Suning Buys 70% of Courier Tian Tian Express
(Beijing) — Electronics retailer Suning Commerce Group Co. Ltd. has bought 70% of private courier Tian Tian Express, aiming to ramp up its last-kilometer and small-item delivery capacities to better compete with e-commerce giants like JD.com.
The leading seller of home appliances and electronics paid 2.97 billion yuan ($427.6 million) for its stake in Tian Tian, whose service uses the name TTK Express. Suning said it will buy the remaining 30% for 1.275 billion yuan within the next 12 months, according to a stock filing on Tuesday.
Suning said the purchase will enhance its last-kilometer delivery services, which are struggling to keep up with growing online orders from its e-commerce business. Suning Commerce Group Co. Ltd. has built up a national network of warehouses and delivery services for its core home-appliance business, but lacks similar capabilities for delivering smaller parcels, which are often purchased online.
“We will incorporate Tian Tian’s warehouses and delivery branches in a short amount of time, boosting our flexibility and efficiency,” Suning said in a statement.
Analysts say the purchase will give the brick-and-mortar appliance retailer more of an edge as it tries to compete in e-commerce with companies like JD.com, which has more-efficient delivery services.
“Suning still heavily relies on its trucks from the offline era to deliver refrigerators and electric heaters to consumers,” said Yao Jiangfang of the China E-commerce Association. “But as Suning begins to expand into a full-fledged e-commerce site, with smaller items like apparel, books and food, it needs to invest more into small-parcel delivery services.”
Tian Tian is a relatively new but promising player in China’s flourishing private delivery service sector, with revenues growing at nearly 60% in the past two years. By comparison, the largest players like publicly traded Yunda Express and ZTO are edging forward with 30% revenue growth.
Despite its great potential, Tian Tian is still a minor presence, handling less than 4% of the packages in China. Yao said selling itself is the best strategy for smaller players like Tian Tian, which might not attract much investor interest with public listings. “Smaller brands are being gobbled up by larger delivery firms in the industry reshuffle. Tian Tian needs a strong patron to count on,” said Yao.
Suning has joined e-commerce behemoth Alibaba in an alliance against their rival JD.com by setting up a joint venture in October. That came after Alibaba spent 28.3 billion yuan in 2015 to buy 20% of Suning’s shares.
Contact reporter April Ma (firstname.lastname@example.org)
Nov 20 18:00
Nov 20 16:01
Nov 20 16:20
Nov 20 13:00
Nov 20 13:37
Nov 20 13:54
Nov 20 11:25
Nov 20 10:25
Nov 20 02:09
Nov 20 02:45
Nov 19 17:23
Nov 19 16:25
- 1In Depth: Southeast Asia Becomes Region’s Next Tech Battleground
- 2U.S. to Extend Huawei Reprieve by Allowing It to Continue Trade With U.S. Clients: Report
- 3Beijing Plague Patients Were Medical Transfers, Further Cases in Capital Unlikely: Officials
- 4Quantum Computing, CRISPR, Drones, Are Put on Chinese Kids’ Reading List
- 5In Depth: The Rise and Fall of Asian Twin Cities
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas