery is our direct competitor. Upwind Logistics has been working closely with us previously. Upwind Courier stations have become the last mile of our distribution in Jingzhou, Beijing, Shanghai, and Guangzhou.

“We might have distributed some profits to Upwind Courier stations for each delivery, but we have saved a lot of manpower cost since we no longer have to deliver packages to their doorstep. The delivery efficiency and revenue have obviously increased.”

“If we were to nip Upwind Logistics in the bud completely, Upwind Logistics would not take on our deliveries. Once both sides fall out, it would be a huge loss to our daily business.”

“What’s more, Upwind Logistics’ cross-city delivery business has not been fully developed yet. Even if it develops, it will mainly be a high-end market for cross-city transport. There is a certain degree of difference in positioning with our business.”

“I think it’s inappropriate to take them out directly.”

Another higher-up agreed. “I think so too.”

“Another important point is that Upwind Logistics is different from Chilu Delivery. Their actual risk tolerance is completely different.”

“The rise of Chilu Delivery was because they received the favor of some big funds. However, their delivery business stagnated after we banned them. These big funds lost confidence in Chilu Delivery, so Chilu Delivery declined quickly.”

“However, Upwind Logistics is completely reliant on Tengda. It has been making losses for more than a year since it was established, but its stores are still open. This means that the upper echelons of Tengda Corporation value Upwind Courier stations very much.”

“They were incurring losses to begin with. They would only continue incurring losses if they were banned. On top of that, they would have the support of Tengda’s higher management. That would not hurt Upwind Logistics.”

“Instead, they would put all their energy into their own delivery business. It’s not worth it to fight us to the death with so many stores.”

“To put it simply, he who is down need fear no fall.”

“Using the banning method is not a wise move.”

Everyone was talking at once, and their opinions could not be unified.

That was because Upwind Logistics had been developing for such a long time. It was not an absolute competition with these traditional express delivery companies. Instead, it was a dual relationship between cooperation and competition.

Shengyun Express was used to throwing express deliveries to Upwind Courier stations and leaving immediately in many areas. Their efficiency of delivery increased by many times. Many online sites had already made adjustments to their personnel and removed some express deliveries that were not needed in order to save money.

If they were to ban Upwind Logistics, they would either deliver the hardware directly or find a large number of new delivery points.

The former was obviously unrealistic when there were not enough people, and the latter could not be completed in the short term.

Nie Yunsheng gently knocked on the table seeing that everyone was almost done with their discussions.

“Alright, let me say a few words.”

“Upwind Logistics has started their own delivery business. This is within our expectations. There’s nothing to be surprised about.”

“Of course, Upwind Logistics is a new model as a potential competitor. We have to be cautious.”

“However,we are obviously overreacting if we want to ban them immediately. We have to find an alternative to Upwind Courier stations before we can fall out with them even if we want to ban them.”

“It looks like we have been planning to solve the ‘last mile’ plan. We have to hurry and implement it.”

“Especially in the areas that Upwind Courier stations cover. We have to get rid of our dependence on Upwind Courier stations as soon as possible!”

Shengyun Express had obviously been thinking about how to solve the problem of the last mile as the biggest conglomerate.

No matter how he thought about it, there were only two solutions to the economy: either make delivery cabinets or a courier station in the form of a shop.

However, they could not be like Upwind Courier stations, where they could deliver to their doorstep. That was because the manpower cost would be too high.

It was not that he could not afford this cost, but he had to ensure profits.

There was no profit to be made, and they might even incur losses. Not only would the higher-ups of Shengyun Express not agree to it, but those big business partners would also try to oppose it and not cooperate fully.

In the end, he would not be able to force the Upwind Courier model as their plan.

On the other hand, the delivery cabinet and the courier station that did not deliver to the doorstep would definitely not be as experienced as Upwind Courier stations. However, Shengyun Express also had its own advantages: the delivery fee was cheap, and the stations covered more cities.

Since the delivery fees were cheap, it meant that many e-commerce companies would tacitly engage Shengyun Express in order to reduce costs. Many customers who were more sensitive to prices would also sacrifice some experience to choose Shengyun Express.

What’s more, the proposal for the delivery cabinet was profitable. If a large sum of money was spent, the progress would be very fast.

Once these two plans were done, Shengyun Express would be able to gradually shake off the reliance on Upwind Courier stations in certain cities. At that time, they would be more confident if they took measures according to the situation.

Most of the higher-ups present agreed with this viewpoint.

Nie Yunsheng finally decided. “Alright, let’s do that. Don’t alert Upwind Logistics first. Let’s work together normally.”

“At the same time, we have to invest in large batches of delivery cabinets across the country, especially in areas with higher coverage of Upwind Courier stations. We have to gradually build our own ‘last mile’ solution.”

“Of course, we can first set up some test points in the early stages. We can observe places with Upwind Courier stations and places without Upwind Courier stations. We can see how the customers react.”

“We have to take this matter seriously!”