Dialogue with Zongteng Group's Li Cong: Cross-border logistics opens a new efficiency battle, who will win?

【Ebrun Original】As the dividends of the cross-border e-commerce industry return to normal, seeking growth paths cannot avoid focusing on customer experience. Logistics, as a key infrastructure, is the link that most determines the level of development in all aspects related to the customer experience.

Whether it is the steadily developing Amazon or the rapidly rising "Four Little Giants" (Temu, SHEIN, TikTok, AliExpress), all are vigorously strengthening their own logistics capabilities to achieve the goals of cost reduction, speed enhancement, and improved customer experience. At the same time, third-party logistics service providers are undergoing a transition from quantity to quality, and cross-border e-commerce sellers are shifting from logistics transportation thinking to supply chain management thinking.

Moreover, in March of this year, the implementation of Amazon's new FBA policy was like a catalyst, driving third-party logistics service providers and sellers to invest more and refine their resources in the "race", which points to an Amazon having completed the regional network upgrade in the U.S. market, which will drive the growth of "same-day delivery" and "next-day delivery" services across the entire industry.

"Amazon's focus on speed will also bring competitive pressure to other retailers. Almost all platforms will join the 'arms race' of supply and delivery efficiency brought about by infrastructure reformation. The previous simple price competition mechanism between platforms (sellers) and logistics service providers will be balanced by long-term contractual cooperation relationships," commented Li Cong.

Encouraging service providers to cooperate in the construction of basic network facilities and provide more competitive service items is undoubtedly an important direction for this competition. However, as Ebrun has always practiced the concept: in cross-border logistics, the current investment not only meets current needs, but also lays the foundation for future advantages. In other words, in this long-cycle industry, your current competitiveness is likely to be more derived from the layout and continuous investment a few years ago—this is the time barrier.

In this regard, the advantages brought by Ebrun's "early layout" and "courageous investment" are highlighted. For example, as early as 2015, Ebrun saw the prospects of overseas warehouses and established the GuCang overseas warehouse; in 2018, it acquired the cross-border special line logistics company Yuntu Logistics, integrating the two mainstream transportation methods of cross-border e-commerce (overseas warehouse and special line) and embarking on the exploration path of a comprehensive cross-border e-commerce logistics enterprise; and in 2023, it pioneered the era from cross-border e-commerce special lines to cross-border e-commerce express delivery through the use of two own aircraft.

During the development process, Ebrun has received multiple rounds of financing, with a total amount of over tens of billions, and investors include well-known domestic and foreign venture capital institutions and industrial capital such as Prosus, Hillhouse Capital, ByteDance, Hillhouse Capital, Temasek, and more. In the "2022 China Cross-border E-commerce Logistics Top 50 List" released by Yuntu Insights, Ebrun's revenue ranked first.

Now, as the cross-border e-commerce industry enters a new growth cycle, how to re-examine this vast and complex ecosystem from the perspective of logistics supply chain? How will platforms, service providers, and sellers within it construct new moats? Starting from this, Ebrun Power and Li Cong, Vice President of Ebrun Group, engaged in an in-depth dialogue, discussing topics such as the upgrade of the cross-border e-commerce supply chain network, the balance between seller costs and efficiency, survival challenges of third-party service providers, trends in overseas warehouses, the impact of the "full-service" model, the potential of large item logistics, and domestic express delivery going overseas.

01

A supply chain elimination brought about by the new Amazon FBA policy

Ebrun: The fee policy for warehouse division implemented by Amazon FBA since March indicates that the Amazon regional delivery system has officially begun. What impact will this have on third-party logistics service providers and sellers?

Li Cong: First, it should be noted that, at this point, Amazon's fulfillment network has officially initiated a new upgrade. The U.S. market has been divided into 8 delivery networks, with regionally independent inventory, greatly improving delivery timeliness, and a larger proportion of orders will be able to achieve 2-day delivery, and same-day delivery, and the final delivery costs will be reduced. Of course, the premise is that sellers must share more of this network's inventory and transfer costs, and service providers must increase infrastructure investment to coordinate overall network operations.

FBA first leg service providers: Goods originally injected from the Western U.S. will be divided into smaller units and sent to more warehouse nodes in the 8 major regions, and the accuracy of inventory entry requirements will be further increased; Chinese shipment and post-arrival operation costs, land transportation costs, and coordination costs will increase significantly, but FBA will counterbalance the overall cost increase and the efficiency of the regional network and the decrease in final delivery costs.

