The courier has been pouring money into Southeast Asia in recent months, and has come up with a highly incentivized, punishing model to maximize pressure on the sales team.
Photo from CFP
By BAI Fan
With business bad at home, Chinese couriers are looking overseas. SF, recently inducted into the Fortune 500 hall of fame, makes no secret of its ambitions in Southeast Asia – highly incentivized, punishing ambitions that aim to put merciless pressure on the SF sales team.
SF Express owns 51 percent of a new entity established in Thailand, Kerry Express International. The company has been pouring money into Southeast Asia in recent months, with seemingly no promotion too bizarre. Customers have been offered special rates for sending mooncakes to their families during the mid-autumn festival season.
Top performers of SF in SEA have a chance of winning prizes of up to 2,888 yuan (US$420). Non-top staff will be culled, though whether this will also occur on a daily basis remains to be seen.
Until recently SF Express had used local couriers in SEA or formed joint ventures with them. Currently, packages are taken over by local partners when they reach their destination country. Since Kerry Logistics already has a large presence in Southeast Asia – the biggest in Thailand and the third largest in the region as a whole – Kerry Express International is expected to “enable SF Express to offer better, cheaper services.”
Chinese companies believe Southeast Asia is ripe for an e-commerce boom, and that they should be the ones to profit from it. Given current GDP per capita and smartphone use, there is no shortage of eager analysts foreseeing a growth trajectory similar to China’s in the 2010s.
Analyst ZHAO Xiaomin, CEO of Guanshuo Capital, said it will take more than low prices to win over the market. Absorbing and eliminating potential competitors, including Kerry, leaves the field clear for whatever strategy seems likely to win the inevitable price war and race to the bottom.
YT Express and J&T will likely be SF Express’s biggest rivals. J&T grew out of Southeast Asia and has an extensive ground and air network in the region. YT Express recently formed a partnership with an operator of the new China Laos railway and has been flying its own cargo aircraft to SEA since 2018. SF owns 73 cargo aircraft and has 80 charters at its disposal.
