Growing Preference for Online Shopping Invigorate the E-Commerce Industry

FinancialBuzz.com News Commentary

NEW YORK, Nov. 11, 2022 /PRNewswire/ -- China's logistics and shipping industry has been growing at a rapid, yet steady pace for decades. However, the COVID-19 pandemic has accelerated development of the industry even further. In recent years, major shifts in shipping and logistics have started to take place. For example, according to McKinsey Insights, recent e-commerce patterns are fueling demand for air freight, an often-underappreciated value driver in the logistics sector. Traditionally, e-commerce supply chains relied mostly on maritime shipping to transport products in bulk to destination countries in advance, before local express providers take over the final leg of the delivery to the end customer. More recently though, there has been a shift in the industry, which is due to digital advances in e-commerce. These advances have empowered mass customization, especially in fast fashion, in what is termed the "direct line" model. This refers to transporting products in bulk via air freight to local postal companies in the final destination, empowering swift last-mile deliveries to the final customers. In fact, many Chinese companies including JD Logistics, Cainiao, SF Express, and YTO Express are actively growing their freighter fleets. This is a sign that the direct-line model is gradually replacing traditional postal and express delivery. Between 2016 and 2020, the demand for direct-line delivery has risen by 84%. Jowell Global Ltd. (NASDAQ: JWEL), ZTO Express (Cayman) Inc. (NYSE: ZTO), Grindrod Shipping Holdings Ltd. (NASDAQ: GRIN), BigCommerce Holdings, Inc. (NASDAQ: BIGC), eBay Inc. (NASDAQ: EBAY)

These shifts would not be happening without major growth in the e-commerce sector. The e-commerce market is driven, in large part, by the increasing preference for online shopping as well as the growing influence of social networking platforms on shopping habits. In addition, the growing trend of private-label services and direct to consumer-based business models are also impacting the outlook for market growth. Overall, these new market trends are beneficial as they enable e-commerce businesses to collect and use consumer data and provide personalized products and experiences to the consumer. By region, the Asian-Pacific is expected to remain in the lead. Six of the top 10 fastest-growing ecommerce countries in 2019 were from that region, led by India and the Philippines at more than 30% growth and rounded out by China, Malaysia, Indonesia and South Korea.

Jowell Global Ltd. (NASDAQ: JWEL) just announced breaking news that, "it has expanded its cooperation with ZTO Express (NYSE: ZTO), one of the leading express delivery companies in China in terms of parcel volume.

In November, 2022, JWEL and ZTO reached a customized warehouse distribution integration agreement which covers all logistic services for the Company, from warehousing management, express parcel distribution, express parcel packaging and express delivery, to be provided by ZTO Express.

Since the parties started cooperation a year ago in 2021, JWEL has used warehouse, logistics network and automatic sorting system at ZTO's regional center for its order processing. The joint efforts of the two parties have reduced the amount of time goods in transit, costs and losses in turnover, significantly improved operating efficiency for JWEL.

Mr. Zhiwei Xu, Chief Executive Officer and Chairman of Jowell Global Ltd., commented: 'ZTO operates a highly scalable network partner model that enables it to expand nationwide network quickly and provide e-commerce merchants with greater geographic reach at low cost. Operational efficiency and economies of scale enable JWEL to achieve strong operating leverage. After more than a year's working closely with ZTO, it is a pleasure to announce an expansion to our collaboration. I anticipate the newly signed warehouse distribution integration agreement will prove to be a pivotal step in realizing our growth strategy and ensuring customer satisfaction around the world. The agreement will not only help us to simplify our logistics network, save on operating costs and deepen the relationship with ZTO, but also have a greater impact on our reputation to attract international brands and products to be sold on our platform, which is an important facet to provide sustainable growth for both parties.'

The newly negotiated cooperation agreement is expected to further simplify major logistical processes, streamlining the distribution cycle and promote the seamless integration of numerous business processes of the Company. Moving forward, JWEL seeks to continue promoting in-depth cooperation with ZTO, to achieve sustainable growth for both parties and encourage high-quality development of the e-commerce logistics. Furthermore, JWEL will continue seek and cooperate with high-quality business partners to explore and expand international products and resources for its customers while improving their experience and satisfaction."