The better way to enter the warehouse in the future is for FBA first leg service providers to have intermediate warehouses in 8 major regions, able to achieve inter-regional centralized transportation, and provide incremental transit services to improve inventory entry accuracy within each region. However, this requires first leg service providers to invest more in management costs, or sellers need to consider shipping goods to the U.S. by sea to different regions such as the East, South, and West.

Third-party overseas warehouses: Although the demand for overflow FBM (Fulfillment by Merchan) from Amazon is growing, most third-party overseas warehouses are only distributed in two regions and a few in 3-4 regions, which will further widen the time difference compared to FBA. Third-party overseas warehouse service providers theoretically need to set up a more dispersed warehouse group in regions that correspond to the 8 major regions of Amazon. Calculated at an average of 200,000 square meters per zone, this means it requires expanding 1.6 million square meters of warehouses for 8 regions, and 1.2 million square meters for 6 regions, even this is difficult for any Chinese overseas warehouse service provider to achieve in the short term.

Besides, since third-party overseas warehouses are not first-party logistics, they cannot forcibly demand customer warehousing division, so there is no significant market demand for large-scale zoning and construction. It can only be built at an opportune time. But a significant trend for future overseas warehouses is the increased investment and management thresholds.

Furthermore, as the requirements increase, the market demand for end-to-end integrated supply chain services will increase. Sellers may hope that third-party overseas warehouses can handle integrated supply chain services from gathering in China to sorting and keeping goods in overseas warehouses, and replenishing goods to FBA at any time.

Sellers: The overall requirement is that the higher the single-item stock volume, the more favorable. In terms of inventory turnover management, inventory entry accuracy, and safety stock guarantees, there needs to be more professional supply chain management.

Larger sellers with more stock can deploy inventory in various regions to obtain better delivery timeliness, thereby gaining the support of traffic and costs, while the final delivery costs will decrease. Conditional sellers and brand merchants may consider establishing a domestic echelon stock inventory in the United States, establishing a transfer main warehouse to ensure inventory entry accuracy.

Smaller sellers need to focus on larger-selling SKUs and categories, not to be burdened by the lowest order quantity of the factory, and to have a certain amount of storage in various regions. And it is imperative for retailers to reduce the number of SKUs.

This year's policy is free warehouse division configuration for 4 warehouses, but this is just the beginning. Will it be 6 warehouses free next year? If you look at Amazon's original intention, this is almost inevitable. Therefore, this year marks the beginning of the Amazon regional delivery, not the end, and sellers need to accelerate to avoid becoming passive in the next phase. If you do not exceed the FBA evolution speed, you will be eliminated by FBA.

Moreover, FBA has put forward punitive measures against goods that go below the minimum inventory, that is to have safety stock. It also requires fast turnover. This will inevitably require sellers to be stronger, doing business with more competitive SKUs, which is the same as what is currently being done by major U.S. retailers.

Ebrun: Like the "butterfly effect," a change in the FBA charge policy has such a huge impact behind it. How to understand it from the bottom logic?

Li Cong: This is a long-term established strategy for Amazon. As early as 2016, Amazon initiated a project called "Amazon Supply Chain Optimization Technology Organization (SCOT)" where a mathematical model developed by the platform is working behind every order. One of the main characteristics of this model is the warehouse capacity restriction—setting a relative ceiling on space to drive efficiency improvement for the operation of FBA.

After understanding this principle, it's evident that the increasingly stringent warehouse capacity policy of FBA towards sellers, and various advanced technology investments and actions, can be seen. In the past few years, the project has also made significant breakthroughs, such as in 2023, Amazon's FBA area has virtually not changed, but its sales have achieved double-digit growth. With the cost burden minimized, sellers have achieved "fast turnover" under the FBA constraints to save at least several million square meters of warehouse space.At first glance, the FBA sub-warehouse charge policy may seem like a simple price increase, but a deeper look reveals that it is a result of Amazon's infrastructure development over the years. This has raised the threshold for e-commerce logistics, creating a downward pressure on other platforms and even posing a challenge to the delivery efficiency of offline retail stores.

