Asian Courier Giants SF, J&T to Target European, US Markets, ATM Capital Founder Says

(Yicai) Jan. 19 -- Chinese express delivery giant SF Holding and its Indonesian partner J&T Global Express are actively evaluating opportunities in the European and US markets, according to the founder of ATM Capital and investor in J&T.“The European express delivery market, driven by the growing e-commerce industry, remains largely untapped,” Qu Tian told Yicai in an exclusive interview. The US market also presents notable opportunities, as apart from Amazon’s in-house logistics network, most other couriers in the United States primarily focus on commercial deliveries, offering limited express services at high prices, he added.In the US, there is a lack of independent third-party delivery firms dedicated to serving e-commerce platforms, with only a handful of small-scale players providing similar services, Qu pointed out.SF and J&T can challenge local logistics giants in Europe and the US, such as UPS, Qu believes. “UPS’ core businesses lie in domestic delivery within the US and cross-border services from overseas to the US, but it has barely any local delivery networks in other regions,” he noted. “Therefore, J&T and SF can deepen their presence in this market segment, and they may even surpass UPS in the future.”When it comes to the opportunities for Chinese logistics companies to expand overseas, Qu said that they lead the world in both technological applications and management models. Even in markets with high labor costs, such as Europe and the US, there is significant room to reduce costs and enhance competitiveness through economies of scale and automation.One of the key advantages of Chinese companies lies in their technological prowess, including innovation capabilities, automated sorting technology, and big data analytics, Zhao Xiaomin, a logistics industry expert, told Yicai.In the era of artificial intelligence, Chinese logistics firms outperform their international peers in terms of data solution capabilities, Zhao noted, adding that they can further strengthen synergy with e-commerce platforms, such as Temu, Shein, and Shopee.However, they also face distinct challenges in overseas expansion, according to Zhao. On one hand, they need to pay close attention to local laws and regulations, cultural norms, labor protection policies, and data security issues. On the other hand, they should avoid simply replicating the cut-throat competition model prevalent in China.On Jan. 14, SF and J&T unveiled a HKD8.3 billion (USD1 billion) equity partnership agreement under which the former will purchase 822 million newly issued Class B shares of J&T at a price of HKD10.10 (USD1.30) apiece for a 10 percent stake, and the latter will buy 226 million newly issued Hong Kong shares of SF at HKD36.74 (USD4.71) apiece for a 4.3 percent stake.SF and J&T have maintained a solid long-term relationship, being close business collaborators, Qu told Yicai. They boast complementary capabilities, particularly in overseas business. SF focuses on cross-border logistics and has a fleet of over 100 aircraft. Meanwhile, J&T Express has established end-to-end delivery networks and localized operational advantages across 13 countries.The future synergy model between the two logistics giants is envisioned as SF taking charge of cross-border services, and J&T Express handling local last-mile delivery, according to Qu.Editor: Futura Costaglione