By BAI Fan
Rumors regarding a possible acquisition of Yunda Express by Douyin (the Chinese version of Tiktok) have their basis in Yunda's recent poor performance.
Once the second-largest delivery company in China, Yunda is on the slide in the domestic market. During the first half of 2023, Yunda's revenue decreased by 3 percent year-on-year, in stark contrast to its competitors YTO and Shentong, which saw increases of 14.7 percent and 24.7 percent respectively.
Yunda's failure to cooperate profitably from its links to Alibaba was a significant factor behind the decline. At one time, Alibaba acquired stakes in several express companies. Cainiao, the logistics arm of Alibaba, holds a 25 percent share of Shentong, and Alibaba itself possesses owns a 20 percent share in YTO.
Yunda's connection to Alibaba is limited to a mere 2 percent share. Consequently, more of Alibaba's resources are directed toward the former two companies.
Adding to Yunda's woes is unrest among franchise outlets, with some protesting and others going on strike. This isn't the first time Yunda has faced such trouble and has failed to take effective measures.
Douyin already has connections with major express service providers, including SF Express. With over 30 billion products sold on Douyin in 2022, an exclusive delivery system might make sense, and swallowing Yunda might be the quickest way to go about it.
Recent ties between Douyin and Yunda have grown stronger. After being the primary carrier of Douyin's packages during the Singles Day (November 11) shopping festival in 2022, Yunda listed Douyin as a premium client, giving priority to their packages.
However, the situation is far from straightforward. For Douyin, relying solely on one express company could compromise quality and annoy sellers. On Yunda's side, becoming Douyin's postboy isn't a very appealing prospect either.
Moreover, selling the company now could result in difficult negotiations due to Yunda's recent poor performance. But that's what caught Douyin's attention in the first place.
