Expanding boundaries and achieving endogenous and exogenous growth is the 'only way' for almost all enterprises to adhere to long-termism in uncertain markets.

On July 1, SF Express's largest third-party instant distribution platform SoFast officially landed in Hong Kong, providing instant delivery services for the first time in markets outside mainland China under the brand of SoFast in China. This is also seen as its first move into overseas markets.

It is reported that SoFast will rely on SFHK App of SF Express Hong Kong to achieve business landing in the early stage of its launch, improve the time efficiency of original same-city express logistics, deliver within an hour, and expand its delivery range to include all categories such as documents, flowers, dining, jewelry, digital products, etc. Users can select and use SoFast service of SF Express within the latest version of SF Express Hong Kong APP and enjoy high discounts for both new and old users.

It is not difficult to see that the entry of the SoFast brand, the expansion of service boundaries, has opened a new blueprint for the immediate delivery business in China's inland areas.

'Outsourcing': Expanding service boundaries and anchoring Hong Kong's immediate distribution market development bonus.

In the new retail era, unlike the booming development of the immediate delivery industry in mainland China, the immediate delivery industry in Hong Kong is clearly a 'fertile ground' waiting to be explored in the market.

Based on two groups of data as evidence.

In a fast-paced urban lifestyle, the demand for online delivery services in Hong Kong has surged. It is estimated that the total income of Hong Kong's online delivery market will grow by 12.2% to RMB 28.7 billion (about HKD 30.86 billion) by 2024, and non-catering online delivery income will reach RMB 22.18 billion (about HKD 23.85 billion), maintaining an 11% growth until 2025. In addition, Statista estimates that by 2025, the penetration rate of the Hong Kong catering takeaway delivery market will only be 3%, which has greater room for growth than the mainland catering takeaway delivery market with a penetration rate of 30%.

In addition to the low penetration rate and great market potential in Hong Kong's immediate delivery industry, there are also obvious pain points for development. According to a previous research report by Lalamove, many SMEs in Hong Kong believe that customers not only expect same-day or immediate delivery (66%), but also hope to have delivery at designated time periods (68%), highlighting the high demand of Hong Kong consumers for delivery time efficiency.

In view of this, the entry of SF Express's SoFast brand into Hong Kong's immediate delivery industry obviously has its own deep meaning - that is, there is much room for improvement in time efficiency and experience for immediate delivery in Hong Kong. While bringing better immediate delivery experience to Hong Kong through its own solutions and technological accumulation in mainland China, SF Express will further anchor the development dividend of Hong Kong's immediate delivery market.

In addition, the Zhittong Finance APP believes that SF Express's entry into the Hong Kong immediate delivery industry is also expected to promote a virtuous development trend of the industry.

It is reported that in addition to 'personal express services', SF Express is expected to undertake more business for more new retail brands, take-out platforms, and e-commerce platforms, so as to replicate China's full-scenario mode in Hong Kong. For example, SF Express has already partnered with Meituan Waimai to create a more comprehensive delivery network for mainland businesses. With SoFast's entry into Hong Kong, SF Express is also likely to continue to cooperate with KeeTa under Meituan to serve as its supplementary transportation, undertaking peak, tailored, and long-tail transportation requirements. These deployments are expected to expand the service boundaries of Hong Kong's immediate delivery services, enhance market space, and promote the benign development of local diverse new retail.

'Endogenous': Deepening the core third-party advantage, realizing the value of long-termism.

From external factors, SF Express's entry into the Hong Kong market has anchored a broader market, while from internal factors, this move also helps the company realize the value of long-termism.

As the largest third-party instant delivery platform in China, SF Express inherits the 'professional' genes of SF Express, mainly providing same-city delivery services for merchants (to B) and individuals (to C), and helping traditional express logistics speed up its 'last mile' business and achieve full-scenario coverage of dining takeout, same-city retail, nearby e-commerce and nearby services.

Judging from the previous experience of SF Express's layout, in order to achieve real value-added and stable profits, the third-party instant delivery needs to continuously make the 'full-scenario mode advantages' increasingly prominent. On the one hand, it needs to strengthen the scale effect, that is, to form a strong market scale by seizing more market share; on the other hand, it needs to rely on the increase in order density, the richness of order structure, and the optimization of order distribution to improve labor efficiency and output, and achieve simultaneous reduction of costs, efficiency enhancement, and scale expansion.

In comparison, on the scale promotion, SF Express enters Hong Kong, taking C-end service pickup and delivery as the 'pioneer', and relying on logistics to enter all-scenario undertakings. With the resource advantages accumulated by SF Express in Hong Kong, it obviously has sufficient momentum to quickly attract and accumulate users, and further expand the company's market share. It is reported that SF Express currently has more than 1,500 business points, SF stations, smart cabinets and cooperative convenience stores in Hong Kong.

In terms of value enhancement, in the third-party instant distribution market, non-dining orders with corresponding high value are also present. At present, the main delivery tasks on the SoFast platform are files, small packages and other non-dining categories. The delivery income per kilometer is twice that of other takeout platforms, and the highest hourly income for knights can reach HKD 300. Work hours and task volume are flexible and optional. With the accumulation of a large number of high-value orders, it is clear that it will provide sufficient impetus for the profitability upgrade of SF Express Same-day City service.

In addition, in the all-scenario travel to Hong Kong, SF Express Same-day City SoFast is expected to further benchmark its domestic services in Hong Kong, expand personal user-side 'pick-up and delivery' services, access more merchant-side brand-owned apps, take-out platforms, etc., and based on in-depth synergy and capacity integration with SF Express Group, provide a large-scale, open and all-weather professional service for merchants, users, and major commercial and logistics platforms to undertake orders from more diversified channels, achieving full coverage of dining takeout, same-day retail, near-field e-commerce and near-field services.

Based on the above, with SF Express Same-day City expanding into the Hong Kong instant distribution market through the 'SoFast' brand, after achieving full-scale improvement in both scale and profit, the company's performance is expected to achieve strong growth as the service scenarios continue to expand.

In 2023, SF Express Same-day City became the first to achieve comprehensive profitability in the instant distribution industry. During this period, revenue was 12.387 billion yuan, a year-on-year increase of 21.1%, and gross profit was 0.795 billion yuan, a year-on-year increase of 93.5%. The gross profit margin increased by 2.4 percentage points to 6.4% year on year. At the same time, the company achieved a breakthrough overall profitability, with a net income of 64.9 million yuan from continuous operating businesses. Nowadays, as the company further explores the Hong Kong instant distribution market, its revenue scale and profit level are expected to significantly increase.

Taking the entry into Hong Kong under the SoFast brand as the first step in 'trying the waters' for overseas expansion, SF Express Same-day City may continue to move towards broader overseas markets in the future, using the business model that has already achieved profitability in the domestic market to 'stake out' in the most international city in the Greater Bay Area - Hong Kong, promoting a new level of performance and valuation.