TTK Express, an established express delivery company, was acquired by Jiangsu Suning Logistics Co., Ltd. (hereinafter referred to as "Suning Logistics"), a subsidiary of Suning.com in 2017, and is now about to change hands again. The new owner is an unknown company - Zhejiang Rongyue Express Co., Ltd. (hereinafter referred to as "Rongyue Express"). Why is Suning Logistics selling TTK Express?

1. Suning Logistics sells TTK Express

On August 27, Suning.com announced that its subsidiary Suning Logistics plans to sell TTK Express. According to the announcement, on August 26, Suning Logistics signed a "Supplementary Agreement to the Equity Transfer Agreement for 70% of TTK Express Co., Ltd." with TTK Express's natural person shareholders. After the transfer, Suning Logistics will hold 100% equity of TTK Express. On the same day, Suning Logistics also signed an equity transfer agreement with Rongyue Express, transferring 100% of the equity and all claims of TTK Express to Rongyue Express for RMB 10 million.

Image source: Weibo screenshot

According to Tianyancha, as of August 28, the controlling shareholder of TTK Express was still Suning Logistics, holding 82.5741% of the shares, while the remaining four natural person shareholders held 15.5555%, 1.2596%, 0.4072%, and 0.2036% respectively. After the two transfers are completed, Suning Logistics will no longer be the majority shareholder of TTK Express, and Rongyue Express will hold 100% of the equity of TTK Express. At the same time, several companies invested by TTK Express in industries such as transportation, warehousing, postal services, and wholesale and retail will also fall under the control of Rongyue Express.

Image source: Tianyancha

It is worth noting that Suning Logistics initially acquired TTK Express in two installments for RMB 4.25 billion, but now it is selling it for only RMB 10 million. Why is Suning Logistics making such a "loss-making deal"?

2. Why is Suning Logistics selling?

Founded in 1994, TTK Express was once one of the older companies in the industry. However, after "selling" to Hainan Airlines, merging with STO Express, and terminating cooperation with JD.com, TTK Express gradually fell behind other express logistics companies. At this point, Suning Logistics, which wanted to strengthen its last-mile delivery capabilities, targeted TTK Express. Compared to companies like SF Express and the "Tongda Series" in the first tier, TTK Express, with its declining reputation, was less competitive, making "selling" a good option.

However, after being controlled by Suning Logistics, TTK Express did not see a turnaround. Public data shows that from 2017 to 2023, TTK Express generated a cumulative revenue of nearly RMB 8 billion, but its losses also expanded, exceeding RMB 7.5 billion. Nowadays, some netizens still have the impression that TTK Express has a "terrible attitude," while others have never even heard of TTK Express.

Image source: Xiaohongshu

On the other hand, Suning.com, the parent company of Suning Logistics, is also facing significant challenges. According to financial reports, Suning.com began to incur losses in 2020, with losses peaking at RMB 43.265 billion in 2021. By 2023, it not only failed to shake off its losses but also saw its total revenue drop from RMB 269.229 billion in 2019 to RMB 6.627 billion. Additionally, due to negative net profits after deducting non-recurring gains and losses for the past three fiscal years and uncertainties regarding the company's ability to continue operations, as reported in the audit report for the most recent fiscal year, Suning.com's stock ticker changed from "Suning.com" to "ST Easyhome" in 2022, facing the risk of delisting. In response, Suning initiated a "self-rescue" mode, closing unprofitable stores, reducing marketing expenses, and focusing on core businesses. In this context, it is not surprising that Suning Logistics chose to sell TTK Express.

3. Why is Rongyue Express buying?

According to Tianyancha, Rongyue Express was established in 2024 with a registered capital of RMB 500 million. Its business scope includes road cargo transportation, international road cargo transportation, mail delivery services, and urban distribution transportation services. Notably, Wu Qiushi, who holds a 99.9% stake, is not only the legal representative and controlling shareholder of Rongyue Express but also the former legal representative, shareholder, and executive of Shenyang Nezha Express Co., Ltd. This suggests that Rongyue Express is not truly a novice in the industry.

Image source: Tianyancha

Recently, it was reported that Rongyue Express held an in-depth exchange symposium during its preparatory stage. During the meeting, Rongyue Express stated its commitment to becoming a leading global intelligent logistics service provider. However, Rongyue Express, which aimed to establish a network, "disappeared" for a while due to the lack of a courier business license. Therefore, some believe that Rongyue Express's acquisition of TTK Express from Suning Logistics may be an attempt to obtain a courier business license.

Image source: Can Stock Photo

But will Rongyue Express, armed with a courier business license, be able to thrive in the industry? According to data from the State Post Bureau, China's express delivery revenue reached RMB 1.2 trillion in 2023, an increase of 14.5% year-on-year, setting a new record. As of August 13, the domestic express delivery volume this year surpassed 100 billion parcels, 71 days earlier than last year, indicating the rapid development of the domestic express delivery industry. Meanwhile, as the express delivery industry has become more concentrated in recent years and leading express delivery companies have entered the capital market, competition in the domestic express delivery industry has intensified. According to media reports, ZTO Express, Yunda Express, YTO Express, J&T Express, STO Express, and SF Express collectively account for nearly 90% of the domestic express delivery market, a figure that continues to rise.

Whether it's TTK Express, which has been dormant for a long time, or Rongyue Express, which has ambitions, their advantages compared to leading companies in the industry do not seem to be very obvious. We will wait and see how Rongyue Express, which has acquired TTK Express, will perform next. What do you think of Suning Logistics selling TTK Express? Feel free to leave your comments below for discussion.