J&T Global Express, a prominent player in the Asian logistics sector, has declared a landmark annual profit within the Chinese market following significant growth efforts in the previous year, achieving this milestone despite a vigorous pricing battle within the industry, as revealed in its latest financial disclosure post its Hong Kong stock market debut last October.
For the past year in China, the logistics firm posted a notable gross profit of US$58.8 million and an adjusted EBITA (earnings before interest, taxes, and amortisation) of US$30.7 million—its first venture into profitability in the region since its market entry four years prior, per the financial statement issued on Friday.
J&T’s newfound financial success occurs in the context of a highly competitive Chinese express delivery landscape. Renowned local delivery powerhouses—such as SF Express, STO Express, and YTO Express—have been embroiled in a fierce pricing clash, a situation exacerbated by a post-pandemic e-commerce slowdown. This fierce competition follows on the heels of a similarly intense pricing dispute that rocked the industry in 2021. The State Post Bureau reported a 4.3 per cent dip in the average revenue per package, down to 9.1 yuan last year.
Nevertheless, J&T maintained a consistent revenue stream per package throughout 2023, successfully reducing the cost of deliveries per package to US$0.34, down from US$0.40 the year before. The company credits its performance improvement to “an array of strategic undertakings, which include acquisitions, diversification of service offerings, and operational efficiency enhancements,” as noted in the report.
Originating in Jakarta, Indonesia in August 2015 by a duo of ex-executives from the Chinese tech company Oppo, J&T has primarily pivoted its business operations to Shanghai. The company seized the Chinese market in 2020, spurred by robust demand from online shopping platforms, notably the value-oriented e-commerce titan Pinduoduo. This market segment now represents a significant portion of J&T’s revenue, with sales in China surging by 27.7 per cent to a substantial US$5.2 billion in 2023, making up 59.1 per cent of its overall revenue. This figure marks an increase from 45 per cent in 2021 to 56 per cent in 2022, as stated in company reports.
In China, the logistics provider experienced a 27.6 per cent spike in parcel volume to 15.3 billion last year, capturing an 11.6 per cent slice of the market and ranking as the sixth-largest express delivery service in the nation.
During its Hong Kong IPO in October, J&T accumulated HK$3.5 billion, securing its position as the second-largest IPO in the city for that year. Amid improving operations in China, J&T’s international business continues to navigate challenging conditions.
The group as a whole disclosed a net loss of US$1.2 billion, a downturn attributed to escalating share-based compensation and operational expenditures, despite reporting a net profit of US$1.6 billion in 2022. Overall, the company enjoyed a 22 per cent increase in total revenue, reaching US$8.8 billion last year.
In Southeast Asia, J&T, renowned for its economical logistics solutions, ranked as the leading express delivery provider last year, commanding a 22.5 per cent market share by parcel volume, as per Frost & Sullivan’s findings.
