In the second half of the online freight‑transport platform era, the industry’s future will hinge on competing through refined operations.

A financing announcement has once again sounded the starting gun for a fierce battle in the same-city freight market. Recently, the same-city freight platform Kuagou Dache announced that it has closed a new round of funding totaling nearly US$100 million, co-led by BOC International and the Cyberport Investment & Entrepreneurship Fund (CMF). Given that this round of fundraising comes against the backdrop of Manbang Group—the “first digital freight stock”—being delisted, the strategic rationale behind Kuagou’s move is self‑evident.

From an industry‑wide perspective, Kuagou Dache and Huolala have long been the dominant players in the same‑city freight sector, locked in a fiercely competitive standoff. However, with the entry of Manbang, a major cross‑city trunk‑line player, and Didi Freight’s rapid foray into the market, the duopoly that once defined the segment has been reshaped. Now, with Didi and Manbang—both early movers to go public—having been delisted, the still‑unlisted Kuagou‑type platforms have clearly seized new opportunities for expansion.

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The duopoly in the freight industry is under pressure.

With the rise of the previous O2O wave, internet entrepreneurs, having witnessed Didi’s meteoric ascent in the ride-hailing market, turned their attention to the vast freight‑transport sector. Subsequently, more than 300 companies—including Huolala, 58 Express (the predecessor of Kuagou Dache), Supaidi, and Lanxiu—entered the fray, sparking what came to be known as the “Hundred‑Group Battle” of “Internet Plus Freight.”

After fierce competition, by 2018 the urban freight‑delivery market was left with just two major players: Huolala and Kuagou Dache (formerly 58 Suyun), which had merged with a Hong Kong‑based freight company. With both firms backed by powerful parent companies, their rivalry remained evenly matched, leading to a brief period of calm in the urban freight‑delivery sector after 2018.

However, a sudden pandemic in 2020 reignited the urban freight‑delivery market. In June 2020, Didi entered the space with its Didi Freight service and, within the following six months, closed a $1.5 billion Series A round. The newly launched Didi Freight continued Didi’s rapid expansion strategy, achieving over 100,000 daily orders just three months after launch. With Didi charging ahead, cross‑city trunk‑line freight giant Manbang was equally aggressive. That same year, Manbang rolled out its own urban‑delivery platform and subsequently raised $1.7 billion, making its bold push unmistakable.

With the entry of Didi Freight and Manbang, the freight‑transport market has evolved from a duopoly to a four‑player oligopoly. From Didi’s perspective, the platform‑based nature of the freight market offers substantial room for efficiency gains, and its extensive experience in matching drivers with vehicles gives it a decisive edge—its foray into this space amounts to a game‑changing blow to incumbent players. Meanwhile, Manbang Group, which already commands over 90% of the intercity freight market, can leverage its strengths in both short‑haul and long‑haul logistics upon entering the urban‑delivery segment, further cementing its dominant position in the industry.

However, Didi and Manbang are far from the only players eyeing this market; SF Express, long known for its low profile, is also among the contenders. According to information disclosed by SF Express, its intra-city freight brand, “Shunlu,” has registered over 710,000 drivers, with nearly 200,000 active daily users, and its influence continues to grow.

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Why accelerate fundraising?

As industry competition intensifies, major players are accelerating their pace of fundraising and IPOs. Even before Manbang Group went public, rumors had circulated about the overseas versions of Huolala and Kuagou seeking listings; however, for various reasons, Manbang beat them to it. Now, Kuagou naturally needs to begin planning a new round of financing.

First, companies in the same-city freight sector that have not yet gone public will be forced to revise their listing plans due to regulatory changes. According to recent regulations issued by relevant national authorities, any internet company seeking an overseas listing with over one million registered users must undergo a security review by the pertinent state agencies. During this review period, platforms are required to suspend new user registrations and all investment‑financing activities. This means that both Huolala and Kuagou will need to pass this hurdle if they wish to pursue an IPO.

Under these circumstances, unlisted freight‑transport companies may be forced to revise their IPO plans, opting instead to list on the Hong Kong stock exchange or postponing their public offerings while seeking alternative financing. For now, Huolala appears to be leaning toward the former, whereas Kuagou has chosen the latter. According to recent disclosures, Huolala’s senior management is assessing the feasibility of a Hong Kong listing, though a U.S. IPO remains a possibility. Meanwhile, Kuagou is stepping up its fundraising efforts to build up reserves and prepare for external challenges.

As for why platforms are racing to go public, it may well be tied to the industry’s current cash‑burning business model. The urban freight‑transport market has inherently low gross margins; even Manbang, which started as a platform and now holds an undisputed market position, currently boasts a gross margin of just 49%. Meanwhile, Huolala and Kuagou, both still in a phase of heavy investment, naturally struggle to match that level.