In terms of the e-commerce market share, Amazon is "far ahead" in the U.S., so its goal is to gain a share of the offline retail market, and the biggest difference lies in delivery efficiency. Therefore, sellers and service providers in the Amazon ecosystem are embarking on an elimination race, whereby remaining players need to increase their operational investment and keep pace with Amazon's rapid advancements to avoid elimination. This seemingly endless upward spiral is aimed at achieving customer experience that was previously unimaginable, ultimately increasing the overall penetration of online e-commerce in the U.S. and vying for more share of the offline-to-online transition.

Ebrun: What new challenges do businesses currently face in cross-border logistics? What kind of supply chain capabilities should they have to better adapt to industry trends?

Li Cong: Market competition is undoubtedly becoming more intense, and the requirements from platforms for businesses are also increasing. Everyone should take note that Amazon's recent front-end algorithm has transitioned from A9 to AI algorithm COSMO, while the back-end logistics network has shifted to a regional delivery network. These two changes have almost occurred simultaneously. Can you sense what this implies?

Amazon has silently initiated a thorough evolution of its platform, shifting from selling the best products to focusing around customer needs. From personalized displays for thousands of users, this extends into the background, bringing goods that predict customer demands closer to the supply chain network near consumers. The digitized supply chain network driven by data and the display of customer demand predictions form a mutually reinforcing pattern that has taken shape.

This transformation brings both challenges and opportunities. For example, due to shortened delivery times, there has been an increase in the demand for some daily necessities at Amazon, while the pace of sub-warehousing for items with lower purchase frequency may be relatively slower.

In the short term, the evolution of FBA may directly accelerate the elimination of sellers. In the long run, you must produce products with sufficient comparative advantages, differentiation, and have the strength to achieve standardized inventory management. Based on Amazon's policy orientation, all sellers need to have very strong supply chain management capabilities - accuracy in supply chain management, fast turnover, maintaining safety stock, and failing to meet the requirements will incur various additional costs, including penalties. Therefore, the demand for supply chain management capabilities has increased significantly.

In this respect, Chinese cross-border e-commerce companies have much room for improvement compared to mature retailers in Europe and the U.S. For example, some large overseas retailers have the advantage of scale, have substantial influence with factories, have the ability to layout independent supply chain networks, and have mature experience in supply chain management technology, allowing for proactive supply chain planning.

In contrast, most Chinese cross-border e-commerce sellers, due to their small scale, may not even reach the minimum order quantity of factories with each order, and small orders may not receive sufficient attention from shipping companies, often encountering many unexpected delays and uncertainties. To avoid these delays, they need to prepare multiple weeks of inventory. This inevitably leads to slower turnover and reduced competitiveness. Of course, the need to strengthen supply chain management and technological capabilities is a fact that cannot be denied.

02

"Full management" promotes increased concentration in the cross-border logistics industry

Ebrun: In the past one or two years, the rise of the "full management" model and the active activities of the "four small dragons" going overseas, what impact has this had on the cross-border e-commerce logistics service industry?

Li Cong: Under the "full management" model, platforms entrust the entire logistics chain to third-party service providers through segmented and centralized procurement, allowing each segment and link to select the best service providers and precisely control each stage, including the control of cost and efficiency, to form the best supply chain.

One starting point of this model is that many current full-chain logistics service providers on the market do not meet the standards required by the platforms, so the platforms have to take on the role of an integrator themselves.

Objectively speaking, if the platform continues to play this role in the long term, third-party service providers will gradually become carriers that focus solely on a certain section. For example, this year, the "four small dragons" platforms have chosen to charter more flights directly with airlines, reducing their procurement from forwarders, as they need more actual capacity bearers and operators to bear the main part, while third-party freight forwarders are responsible for relatively minor and flexible volume supplementation.

As such, many service providers without the essential logistics node resource capabilities will be forced out, with more players who have infrastructure capabilities at each node becoming the platform’s service providers. For service providers, serving the platform may lead to a large number of orders and rapid income growth. However, as the number of service providers that can be officially listed by the platform is limited, in order to secure orders, it is necessary to make substantial infrastructure investments to improve speed and lower costs. The remaining service providers will face increased competition and risk elimination, as customer volume decreases.

For platform services, a disadvantage is that they will lose some degree of autonomy, as they lack direct customers and face high substitutability. Additionally, the platform's payment terms are relatively long, leading to significant cash flow pressures, resulting in a lack of sufficient incentive for service providers to invest in infrastructure. This pushes for the promotion of fixed asset construction in competitive negotiations and network advantages. It also promotes a substantial increase in the concentration of the entire logistics industry.