ZTO Express (Cayman) Inc. (NYSE: ZTO) announced back in August its unaudited financial results for the second quarter ended June 30, 2022. The Company delivered a parcel volume growth of 7.5% and expanded market share by 2 percentage points to 23% despite adverse impact from COVID while maintaining high quality of service and customer satisfaction. Adjusted net income increased 38.2% to reach RMB 1,758.7 million. Cash generated from operating activities was RMB 3,780.8 million. Mr. Meisong Lai, Founder, Chairman and Chief Executive Officer of ZTO, commented, "Despite the COVID resurgence and macro uncertainties in the first half, we delivered a robust set of results gaining in both volume and profit. Our parcel volume reached 6.2 billion, expanding our market share by 2.0 points to 23.0%, and adjusted net income increased by 38.2% to 1.8 billion while we maintained high quality of services and customer satisfaction. Being among the first to resume operations, ZTO capitalized on the growth momentum and accelerated volume growth by leveraging our strong infrastructure and capacity advantages. Our cost initiatives continued to yield results where standardization and digitization is allowing us to optimize economics across the entire network including our network partners' operations."

Grindrod Shipping Holdings Ltd. (NASDAQ: GRIN) reported back in October have entered into a transaction implementation agreement (the "Implementation Agreement"), dated October 11, 2022, among the Company, Taylor Maritime Investments Limited ("TMI") and Good Falkirk (MI) Limited, a wholly-owned subsidiary of TMI (the "Offeror"), providing for a voluntary conditional cash offer (the "Offer") to be made by the Offeror for all of the issued ordinary shares (the "Shares") in the capital of the Company (other than Shares held by the Offeror and Shares held in treasury) (the "Offer Shares"). Under the terms of the Offer, shareholders of the Company ("Grindrod Shareholders") will be entitled to receive the offer price of US$21.00 in cash for each Share tendered in the Offer. Under the terms of the Implementation Agreement, subject to the conditions to the Offer being satisfied (or, to the extent permitted, waived) as of the expiration time of the Offer, the Company has agreed to declare and pay a special dividend of US$5.00 per Share ("Special Dividend") to Grindrod Shareholders that hold Shares as of a dividend record date to be established by the Board.

BigCommerce Holdings, Inc. (NASDAQ: BIGC) announced in partnership with Snap, Inc., the launch of Snapchat for BigCommerce. BigCommerce merchants of all sizes in the US can now directly integrate their store as a one-stop shop to sync product catalogs and create immersive Snapchat ad campaigns to broaden customer reach, open new revenue streams and ultimately scale their business to the next level. "Giving merchants access to Snapchat's unique audience of 363 million daily active users opens up incredible opportunities for them to tap into a younger generation of influencers that master impacting a consumer's purchasing decision," said Sharon Gee, vice president of revenue growth and general manager of omnichannel at BigCommerce. "For BigCommerce, Snap's partnership broadens our direct integrations portfolio for omnichannel merchants on the BigCommerce platform, providing access to top performing social, search and marketplace channels from a single platform to sell more and increase revenue. Furthermore, this partnership provides unique benefits to our ecosystem of Omnichannel Certified Partners for merchants on any ecommerce platform via Feedonomics to drive return ad on spend and improve performance on hundreds of growth channels."

eBay Inc. (NASDAQ: EBAY) reported back in October the launch of Cross Border Parcel Shipping Solution or "CPaSS", a new cross-border parcel delivery integration platform covering currently eight markets, including Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam in the Asia-Pacific region, enabling sellers to choose from multiple logistics shipping solutions on a single platform. The platform simplifies the process of order integration and management for sellers, giving them extra flexibility to process orders from different accounts all at once while enhancing work efficiency and the overall shipping experience on eBay. Following the rapid growth of cross-border e-commerce in recent years, sellers are increasingly looking for ways to improve the efficiency of processing orders and handling customers' growing demands. In addition, logistics prices have soared due to pandemic-induced disruptions in the global supply chain, making the need for more efficient delivery platforms even more urgent.

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