Fast and Furious – How SF Express creates business opportunities using digital technology
How SF Express, the leading courier express service provider in China, creates business opportunities using digital technology
Fast and Furious –
How SF Express creates business opportunities using digital technology
745 words
As e-commerce has been developing rapidly in China over the past 10 years, courier express industry has also experienced a booming growth, especially transforming from B2B to B2C e-commerce business. SF Express is the leading courier express service provider in China. As of December 31, 2015, with about 15,000 operating vehicles and 300,000 express delivery workers, SF Express has extended its services to all over Mainland of China through its about 13,000 service points. Meanwhile, SF has been aggressively expanding its worldwide express services, covering US, Japan, South Korea, Singapore, Malaysia, Thailand, Vietnam, Australia, and Mongolia.
So, how does SF Express leverage digital technology to improve their service, and seize new growth opportunities?
SF Express launched its own mobile app providing extraordinary service experience for B2C individual customers, and also creating new business opportunities in value-added services
- Customers could submit their courier order, choose pickup time, create a unique QR code for a specific order and do mobile payment directly by using SF app. This one-stop service makes it much easier than the old “call hotline to arrange pickup” for individual consumers to place orders.
- In order to close the loop of this one-stop mobile service model, SF Express even tapped into Fin-tech area and developed their own mobile payment tool, Shunshou Pay. Learning from Tencent and Alibaba’s best practice, SF express sees mobile payment a fast growing opportunity, not only in B2C business, but more on B2B side, esp. SMEs, where SF Express has deep relationship and strong leverage to promote its own payment tool, while bringing real convenience and better service for SME customers
- Using the mobile app, SF Express is able to build up a sophisticated database tracking orders and contents of each package (SF Express is legally allowed to track categories of merchandises in each package for safety reason). Thus, SF Express launched its own loyalty program. By analyzing a consumer’s whole e-commerce consumption, while Taobao / JD only has transaction data on their own platform, SF Express creates a competitive edge in big data sculpture of individual consumers, which is extremely valuable to e-commerce players.
Besides technology application in B2C side, SF Express also launched “Data Beacon Project” in May 2016, providing big data services for B2B customers.
- SF Express leverages its sophisticated data sources, including consumer order data using SF service across all e-commerce platforms and local community data, collected and updated daily by their 300,000 express delivery workers and over 23,500 offline store owned by SF Express, as a strong foundation of big data analysis.
- Using above data sources, SF Express provides data analysis service and business insights from analyzing consumer behavior, local community commercial ecological environment, and supply chain management pattern in various industries. E-commerce players, SME suppliers and local business owners can all benefit from this service.
SF Express is the pioneer of integrating advanced technology in China logistics courier industry. But from my perspective, I think SF Express could do better in below two aspects in the future:
- SF Express could use more real-time mobile technologies to enhance customer service experience through mobile app. SF Express could learn from UPS’ best practice to track the location of each delivery worker by installing GPS tracking chip in their portable receipt printer, and provide real-time location track service for customers to really know the exact location of their package, build up direct communication between customers and delivery workers and thus provide better customized services.
- As to the B2B side, SF Express could do better in enlarging its data sources by cooperation with e-commerce platforms and even other logistics courier service providers. Up to now, SF Express only has access to the data of the e-commerce orders using SF Express delivery service. If cooperation with e-commerce platforms and other logistics courier service providers goes real, the data source would be significantly enlarged and enriched, and thus could generate more sophisticated analysis of consumer behaviors and industry insights.
Fast speed used to be the only standard when we evaluate a logistics courier service provider. But now, better customer experience, more value-added services, and deep data analysis and industry insights are the new standard built up by SF Express in this technology-driven era. SF Express not only uses technology to improve their service, but also seizes promising new growth opportunities along the value chain. That is the priceless value that technology brings to our real and daily life.
Source:
- SF Express corporate website
- BCG analysis of SF Express
- “SF Express is essentially an IT company”from Sina News
- “SF Express launched Data Beacon Project” from Sohu News
Allenmind – thank you for sharing this article. As someone who grew up in China, I’m very glad to hear that technology has been used to transform the quality of life there. It definitely seems like SF Express has been doing great working – using data driven analysis to provide better customer service and competing head-on-head with big players like Tencent and Alipay in the payment system space. My question is, since a lot of consumers in China are also heavy users of Tencent and Alipay, wouldn’t it be easy for these bigger players to utilize consumer data to cater to their customers. How replicable is SF Express’ business model and what is it’s competitive advantage? What other types of competitive threats do you see and what’s your assessment of SF Express’ business model resilience against these threats?