Courier firms from Zhejiang’s Tonglu county provide the logistical backbone for China’s booming e-commerce industry but having crowded out much of the local competition, cracks are beginning to emerge in the Tonglu Gang’s franchisee-based growth model (see WiC355).
This has not been a problem for SF Express, the main rival of the Tonglu companies such as YTO, ZTO and STO. SF Express focuses more on business-to-business deliveries but more importantly the Shenzhen firm also owns its entire courier network. The NASDAQ-listed ZTO, in comparison, has more than 7,000 service centres or branches run by external franchisees.
SF Express’ business model seems to have made it a favourite with investors. The company officially completed a backdoor listing on Shenzhen’s stock exchange last week. The stock climbed the maximum 10% daily limit for four consecutive sessions. As of Tuesday, its market value had reached Rmb280 billion ($40 billion) – making it the biggest Shenzhen-listed firm by market capitalisation.
The successful debut has also made SF Express’ boss Wang Wei (see WiC183 for our first profile of the low key delivery man) China’s third richest man. Thanks to his 65% stake, Wang is worth $26 billion. The news portal Sina Finance says Wang is now even richer than Pony Ma, the chairman of Shenzhen-based internet giant Tencent.
“If SF continues its current bull run, Wang is only five trading days away from overtaking Jack Ma [of Alibaba] and Wang Jianlian [of Wanda] to become China’s richest man,” Sina says.
Hong Kong media reckoned on Wednesday he’d already surpassed Li Ka-shing, the Hongkonger who once ranked as Asia’s richest man.