Kuaiyouda Express (Sichuan) Co., Ltd.

Chengdu, China Site Visit

January, 2015

By

Eric Xiang

Key Personnel:

Mr. Zhu Jianing, General Manager

Mr. Zhang Hong, Manager – Network Management

Kuaiyouda Express (Sichuan) Co., Ltd. (KYD Express) is a new logistics company with a focus on business-to-consumer (B2C) e-commerce business. Its strength is delivery to the buyers’ door with COD (cash on delivery) terms. The company was established in 2013 and is well-known in Sichuan province. More than 500 employees work in the company with over 80 of them at its headquarters located in Chengdu near the Chengdu airport.

KYD Express focuses on the Sichuan market as it aims to be an e-commerce logistics specialist in the province. Sichuan is different than Shanghai, Beijing, Guangdong, Zhejiang, Jiangsu, and other provinces in the areas of North China Plain, Yangtze River Plain and Pearl River Delta. There are mountains in Sichuan making it difficult to manage transportation costs. Therefore, having transportation experience in Shanghai, Beijing, Guangzhou and Shenzhen is not the same as having transportation experience in Sichuan.

KYD Express’ operations center is in Chengdu and its warehouse is around 2,000 square meters. Seventy branch offices cover most of the counties and towns in Sichuan. Some are owned offices and some are joint ventures. In Chengdu’s city area, KYD Express has around 35 owned representative offices to cover the whole city. There are 8-10 employees in each office and one person in charge of delivery for a designated region.

KYD Express has 30 of its own trucks to transport cargo between the operations center and each branch office. For some destinations, KYD Express can guarantee 24-hour delivery. But for most destinations, 24-hour delivery cannot be guaranteed due to Sichuan’s weather (rainy in the summer and fog or snow in winter).

There are more than 81 million residents in Sichuan. In the past, Sichuan has had good development because of the western development plan of China’s central government. The e-commerce market in Sichuan has potential in the future. KYD Express helped its key account VIP.com operate a warehouse in the city of Jianyang as VIP.com ‘s RDC (regional distribution center) is in western China. The new RDC will open soon. Currently, KYD Express is VIP.com’s leading logistics service provider in Sichuan.

Other than e-commerce customers, KYD Express is developing business for express shipments. For example, KYD Express was retailer Chengdu Wangfujing’s nominated logistics service provider during the Chinese Spring Festival. Consumers who purchased from Chengdu Wangfujing could use KYD Express to deliver their purchases to their hometown.

According to Network Manager, Mr. Zhang Hong, KYD Express’ daily cargo volume reaches about 20,000 shipments, which is good for a new company. To assist with its cargo volume growth, KYD needs more local agents in the countryside or villages and towns. Mr. Zhang Hong has confidence in KYD Express’ network to be the best express player in western China. KYD Express doesn’t plan to expand to other provinces. In the future, merging with another express company may be an option.

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