2023 Summary of Annual Insights into the Container Transportation Industry
I. The post-epidemic era: a return to normalcy
From 20-22 years, it is the high-speed development period of the collection and transportation industry, standing on the wind mouth, just like the cross-border logistics industry. The plate of the whole industry is growing at a high speed. Overseas Chinese and international students all over the world, users who have needs and can be reached, basically begin to reach and be influenced. Potential users who have not been reached and transformed are also difficult to transform in the form of consolidation business.
Industry growth rate returns to normal
There was a 30% growth rate for good consolidation companies during 20-22. Going back to FY23, this group of companies still maintains a growth rate of around 151 TP3T.
And in 2023, there is no significant increment in business for most of the consolidators that do not have much competitiveness. In regions where competition for stock users is very obvious, such as Hong Kong, Macau and Taiwan, the plates of small and medium-sized players are still shrinking because of the strength of the head players.
Gone are the days when all players in the entire market were able to have growth, and the consolidation market is returning to normality.
Incremental users return to the norm
Where will the new incremental user base be in the consolidation industry?
One is the hundreds of thousands of international students who go abroad every year, and the other is the number of people who go abroad for other reasons, as well as the addition of the original local Chinese user base. There will still be some incremental growth in the general containerization market each year, but the order of magnitude of the new user base for the entire containerization industry will return to normal.
Market Heat Returns to Normal
The year 2023 is the peak year for the ecology of the consolidation business. Whether it's new entrants to the market, logistics service providers, or supporting software service providers, it's all peaking.
Service provider players who have not stood on their feet, it is difficult to follow up with greater development, the industry's rapid growth has passed, the large stock of user base has been divided.
Subsequent entry players, basically, are also crossover players, with their own unique resources and capabilities in certain areas and entry points.
II. Containerized transport companies: new challenges
Moving from high growth to normalization will require a reset of mindset and expectations for every player in the industry, as well as an adjustment of the company's strategic direction and sense of pace.
Since 2023, there have been more and more entry players, each of which carries its own unique competitive advantage. Some have traffic capabilities, some have channel strengths, and others come with their own brands and momentum.
Challenges for Head Container Carriers
The dependence of the head players in the containerized transport industry on the platform is not as serious as in the cross-border logistics industry, but they are also facing the risk of interception and interception of users at the level of the direct source IP judgment of the e-commerce platform. The entire domestic e-commerce platform is becoming more and more serious involution, every link that can optimize the user experience is being reconstructed.
The model of the user's self-selected consolidation company's mail to the consolidation warehouse and then transported overseas is consistent with the model of cross-border cross-border e-commerce. But Pinduoduo Temu's model has proved that the extreme supply chain efficiency model is still invincible in the field of going overseas.
So no matter whether it is 1688's going to sea, or Tao Tian's Thousand Sails program, or Pinduoduo's recruitment of domestic service providers for going to sea, it is just a stage of the extreme efficiency model of going to sea to promote the stage.
This is the challenge faced by all the head consolidation companies, will it be just a stepping stone for the platform, will it end up being only a small module service provider in the platform's overseas logistics, will the end users be caught in the hands of the platform?
New challenges to competition: price wars
A lot of small and medium-sized containerization players we talked to this year, the most feedback is that the industry's gross margins are being compressed more and more. Especially the user base is sensitive to price, while new players enter the more containerized transportation areas.
Price war is a direct manifestation of full competition in an industry, a full price war will allow part of the industry players to be shuffled out of the game, but also will pull up the entry threshold of an industry.
For the industry, 2023, many traditional cross-border logistics companies to enter, these companies build their own logistics line, but also in the industry can get a lower price of peers. But logistics companies will be relatively short in the marketing of customer acquisition, and underestimated the cost of labor services of the collector, the easiest entry point is the low price entry strategy.
For most small and medium-sized consolidation companies, it will be increasingly difficult to attract users purely by price competition, which is not the strong point of small and medium-sized consolidation companies.
