You Cut My Data Line, I'll Block Your Trucks — China's Brutal "Logistics War": Alibaba vs. SF Express Is On!
Posted on 2017/06/02
Source: https://buzzorange.com/techorange/2017/06/02/shunfeng-vs-cainiao/
Image source: pixabay
"Due to system adjustments at SF Express, tracking results for SF Express waybills may be unavailable or delayed. We apologize for any inconvenience." That day, countless people — like my colleague — received notifications of package anomalies.
On June 1, Cainiao issued a statement regarding SF Express's suspension of its logistics data interface, stating that from midnight to noon that day, SF Express first closed its data interface to Cainiao, and then halted the transmission of logistics information across the entire Taobao platform. Cainiao said the incident came without warning and advised merchants to temporarily suspend SF Express shipments and switch to other courier companies.
SF Express, however, countered that it was not the first to close the data interface — rather, at midnight on June 1, Cainiao had unilaterally suspended the interface information for Fengchao alone. SF Express maintained that behind this "blacklisting" was pressure from Alibaba for SF Express to abandon Tencent Cloud and switch to Alibaba Cloud.
The dispute even alarmed the regulatory authority, the State Post Bureau, which published a notice on its official website stating that it had communicated with senior executives on both sides, "emphasizing the need to put politics first, consider the bigger picture, seek the greatest common denominator in resolving the issue, effectively safeguard market order and the legitimate rights of consumers, and absolutely not allow corporate disputes to produce serious social impact and negative consequences."
As of midnight on June 1, neither Cainiao nor SF Express had made any response to the regulator's call for reconciliation.
SF Express and Cainiao Come to Blows Over "Information Security" — Users Are the Victims
Whether it was SF Express that made the first move or Cainiao that struck first, the conflict between the two has now gone public — and both sides justify their actions in the name of "information security."
Within the current framework of their cooperation, SF Express stated it cannot accept the clause requiring "all Fengchao parcel information to be fed back to Cainiao," as it involves orders from non-Taobao platforms. Cainiao, meanwhile, has been deeply dissatisfied with SF Express and Fengchao's repeated non-cooperation on various grounds.
Cainiao's statement noted that before the incident, Cainiao had been conducting an information security upgrade across its entire network, strengthening multi-layered cross-verification of various logistics data: "Anything can be negotiated, but there can be no compromise on information security — Cainiao will not budge on this point."
In the meantime, on one side were merchants who had shipped goods but had no logistics information, and on the other were users suddenly told they could not track their packages. Tens of thousands of parcels seemed to vanish into thin air. Particularly during the scorching summer, merchants dealing in fresh produce and fruit were even more anxious. Both Cainiao and SF Express merely claimed to put customers first while putting on an innocent face of "there's nothing we can do."
Are the unequal origins and foundations of the courier industry really rooted in Cainiao's data?
When Fengchao officially announced its establishment in June 2015, industry insiders were already joking about the name. Some said it revealed SF Express's ambition to swallow Cainiao — after all, birds always return to the nest. But Cainiao is a big bird, and whether Fengchao could contain it was far from certain.
Just a few days before Fengchao's founding announcement, the inaugural "Cainiao Jianghu Conference" was held with great fanfare at Alibaba's headquarters, marking Cainiao's second anniversary. Seated around Alibaba Group CEO Daniel Zhang and then-Cainiao Network CEO and President Tong Wenhong were the heads of the major courier companies — ZTO Express, STO Express, YTO Express, and Yunda Express — with SF Express conspicuously absent.
At the "2017 Global Smart Logistics Summit" on May 22 this year, SF Express was again absent. Jack Ma's remark that "it doesn't make much difference whether courier companies go public or not" was widely interpreted as a jab at the logistics industry for thinking too small.
Ma said at the summit: "The only thing I feel is, I've become a billionaire of some ranking — that means nothing, and it'll be gone soon." Yet the net worth ranking of SF Express founder Wang Wei was precisely the most prominent keyword in media coverage following SF Express's IPO.
Data has always been Cainiao's core weapon in unifying the logistics landscape. The logistics industry — traditionally built on manpower — was re-evaluated on the Cainiao platform, scored across four tiers, with different project allocations and resource support assigned according to tier.
The scoring system, built on factors such as successful delivery rates, on-time delivery rates, courier ratings, and complaint rates, relies on data at every step.
Cainiao's intelligent logistics backbone network is the foundational infrastructure of Alibaba's e-commerce ecosystem. Warehousing systems, logistics parks, and long-haul logistics routes alone are not enough — leveraging big data to provide supply chain forecasting and allocation services for the logistics system is the key to Alibaba's investment in Cainiao.
"Alibaba will never compete with courier companies for their business." Jack Ma has indeed kept his word — because what he wants to build is a platform for resource reallocation and dispatching, simply extending the logic of integrating Taobao merchants into the logistics industry.
"Big data algorithms will optimize routes for every delivery truck and every courier, fully empowering small and medium-sized logistics companies." Cainiao's 2017 brand strategy represents a further upgrade in the direction of becoming a platform. On this basis, requiring Fengchao to fully open its data comes as no surprise.
Who Would Hand a Weapon to Their Opponent?
Turning logistics companies into channel tools is no easy task for Cainiao.
Just as Taobao merchants also open stores on JD.com, logistics companies do not work exclusively with Cainiao — they actively establish a presence on other platforms as well, in order to guard against the impact of strategic shifts by BAT on their own business. As China's largest private courier company, SF Express has even less reason to settle for being assigned a feudal territory.
Wang Wei himself once dealt with "local warlords" and knows all too well how precarious a passive position can be.
SF Express was founded in 1993, built on the hard labor of dedicated workers answering phones, taking orders, and unloading cargo. In its early days, to rapidly capture market share, SF Express adopted a franchise model in which new outlets were owned by SF Express but operated with independent finances, HR, and management. However, without adequate oversight mechanisms, client resources ended up in the hands of franchise operators, who smuggled in unauthorized goods and disregarded service quality — and every incident tarnished the SF Express brand. After transitioning from a franchise to a direct-operation model, customer satisfaction improved markedly.
Without reclaiming control from its franchise operators, SF Express could never have become the industry leader.
Wang Wei also fully understands the importance of data to the future of the logistics industry: "Delivering packages by brute force is not the ultimate destiny of the courier business — our operational model must gradually shift from physical labor to intellectual capability."
SF Express has invested heavily in automated sorting equipment and data infrastructure. Leveraging high technology to deepen its industry position and reduce costs is one of SF Express's core strategies.
In April this year, Wang Wei told shareholders: "Our competitors will certainly not come from within the industry, but from cross-sector players." The cross-sector rivals he had in mind share three characteristics: powerful technology, control of upstream industry resources, and ownership of vast amounts of data.
He understands Cainiao's strategic position within Alibaba, so rather than competing head-on, he has chosen to compete asymmetrically. In this asymmetric competition, using Tencent Cloud instead of Alibaba Cloud was almost an inevitable choice for Wang Wei.
Yet this time, both Cainiao and SF Express are gambling with the interests of merchants and users. One side invokes information security; the other claims to put customers first. Once "the people's interest" is raised as a banner, it becomes a PR war with no turning back — one side must inevitably be nailed to the wall of shame.
This is not a master-disciple grudge or a marital scandal for bystanders to enjoy and move on. Every user anxiously waiting for their package needs someone to blame — and it will be either Fengchao or Cainiao.