Secondly, capturing market share also requires new investments. To vie for market share, major platforms are currently engaging in all‑out subsidy wars, the outcome of which is a further widening of losses. To maintain or even expand their market advantage, these industry giants will have no choice but to secure additional financing to fuel growth. Reportedly, a significant portion of Kuagou’s latest funding round will be allocated to ramping up resource investment in key regions, as well as to business expansion and product innovation.

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Digital freight is accelerating its evolution.

In fact, across the industry, the leading players that have emerged from the intra-city freight sector in recent years are driving their platforms to evolve in new directions on multiple fronts.

From a financing perspective, over the past year, industry players such as Manbang, Fuyou Truck, Huolala, and the newly entered Didi Freight have all secured funding. Notably, both Manbang and Huolala raised funds in the tens of billions range. By sheer volume, the total financing in the digital freight sector has already surpassed the combined total of the previous five years.

Clearly, even the industry leaders that have emerged from the “mass grave” of truck‑freight matching still face a landscape fraught with uncertainty. As such, for many companies, going public is merely a milestone. Moreover, as numerous top-tier firms increasingly turn to the capital markets, the real test of their future growth drivers, expansion potential, and profitability has only just begun. These leading players are now pushing the boundaries of their business models, blurring the once‑clear distinctions between market segments and intensifying direct competition.

First, the boundaries between intra-city and inter-city freight are becoming increasingly blurred. From Huolala, a leading intra-city freight player, launching long-haul trucking services, to Manbang, an inter-city trunk‑line freight giant, entering the intra-city freight market, all signs point to the former niche leaders now evolving from specialized freight platforms into comprehensive digital freight platforms.

Secondly, the shift is from ad hoc to planned operations. At present, digital freight platforms tend to focus on spot‑load full‑truckload (FTL) services, whereas scheduled FTL accounts for 70% of the overall FTL market, leaving far greater room for growth. This dynamic is prompting major platforms to accelerate their entry into the scheduled FTL segment. For instance, Manbang Group has acquired Zhihongda Fleet to explore in‑house fleet management; Fuyou Truck has eliminated its information‑technology division and taken direct control of its own fleet; meanwhile, Kuagou and Huolala are extensively piloting B2B models across community group buying, restaurant chains, and supermarkets.

Finally, the focus has shifted from scaling order volumes to building ecosystems. Previously, digital freight‑transport platforms digitized the logistics process by connecting shippers and drivers, significantly boosting the utilization efficiency of freight‑related assets—namely, trucks. Today, as the number of such platforms grows, each is constructing ecosystem‑wide barriers around the full lifecycle management of vehicles. For instance, freight‑transport platforms are integrating with gas stations, authorized dealerships, and financial‑payment services, thereby strengthening their control over truck fleets and expanding into increasingly innovative truck‑service markets.

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Precision operations may become the cornerstone of the future.

As more and more platforms enter the market, freight‑matching platforms can no longer gain a competitive edge by relying solely on single‑mode vehicle‑cargo matching. Meanwhile, the price wars that once underpinned these platforms are now hitting new bottlenecks, amid complex negotiations among drivers, shippers, and regulators. Under these circumstances, refined, data‑driven operations have become an industry-wide consensus.

From the driver’s perspective, changes on the supply side have compelled platforms to overhaul their operational rules. In the past, the freight‑transport platform sector’s unregulated, “brute‑force” growth—characterized by opaque pricing and meager profits—has significantly undermined truck drivers’ motivation to stay in the industry. Meanwhile, as the middle‑aged generation of truck drivers born in the 1960s and 1970s retires, the high‑risk, grueling trucking profession is now facing a critical talent gap.

According to data from the Ministry of Transport, over the past three years, the number of freight truck drivers in China has declined from 21 million in 2018 to fewer than 18 million in 2020. This rapid drop in driver numbers is making the remaining transport capacity in the freight industry increasingly scarce. For platforms, striking a balance between attracting capacity and generating profits requires refined, data-driven operations.

From the shipper’s perspective, in addition to demanding transparent freight rates, shippers also expect a higher‑quality experience with the freight‑transport services themselves. Currently, many platforms engage in aggressive subsidy wars to attract users, resulting in substantial platform subsidies but poor user retention. Moreover, these heavy subsidies squeeze drivers’ margins, degrading the quality of driver‑side service and leading to negative reviews in the online freight‑transport sector. This, in turn, deters shippers from using the platform, creating a vicious cycle. Therefore, for shippers, beyond clear pricing, it is essential that platforms offer specialized, high‑value services tailored to their needs.

Finally, from the regulators’ perspective, issues such as truck drivers’ “fatigue‑driven driving” and subsidy wars have, to varying degrees, disrupted existing industry competition. With regulators repeatedly stepping in to hold talks and issue warnings, platforms may be compelled to abandon their previous reliance on aggressive marketing and instead focus on strengthening operations to boost profitability. Overall, the trend toward more refined and data‑driven operations will inevitably shape the future of freight‑transportation platforms.