The new user challenge: traffic acquisition
In 2023, if there are any new forces within the industry that are seen to be growing at a high rate, perhaps it's still the teams that have unique acquisition strategies in terms of traffic, which are few and far between, but still exemplify the ability to provide insights into demand and iterative breakthroughs.
For the traffic and the desire of new users, many teams in 23 years ago did not feel, because the new users are too easy. But this year, these teams still use the same way as in previous years to post ads to cast flow, only to find that the entire traffic pattern has changed dramatically. Even if you pay the same amount of time and effort, but the effect is only 30% in the past.
Xiaohongshu users, being fully educated and screened, a user with active demand may have dozens of private messages to consult. Information flow placement and KOL cooperation, either the conversion rate is too high, or the uncertainty is too high, the return on investment ratio ROI can not be calculated.
With the new competitive landscape, what is a new entrant team to survive without a unique user acquisition strategy?
III. The way of doing business: the basics
Back to 2023, back to an operator's point of view, any fast-growing industry goes through these changes, and the ones that remain are the good entrepreneurs who are deeply committed to the industry, and the ones that are quickly eliminated are basically opportunists.
Standing outside the industry to look at, the collection of transportation belongs to the field of sea, this industry is still a niche industry, there is no absolute super head and the emergence of the brand, although many competitors, but it is still a market with more opportunities.
Standing in the industry, to be better, or to return to the operation of the entrepreneur, back to practicing the basics. After all, after the tide, can stay, can continue to do addition and upgrade, or a team of basic skills.
Fundamentals: user services
What is the moat of a containerized transportation company? What is the capability that differentiates it from its competitors? If you choose only one, it can only be the power of user service. In a homogenized competitive scenario, users are able to completely trust your ability to choose you.
Give you a seed and whether you can make it take root and grow fruit.
The ability to allow users to take root is especially important for special groups such as overseas Chinese and international students who have regional communities.
Other capabilities, the market competition is fully mature, there will be supporting service providers to collaborate to complete. Or you grow to a certain volume, you can complete the self-built self-supply.
Post 2023 consolidation, normalized market, operational fundamentals, user service power as fundamental.
Basic skills: marketability
The stock market in the consolidation industry is already in a state of full competition, if there is to be an entry point, the easier direction is - incremental users?
It's probably easiest for the market of hundreds of thousands of international students who go abroad every year. Because users have not been educated and scrubbed. Or unexplored countries and regions that are still in a barren state, the market is relatively small space, fewer competitors, and more potential incremental users.
Incremental user acquisition relies on marketability behind it.
Is the team's ability to take money for placement and platforms for users? Or is it content capability with leverage? Or is it the ability to localize the market directly?
The ability to consistently acquire new subscribers is central to any consolidation team entering the market after 2023, or for international student-focused consolidators.
Basic skills: postal warehousing
In 2023, exchanged a lot of Europe and the United States in the region of the consolidation company, time-honored players, generally used in Southeast Asia's warehousing model, but also talk about more refined digitalization of the new warehousing service system. Although there are ideas, but there is not much power to promote the upgrade iteration.
The last kilometer of the postal warehouse is the product service we provide directly to the user. The continuous upgrading and iteration of the product reflects the ability of the user can directly perceive the value.
The digital upgrading of postal warehousing, the first thing that brings is the cost improvement, the team capacity requirements, followed by the user value embodiment, and finally the market competitiveness embodiment.
For players who are deeply engaged in this track, they are silently improving their product power, not confining themselves to the present, but also laying out the future.
2024 Annual Outlook for the Container Transportation Industry
Standing on the last day of 2023, lying in bed writing this article, looking ahead to 2024 and talking about what I see as trends and changes in the consolidation industry.
I. Container head: The Matthew Effect
The so-called giants, that is, we are not a competitive volume of players, although the collection of transportation is a small market. But for all cross-border logistics companies that want to go to sea, although the collection and transportation is not the main goal, but take the market, it is also considered a small performance and results.
