JD Logistics acquires “Little SF Express” for RMB 3 billion.What does JD still lack to overtake in a corner?

JD to Release Q2 Financial Report

On August 14th, JD Group announced on the Hong Kong Stock Exchange that it had reached a final agreement in August 2020. JD Logistics would acquire a total of 3 billion RMB worth of shares and subscribe to new shares issued by Kuaiyue Express. JD expects the transaction to be completed in the third quarter of 2020.

1. JD's 3 Billion Acquisition of "Kuaiyue Express"

Based in Shenzhen, Kuaiyue Express was established in 2007 and is a large, modern comprehensive express delivery company specializing in "timed express" services. With a low-key and pragmatic development style, a self-operated fleet, and high revenue rates, it is often referred to as the "small Shunfeng." Its current valuation is estimated at 20 billion RMB, making it one of the top ten domestic LTL (less than truckload) express delivery companies in China.

Kuaiyue Express not only shares a similar business model with Shunfeng but also adopts a similar naming style for its domain. Shunfeng's official website domain is sf-express.com, a combination of "sf" for "Shunfeng" and "express" for "fast service." Similarly, Kuaiyue Express's official website domain is ky-express.com, where "ky" represents "Kuaiyue," also using "express" in English. They have also secured brand-related domains such as ky9.cn, kye-express.com.cn, kye-kye.com, and others.

However, this combination of domains may not be as memorable to Chinese users as a simple pinyin domain, and the hyphen ("-") in the middle adds complexity to typing. After JD Logistics acquires Kuaiyue Express, it remains to be seen whether they will change the domain to a unified "JD-style domain."

2. JD's Expansion in Mainline Logistics

JD Logistics Group, established in 2017, may seem ten years younger than Kuaiyue Express, but JD's founder, Liu Qiangdong, began building its logistics system as early as 2007. JD Logistics is the only company in the world with six logistics networks covering small and large parcels, cold chain, B2B, cross-border, and crowdsourcing (Dada). They have adopted the four-letter abbreviation domain jdwl.com as their official website domain, representing "JD Logistics."

Thanks to its robust logistics system, JD's self-operated businesses have thrived. In 2015, JD acquired jddj.com to replace the original domain pdj.jd.com for "JD Daojia," and they secured domains like jdtohome.com/.cn. Additionally, the online payment platform "JD Pay" adopted jdpay.com as its official website domain, with jdpay.cn/.com.cn/.net also being protected.

JD has been very focused on domain strategy since its 300 million RMB acquisition of jd.com. To stand out in the competitive express delivery industry, a concise and clearly meaningful pinyin domain is essential. "Kuai.com" is precisely such a high-quality pinyin domain.

3. Kuai.com Advancing Towards Becoming the Eighth Listed Company

"Kuai.com" directly corresponds to "fast," aligning perfectly with JD Logistics' goal of being "fast, precise, and efficient." It effectively communicates the brand's meaning while being in line with Chinese user habits, ensuring high recognition and ease of input and recall. Search engines also favor pinyin domains, granting them high keyword ranking weight.

Many major Chinese enterprises prefer short single-letter domains and have paid significant sums to acquire them. Examples include Fang.com for Fangtianxia (acquired for millions of dollars), Jia.com for Qijia (eight-figure acquisition), Xin.com for Uxin (several million acquisition), Mi.com for Xiaomi (acquired for 22.43 million USD), and Mei.com for Meilihui (tens of millions acquisition).

JD Logistics, from its collaboration with Dada in 2017 to its recent 3 billion RMB acquisition of Kuaiyue Express, demonstrates its determination to establish itself as a dominant player in the logistics industry. This acquisition also fills a gap in JD Logistics' road network capacity.

Currently, there are seven publicly listed express delivery companies in China. If JD Logistics acquires the domain kuai.com for the express delivery industry, it is expected to bring significant brand benefits and profits, similar to the impact of its 300 million RMB acquisition of JD.com. The path to JD Logistics becoming the eighth listed company is getting closer.

The flourishing e-commerce industry has ushered in a golden decade for express delivery, and the market size and potential for growth in the industry have expanded rapidly. Besides upgrading operational models and scaling up, owning a valuable domain is a crucial strategy for companies looking to grow and strengthen their presence. Will this acquisition allow JD Logistics to make a breakthrough in the industry? Perhaps all it's missing is an industry-specific domain!