Looking at the current results, this stage can lower costs and improve efficiency. However, there is a ceiling to the increases in speed and cost reductions, as there is not much progress and slow development in infrastructure investment. Service providers are reluctant to make large-scale long-term infrastructure development investments without obtaining long-term contractual relationships. This situation will take some time to change, as all platforms face pressure from Amazon's increased speed. After all, Amazon still holds the majority of the market share in the cross-border e-commerce market, and its overflow logistics service share is predominant.

Ebrun: Since the launch of "Temu" “semi-management” model in mid-March this year and the inclusion of merchants with overseas warehouse stock, shifting logistics responsibilities to sellers, what changes has this brought to the logistics service industry?

Li Cong: For third-party logistics service providers, especially those providing overseas warehouse services, this is a very good opportunity, as they can attract a share of the demand for Chinese platforms' overseas warehouses.

For platforms, the overseas warehouse stock model is one of the key areas for expanding platform business and improving competitiveness. Many categories must utilize overseas warehouses, and the platform itself cannot construct that many overseas warehouses in the short term, so it must open them up. After all, overseas logistics infrastructure is inherently a natural barrier and requires long-term continuous construction.

However, the semi-management of the overseas warehouse delivery model also faces some challenges, including pricing strategies and management models that still need to be validated by the market. For example, can overseas warehouses maintain such low prices? There is an overabundance of production capacity and inventory in China, allowing for extremely low prices through domestic stock and direct shipping. However, once the transport of goods exceeds tens of thousands of kilometers and reaches the U.S. overseas warehouse, will there be excess inventory and production capacity overseas?

The answer is no - products stocked in overseas warehouses will not face such overstocking. This is because when anyone moves goods to the U.S., it is a sunk cost with no possibility of retrieving, and products stocked overseas also face various compliance issues that need to be addressed. The sunk costs are high, so there will not be large-scale overstocking overseas as there might be domestically. This will alleviate the intense price competition of full management.

03

Overseas warehouse market seems booming, but expansion should be approached with caution

Ebrun：Cross-border e-commerce overseas warehousing services have seen fast growth in recent years. From your observation, what are the main competitive points for everyone?

Li Cong: The biggest problem faced by overseas warehouses this year is that warehouse rents are at a high level and have settled down, while the vacancy rate is gradually rising. Historically, it takes about a year and a half to two years after the vacancy rate peaks before rents reach their lowest point. Therefore, large-scale overseas warehouses are relatively cautious when expanding warehouses. Once a lease is signed for a warehouse, the lease term often exceeds 7 years, and in some cases, even 10 years.

Currently, the warehouse areas of most mid-sized overseas warehouses are between two to three hundred thousand square meters. Even if rental prices are high, expansion is necessary for future development. However, if rents decrease after two years, the current warehouse costs are affected. A prudent approach is somewhat similar to systematic investment - steadily expanding warehouse spaces at regular intervals.

If you started laying out your strategy in 2018, steady expansion of warehouse space each year is manageable, and the proportion of warehouse spaces leased at each price point is relatively similar, with the overall rental level being more stable and lower than market levels. But if you only recently began building warehouses (especially from 2021-2022 onwards), your proportion of high-priced warehouse areas is high. If rents continue to decrease over the next year or two, the cost pressure for high-end pricing strategies will be very significant.

For example, this year, if companies A and B both expanded ten thousand square meters of high-priced warehouses, this ten thousand square meters accounts for 10% at company A's rate but 40% at company B's rate. If rents continue to decline over the next one to two years, the cost pressure for company B's rents will be very high.

These competitive points are worth noting in the cross-border e-commerce overseas warehousing service industry.So, it should be noted that logistics is an industry with large investment and a long cycle. When building overseas warehouses, companies need to consider the cyclical fluctuations and choose the right timing for warehouse construction. They should not only consider meeting the current business expansion to expand the warehouse, otherwise they could easily be engulfed by the cycle. In the United States, due to the significant increase in warehouse rents and prices over the past decade, early-built warehouses and overseas warehouses that have already achieved economies of scale have a significant relative advantage, while new entrants need to wait for market testing.

Ebrun: From the perspective of cross-border e-commerce product categories, it seems that the overseas sale of large items is a relatively untapped market. From the perspective of the logistics supply chain, it has higher entry barriers and requires the ability for sellers to "ship through FBA." Therefore, there have been some specialized service providers focusing on large-item logistics and overseas warehousing. Do you think this is a good track to pursue?

