Review: Logistics Companies’ “Overseas Operations”

Logistics companies must continue to ride the waves and overcome challenges if they are to successfully set sail for the future.

I don’t know when it started, “Going global” has become a buzzword, with companies across industries unanimously setting their sights on overseas markets and launching proactive expansion strategies—no exception for the logistics sector.

Driven by factors such as the rapid growth of e-commerce platforms and the steady increase in consumers’ purchasing power, the logistics industry has expanded rapidly, giving rise to a number of industry giants, including SF Express and JD Logistics. “Santong Yida” and others. As numerous logistics companies continue to strengthen their capabilities, consumers are enjoying more efficient, higher‑quality delivery services. Today, many logistics firms have expanded beyond the domestic market, setting their sights on overseas markets, where competition is steadily intensifying.

01     Going Global: A Race to the Top

Tracing back, we can see that logistics companies did not begin venturing overseas only in the past two years; rather, they have been exploring international markets for many years. For example, SF Express had already… As early as 2009, SF Express began systematically building its international business network; 2014 was even hailed as the inaugural year for Chinese express delivery companies expanding overseas, with numerous logistics firms—including Yunda, ZTO, and STO—accelerating their global outreach that year.

In recent years, expanding overseas has become a key strategic priority for logistics companies, with its importance steadily growing. This push to go global is far from unfounded. On the one hand, the domestic logistics landscape has largely stabilized, and venturing abroad can help companies identify new avenues for growth. Over the past few years, the industry has undergone several rounds of consolidation: while some players have faded from the scene, others have emerged as leaders, firmly establishing themselves at the forefront. The intensity of competition in the sector is evident, not least in the frequent price wars that have erupted.

To secure greater room for growth, logistics companies have begun expanding into overseas markets. Meanwhile, domestic brands and enterprises are vying to go global, generating a surge in cross-border logistics demand. Supported by favorable policies and the robust expansion of e‑commerce, cross‑border e‑commerce has entered a period of rapid development. According to the “…” report released by the NetEconomy Society E‑Commerce Research Center, According to the “2022 First-Half China Cross-Border E‑Commerce Market Data Report,” the size of China’s cross-border e‑commerce market reached RMB 7.1 trillion in the first half of 2022, with the full-year market size projected to hit RMB 15.7 trillion. Against this backdrop, an increasing number of domestic companies and brands are expanding overseas and ramping up their presence in international markets. As these domestic enterprises and brands steadily build their brand awareness abroad, substantial logistics demand is emerging—demand that Chinese logistics firms can meet by going global, thereby reaping the associated benefits.

In addition, as e‑commerce penetration continues to rise overseas, logistics demand has also increased. Influenced by the pandemic and other factors, overseas consumers’ shopping habits are gradually shifting, with a greater willingness to embrace online shopping than in the past. According to… According to Statista, driven by the pandemic, global e‑commerce sales surged 27.6% year over year in 2020, reaching US$4.28 trillion, and are projected to climb to US$6.39 trillion by 2024. As cross‑border e‑commerce continues to flourish, corresponding logistics demand is also growing, creating expanded opportunities for domestic logistics companies.

02     Layout: Steady and Solid

Whether it’s SF Express, JD Logistics, or… “Santong Yida” companies have all been vigorously expanding into overseas markets, deploying a variety of strategies to bolster their competitiveness on the global stage. Nevertheless, while each logistics player’s internationalization approach differs, there are also notable similarities.

1. Strong infrastructure The importance of timeliness in logistics is self-evident, and infrastructure development is the key to ensuring that timeliness. To provide users with better logistics services, logistics companies have been steadily investing in infrastructure. Take overseas warehouses as an example: they are a crucial component of cross-border e‑commerce infrastructure, not only reducing the costs of cross-border logistics but also improving its efficiency. Consequently, logistics firms have been vigorously expanding their overseas warehouse networks. “Leaving no stone unturned.” According to reports, SF International has established 15 overseas warehouses near ports in more than 20 countries and regions, including Germany, the United States, the United Kingdom, Thailand, Russia, Poland, and Estonia. As of June 30, 2022, JD Logistics was operating nearly 90 bonded warehouses, direct‑mail warehouses, and overseas warehouses worldwide, with a total managed area approaching 900,000 square meters, and its cross‑border network’s total warehousing space had grown by over 70% year over year.
2. Extension of width In addition to investing in logistics infrastructure, logistics companies are continuously expanding the geographic reach of their overseas operations to serve a broader base of international customers. For example, according to SF Express… According to its 2021 annual report, by the end of 2021, SF Express’s international express delivery service reached 84 countries and regions, while its cross-border e‑commerce parcel business covered 225 countries and regions. Meanwhile, JD Logistics is accelerating both its infrastructure development and the expansion of its trunk‑line network. It is reported that JD International Logistics has established a supply chain network spanning nearly a thousand international shipping routes, extending into more than 220 countries worldwide. Similarly, Yunda is actively broadening the geographic reach of its international operations, with its global footprint now encompassing 35 countries and regions—including the Americas, Europe, Southeast Asia, and Africa—and 251 cities.
3. Seek cooperation Although domestic logistics companies have made thorough preparations when expanding overseas, the significant differences between domestic and international markets inevitably give rise to… The issue of “not adapting to local conditions” remains a challenge. Consequently, many logistics companies are not only building their own operations but also pursuing partnerships to swiftly enter overseas markets and expand their international footprint. For instance, SF Express has established a joint venture with UPS—Global Express Holdings Co., Ltd.—focused on international express services; ZTO Express previously signed agreements with Turkish Airlines and Pacific Airlines to set up a joint venture, leveraging each partner’s strengths to develop global air‑freight capabilities; STO Express inked a strategic cooperation pact with Poland Post, with both parties planning to collaborate in cross‑border e‑commerce and other areas; and JD Logistics has also entered into a memorandum of understanding with the international logistics giant Agility, under which the two will capitalize on their respective advantages to actively pursue cooperation in overseas cross‑border e‑commerce and the development of international logistics infrastructure.

