"Imminent IPO: Flash Delivery Fueled by On-Demand Delivery Fray"

After a decade since its establishment,Shansong has finally reached the door of NASDAQ.

On September 13th,Eastern Time,Shansong officially submitted its prospectus,planning to go public in the United States with the stock code "FLX".As early as July,the official website of the China Securities Regulatory Commission disclosed the filing notice for Shansong's overseas listing.

Shansong focuses on "one-to-one dedicated delivery",especially for scenarios like "delivering documents" and "delivering cakes",where the entire process from pickup to delivery is handled by one courier,and they can only take one order at a time.With faster and more refined services,Shansong attracted a large number of white-collar and corporate clients at the beginning of its establishment.They are generally sensitive to time and more willing to pay a premium for high-quality services.

Shansong was once a star in the startup world,attracting 11 rounds of financing,with a total amount of $339 million,favored by many investment institutions,including large institutions such as Matrix Partners,Tiantu Investment,and Shunwei Capital.Its last round of financing was completed in March 2021,the D++ round,with a financing amount of $125 million.Since then,Shansong has not received new financing for three years.

In 2020,Shansong executives once stated that the company would go public soon.This year,Shansong's valuation has dropped to 7.1 billion yuan (Hurun Global Unicorn List),a nearly 30% decrease compared to 2021.At the same time,the battle in the instant delivery industry has reignited,and Shansong not only has to face competition from Dada (DADA.NDAQ) and SF City (9699.HK),but also has to deal with the encirclement of giants like JD.com,Meituan,Taobao,and Douyin.

In the prospectus,Shansong emphasizes that it belongs to a niche industry,"independent on-demand dedicated express delivery",and holds the first place with a market share of 33.9%.

In second place is UU Running Legs,which is also positioned in the business of dedicated delivery,with a share of 5.4%.Dada and SF City,which went public first in 2020 and 2021,are ranked third and fourth,far behind Shansong's leading position.

Shansong's ability to rank first is attributed to the definition of the "independent on-demand dedicated express delivery" track,pushing many competitors to the back or even out of the game.For example,Dada and SF City,backed by large platforms,are not limited to dedicated express delivery services,but also have platform-assigned orders and merchant advertising placements,which do not simply belong to the "independent" category.

Consumers may not be very aware of "independent on-demand dedicated express delivery" because,in addition to Shansong and UU,they can also deliver documents through instant delivery services like Dada,SF,and Meituan.The internet industry more commonly defines all the aforementioned companies as part of the "instant delivery industry." According to estimates by CITIC Construction Investment,in the instant delivery industry,food delivery orders account for more than 70%,presenting a duopoly competition between Meituan and Ele.me.Next are supermarket convenience and fresh food home delivery services,accounting for more than 20%,represented by Dada and SF City.Shunson's business only accounts for 6.6% of the total market,not on the same scale as the top businesses.

Shunson's "first" highlights two issues from the side: First,Shunson's business is singular,with all revenue coming from dedicated delivery services.Second,the competition in this industry is extremely fierce,with not only express delivery,e-commerce,and food delivery giants continuously increasing their bets,but also new players including Didi,Huolala,and AutoNavi Maps eyeing this piece of the cake.

This year,almost every month has seen players increasing their bets.For example,in May,JD.com launched the "JD Second Delivery" service,claiming to deliver goods to the door in as fast as 9 minutes; in July,Taobao added a new first-level traffic entry "Hourly Reach," partnering with merchants to open 1-hour reach flagship stores.They lowered order thresholds,provided subsidies,and sent coupons,etc.,which are real investments.

Behind Shunson's IPO in the United States at this time is the resumption of the war in the instant delivery industry.Shunson needs to spend money to fight again.Customer acquisition is listed by Shunson as the top priority for fundraising.

The revenue brought to Shunson and couriers per order is decreasing.

The number of orders for Shunson is increasing year by year,but the average revenue per order for Shunson and couriers is decreasing.

Shunson's largest expenditure is the labor cost of couriers,accounting for nearly 90%.A comparable figure is that Meituan,recognized as a company with high courier costs in the instant delivery field,pays about 70% of its food delivery revenue as courier salaries.

From 2021 to 2023,and the first half of 2024,Shunson's revenue was 3.04 billion yuan,4.003 billion yuan,4.529 billion yuan,and 2.284 billion yuan,respectively.Among them,the salaries and rewards paid to couriers accounted for 90.5%,90.3%,87.8%,and 85.4% of the revenue,with corresponding order volumes of 159 million,213 million,271 million,and 138 million.

From this,it can be calculated that from 2021 to the first half of this year,the average income per order for Shunson couriers has decreased from 17 yuan to 14 yuan,and the revenue per order obtained by Shunson has decreased from 19 yuan to 16 yuan.Hua'an Securities pointed out in its research report that currently,the services provided by participants in the instant delivery sector are similar,with delivery times achievable within 30 minutes to 2 hours and delivery radii focused within a 3-kilometer range.The advantage of Flash Delivery's coverage in cities and delivery efficiency is no longer significant,making it difficult to differentiate from other platforms.

Flash Delivery currently serves 295 cities,mainly concentrated in first and second-tier cities.However,SF Express Same City and Dada have penetrated to county towns,achieving coverage in nearly 2000 counties and cities.

In addition,unlike Meituan and Dingdong,which have high-profit offline businesses or retail businesses to support them,Flash Delivery also lacks the resource infusion from major shareholders like SF Express Same City and Dada.Living in the cracks of giants,without platform traffic support,price reduction seems to be a more convenient weapon for Flash Delivery.

The income of couriers has decreased,making it more difficult to make money through Flash Delivery.After all,compared to the high-frequency business scenario of delivering multiple orders at a time in food delivery,the volume of one-to-one dedicated delivery is much less.

A courier in a first-tier city told the Economic Observer Network that since last year,Flash Delivery has notified price reductions several times,and he has clearly felt that the income per order is declining.

He sent a screenshot of an order during a break in his delivery run.This was a self-operated order assigned by the system,with an order amount of just over 30 yuan.He said that two years ago,the amount for this type of order was between 38 yuan and 41 yuan.At that time,the pricing per kilometer was more than two yuan,but now the pricing for long-distance orders is only more than one yuan per kilometer.

He and other couriers in the courier group have also found that the platform's order assignment rules are being adjusted,making "more work,more gain" increasingly difficult.Previously,they could stably earn 150 yuan before 1 pm every day,but now once they reach 150 yuan,even if the courier wants to run more,the platform will at most assign orders to let them reach 250 yuan,and then rarely assign orders.

Market competition is becoming more intense,and instant delivery may see lower prices per order as the order volume increases,ultimately affecting performance.

Express industry expert Zhao Xiaomin analyzed that Flash Delivery did not seize the opportunity for scale expansion during its best period,and it is not surprising that its valuation has shrunk under the current market situation.

However,Zhao Xiaomin still looks forward to the prospects of the instant delivery field.He believes that once Flash Delivery successfully goes public,Chinese concept stocks will give it a higher expectation.After solving the listing issue,Flash Delivery will still face significant changes.In addition to competing within the "one-to-one" dedicated delivery system,Flash Delivery is also in the instant delivery competition system of Meituan and Ele.me.As an independent third party,how Flash Delivery adjusts its strategy,whether to steadily develop or transform into an aggressive model in the next step,is a choice it must make.