Li Cong: Third-party large-item logistics service providers have always existed, because the fees for Amazon FBA large-item delivery are relatively high, resulting in a noticeable overflow of demand.

In 2021-2022, there weren't many companies that branded themselves as "large-item logistics enterprises," because the market was in the destocking phase for furniture product categories, where goods in warehouses turned over slowly and sales of large items were seriously unsatisfactory, which rendered the story of the large-item logistics service providers powerless. In the past year, as the furniture product category reached the latter part of the passive destocking phase, the balance of warehouse inventory and sales rapidly decreased throughout 2023. This was mainly due to sellers clearing out their inventory through discounts and promotions, which boosted the sales volume of large items, thus bringing a very promising outlook for large-item logistics service providers, resulting in substantial revenue and profit.

For large-item service providers, the cost advantage for last-mile delivery is merely an external resource, not a capability. The real core competency to be developed should start from internal warehouse operations, specialized large-item delivery capabilities, and even installation capabilities.

Ebrun: What should current overseas warehouse service providers do in a rational manner?

Li Cong: It's undeniable that there is still overflow warehousing demand for Amazon, and expansion is indeed necessary now, but warehouse expansion should be based on long-term planning, and be more cautious and comprehensive.

In addition, warehousing expansion should not be concentrated in one region, but consider regional layout by properly considering the eight zones of FBA. In other words, do not just build warehouses in the most expensive places in the western United States; there should be strategic planning to deploy resources in new regions, which could increase warehousing capacity, maintain growth rates, and also disperse warehousing resources, thereby controlling costs.

In any case, infrastructure network construction is still necessary. Just like most overseas warehouses currently have only two zones, if it were possible to have four zones, efficiency would be higher. This requires a certain degree of forward-looking trial deployment, rather than solely focusing on existing business. Ebrun was quite early in deploying overseas warehouses in the southern United States, but at that time, customer response was mediocre. Now, everyone is gradually seeing the value, but the early rental advantage is something that current warehouse-renting companies cannot achieve. Of course, timing is also quite important; being too early or too late is not good.

Automation is also another very important development branch. Especially in the current context of high wages and relatively inadequate labor force. Of course, the threshold has also been raised.

04

Inbound logistics for China's cross-border e-commerce cannot evade the time barrier

Ebrun: After entering the mature market in China, logistics companies that previously focused on the domestic market have accelerated their layout into the overseas business. YTO Express, Shunfeng, Deppon Express, JD, and Best all joined in. Will this bring something different to the entire cross-border e-commerce logistics market?

Li Cong: There will not be too much change in the short term. In order to truly make a deep impact, they need a long period of investment, which is a natural barrier in the logistics industry.

It also depends on whether there is a sufficient increase in market volume. Without sufficient volume, it's impossible to survive with the existing profit margins in a mature market. In other words, you need enough orders to support your infrastructure investment. Moreover, relying solely on cross-border e-commerce orders may not be enough; there is also a need to develop local overseas orders, otherwise, it's impossible to establish a competitive express delivery network.

In this scenario, strategic judgment is the key, as it also requires a construction period. Whether the Chinese model can be successfully replicated overseas, there must be a realistic and pragmatic attitude as market differences across regions are very significant.

Ebrun: Looking at the entire cross-border e-commerce logistics chain from inbound from China to the last-mile delivery overseas, which segment faces the biggest challenges this year? Which type of logistics service provider will face greater competition?

Li Cong: The biggest challenge lies in the trunk line. This year, the air freight trunk line faces significant pressure, and overseas airport customs have already been put to the test. As for the sea freight trunk line, with the record-breaking increase in capacity this year, even if the crisis in the shipping market does not end, there will be an oversupply of capacity in the second half of the year, as trade growth far lags behind capacity growth. If the shipping crisis is resolved early, the oversupply of capacity will occur even earlier. Additionally, changes in FBA policies will lead to an increasingly smaller volume of sub-warehouse orders from sellers, and it may lead to very dispersed operations. For a single container, the number of orders will grow exponentially. As goods become more dispersed, more shelves and space are required to store and manage them separately, resulting in increased costs and decreased warehouse turnover capabilities. The shipment of goods that are becoming more decentralized also requires more manpower, leading to increased rental occupation, decreased warehouse turnover capacity, higher shipping costs, and reduced efficiency. Goods that used to be delivered to a single FBA warehouse, where a truck or two would be busy, are now scattered across five or six warehouses, and it might require courier services rather than full truck load services, leading to higher costs and decreased efficiency, as well as a need for more manual operations. This is an irreversible reality.