03     Overseas cakes are hard to cut.

Domestic logistics companies are expanding into overseas markets and ramping up their international operations by strengthening logistics infrastructure and partnering with local logistics firms or cross-border e-commerce platforms, with their global expansion efforts gradually yielding results. For instance, according to a report released by SF Express… According to the September express delivery and logistics business report, SF Express’s supply chain and international operations generated revenue of RMB 7.433 billion in September, up 320.42% year over year. However, it is undeniable that while the overseas market is sizable, it is far from easy to capture.

First, there are numerous differences between domestic and international market environments, and the operational experience that logistics companies have gained in China may not necessarily be applicable to overseas markets. Due to differences in culture, values, and lifestyle, overseas consumers have distinct priorities and needs. Consequently, the successful strategies that logistics companies employ in their domestic markets may not necessarily translate effectively to international markets. Against this backdrop, logistics firms expanding abroad would do well to start from the local context and, based on consumer demand, establish a tailored logistics network. 。

Secondly, A significant number of logistics companies have ventured overseas, yet domestic players still face competition from other market participants. Despite the vast potential of overseas markets, they also present significant challenges. As domestic logistics companies expand internationally, they will inevitably face competitive pressures from rivals—such as the four major global express delivery giants. UPS, FedEx, TNT, and DHL; other domestic logistics companies expanding overseas; local express carriers in foreign markets; and e‑commerce platforms that operate their own logistics networks. The strength of each of these competitors should not be underestimated, making the competitive pressures faced by Chinese logistics firms venturing abroad readily apparent.

Third, for logistics companies seeking to expand overseas, localized operations pose a significant challenge. As mentioned earlier, there are significant differences between domestic and international markets, which means that it is far from easy for Chinese logistics companies to achieve localized operations. For instance, in many overseas countries, vast territories with sparse populations make last-mile delivery particularly challenging. Moreover, expanding into foreign markets inevitably requires hiring expatriate employees, and managing these non‑Chinese staff while fostering team cohesion presents its own set of challenges. Consequently, for Chinese logistics firms, localizing operations remains a formidable hurdle. “Bone.”

04     Aim Southeast Asia

In recent years, logistics companies have been increasingly expanding overseas, with the Southeast Asian market emerging as a key focus for them. “A hot commodity.” For instance, in the second half of 2019, Best Inc. implemented a strategic realignment, elevating international expansion to one of its five core strategies and making Southeast Asia its strategic priority. Meanwhile, SF Express launched the “War Wolf Plan” targeting Southeast Asia, aiming to comprehensively enhance the sales team’s operational capabilities and swiftly achieve its business objectives. So what exactly is driving logistics companies to focus on the Southeast Asian market and steadily ramp up their investments there?

On the one hand, e‑commerce in Southeast Asia is experiencing rapid growth, generating substantial latent demand for logistics services. According to Google’s Southeast Asia E‑Commerce Report indicates that the region’s e‑commerce market is expected to grow at an annual rate of 30% over the next decade. Meanwhile, according to a report on Singapore’s Lianhe Zaobao website, a survey forecasts that Southeast Asia’s e‑commerce sales will expand by 18% this year, reaching US$38.2 billion. By 2026, the region’s e‑commerce revenue could climb further to US$57.8 billion. As e‑commerce and logistics are closely intertwined, the growth of e‑commerce will drive a substantial increase in logistics demand. Data show that Southeast Asia’s e‑commerce sector is currently undergoing rapid expansion, signaling significant latent logistics needs—no surprise, then, that domestic logistics companies are aggressively expanding into this market.

On the other hand, Southeast Asia currently remains at a stage where its logistics infrastructure is relatively underdeveloped and its logistics market is still largely untapped, leaving considerable room for growth. Despite the immense potential of the Southeast Asian market, its logistics sector currently faces several challenges, such as inadequate infrastructure and heavy reliance on manual labor. In contrast, domestic Chinese logistics companies boast substantial technological expertise and a track record of success. By adapting their strategies to local conditions and drawing on their proven domestic experience, these companies can accelerate the development of localized logistics networks in Southeast Asia, thereby smoothly expanding their overseas operations. At present, the Southeast Asian market has become a key destination for Chinese logistics firms. “A must‑win battleground,” yet for these companies to carve out a foothold in the Southeast Asian market is no easy feat. After all, the region’s logistics sector remains highly fragmented, and cultural differences across nations pose significant challenges—obstacles that logistics firms must continue to overcome through persistent effort and innovation.

In short, going global is no easy feat; logistics companies must keep forging ahead against the odds if they hope to set sail for success.