Giant Cutting: Head Horsepower
Domestic rookie, pole rabbit, China Express giant's attempt to go to sea, collection and transportation will be a small pilot of these platforms themselves, but in the mature volume area, will also be the focus of the direction of attack. For example, the layout of the rookie in Hong Kong, the entire Hong Kong area of the collection and transportation market will certainly appear Matthew effect, the head may occupy more than seventy percent of the share, the other players can only eat a few difficult to eat the share.
But the good thing about this market is that there are still policies and regulations in place that have a natural limitation on the entry of giants and an umbrella for smaller players.
For Hong Kong, Macao, Taiwan, Southeast Asia and other regions with volume and within the influence of domestic policies, the Matthew effect of the giants is a nailed-on reality.
After several years of rapid development, the collection and transportation industry itself gradually grew up the company also has a certain amount of capital and team strength. Began to gradually layout self-managed mail route products, localization capabilities, the formation of its own moat and brand influence.
The United Kingdom is the most dynamic region of the consolidation market, with a good volume of target user groups, sufficient capacity of users to pay, sufficient willingness to pay, and most importantly, relatively loose customs clearance conditions. Anyone who is in the global container market will basically be in the UK. Jump to 2024 vision, the United Kingdom also gradually formed a multi-power pattern of competition. In the future, we can't judge whether there will be a super head of a container company that occupies more than 50% market share, but the core global container countries will form a multi-power pattern in a single country.
For the container shipping companies, finding their own base, finding their own base, deep plowing in a certain country, deep localization, and forming a moat of product and service brands is a road that all the head players have to go down. So, in 2024, which country is everyone's base plate again?
II. Industry innovation: breaking the crowd
In the second half of 2023, I traveled to a lot of industrial zones and talked to a lot of entrepreneurs in the overseas business. Jumping to the level of China's seafaring, transportation is only one of the " Chinese goods sold to overseas Chinese supporting service providers " in the ring.
Business form: convergence
For the players in the entire container transportation industry, the target user group we serve is only about 1% of the population in the destination country's national population, and there is still a 99% user demand market to be developed.
Cross-border logistics companies cut into the collector, the generation of players cut into the collector, the collector players cut into the generation of picking and buying, the collector players on behalf of the purchase, dropshipping.
The diversification of sea-going business forms, multi-level, interpenetration, and more and more integration. The scale of the head containerization player a few hundred million, the scale of the head of the proxy tens of billions of dollars, the scale of the head of the cross-border e-commerce tens of billions of dollars.
For players in the consolidation industry, on the one hand, it is necessary to deeply cultivate their own industry, on the one hand, it is also necessary to focus on the extension and development of the user base. Sometimes, what steals your users is often not a competitor in your industry itself.
Business models: innovating
Self-pickup point model, promotion agent, local distribution warehouse model, campus agent model, Chinese head model, overseas moving, self-owned large delivery model and so on, each model is an innovation. Each model corresponds to the needs and scenarios of a more segmented group of people.
For the consolidation industry, the birth of innovative models is the only way to make this industry healthier and more mature. For all the players who want to have more development in this industry, think about the innovation point, in order to have a breakthrough and the opportunity to bend the road.
In 2024, I'm sure some of the teams in sure to shine in new model innovations and achieve higher growth.
Third, 2024, can newcomers still enter?
In 2023, many international students approached Lao Jin for advice on whether the consolidation industry would still be viable and what the future landscape of the industry would be.
Will newcomers still be able to enter as a consolidator in 2024? The core point is that consolidation is one of the easiest industries to enter in the field of global shipping of Chinese commodities. Because the crowd is familiar, the culture is familiar, and the support is mature. Only need to have a certain number of users to be able to survive.
For China in the future, it is a relatively good choice for manufacturing to go overseas, commodities to go overseas, brands to go overseas, and even technology to go overseas.
With more than 200 countries around the world, find a good entry point, take advantage of the domestic manufacturing supply chain, be based on the present, and aspire to be global.
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