Under these circumstances, first-mile service providers can only raise prices and invest more.

Ebrun: How is the last-mile delivery market environment in the United States this year?

Li Cong: The overall capacity of the entire logistics network for domestic delivery in the United States is in surplus by at least 10%. On one hand, major express delivery companies such as UPS, FedEx, and USPS invested large sums of money in recent years, resulting in a significant increase in capacity. On the other hand, due to the worker strike at UPS, many orders were transferred to some regional service providers, thereby augmenting capacity growth for regional service providers. Now, it's not easy for UPS to reclaim these orders, resulting in intense price competition. Inflation is also driving up labor costs and fuel prices. These express delivery companies are now implementing strategies to compress the supply-side service capabilities, including warehouse closures, layoffs, and transitioning from aircraft to truck transportation, to ensure supply-demand balance and maintain price levels to cover rising labor and other costs. Therefore, the price of last-mile delivery in the United States will not see a substantial decrease.

We can also see that the performance of many American trucking companies declined last year. What does this indicate? It suggests that the entire market is in a destocking phase, with a significant decrease in the frequency of goods handling. The entire logistics network in the United States is in a period of relative contraction; reducing goods handling frequency and increasing speed of FBA turning over from 1.2 to 1 (per month) enabled Amazon to save millions of square meters of warehouse space and tens of thousands of workers. This ratio is significantly better than Walmart's 1.4 for inventory turnover.

For cross-border merchants, due to inflation, the cost of last-mile delivery will still rise; nearly every year for the past few decades, the express delivery costs in the United States have grown almost steadily at a rate of 4%-5%.

For third-party logistics service providers, the overall excess capacity situation in the United States has not provided much opportunity across the network. However, given that Amazon FBA has achieved a regional network, the prospects for last-mile delivery in regional networks are promising. There are plenty of opportunities here.

05

From serving cross-border e-commerce sellers to serving global brands

Ebrun: What are ZTO Express's business focuses in 2024?

Li Cong: This year, the focus of our business is as follows:

First, increase investment in air trunk lines to ensure stability. For example, we have added 2 chartered flights this year, and will continue to increase in the future.

Second, continue to intensify efforts in node resources and overseas warehouse layout, increasing quantity while also paying attention to regional granularity layout.

Third, regarding service objects, we will introduce more Chinese brands going overseas and enterprises with B2B+B2C fusion needs.

It seems that ZTO Express has already matured in terms of serving e-commerce sellers and standardized fulfillment products for e-commerce platforms. Moving forward, we will not only be satisfied with e-commerce platform business. We will provide detailed service optimizations for our customers to support their development across multiple channels. At the same time, we will consider how to meet the needs of professional customer groups and professional product categories to a greater extent. For example, as some customers increase in scale, they need exclusive warehouses with stable operational capabilities; some customers, due to the nature of their products, require professional logistics transportation and storage capabilities.

We believe that in the future, the growth of Chinese brands going overseas will be a "big river," and cross-border e-commerce is just one of the tributaries flowing into it. Therefore, as a service provider, our service level must continue to improve, from the cross-border e-commerce seller group to a larger clientele of brand owners.Ebrun: ZTO Express is now considered the leader in the cross-border e-commerce logistics field. Looking back on the entire development process, what competitive advantages do you think you have established? What are your goals for the next stage?

Li Cong: We have always adhered to the long-term view, attaching importance to valuable heavy asset investment and early layout of future infrastructure, which is a major premise. As of now, ZTO has 1.4 million square meters of warehouses globally, nearly 300,000 square meters of transit stations, and 4 independently controllable intercontinental cargo planes. We believe that with the increasing investment in fixed assets and the entire operational system, autonomy will become stronger, contributing more to improving efficiency and stability.

We position ourselves as a "global cross-border e-commerce infrastructure service provider." Over the past few years, we have established an end-to-end cross-border logistics chain from the first mile to the last mile, making us one of the few service providers that simultaneously possess dedicated logistics lines and overseas warehouses.

Looking to the future, we will certainly focus more on industry development needs, refine our services, and pay closer attention to the changing demands of frontline customers to achieve better customer experience.