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J&T Express Establishes New Collaboration with Temu

January 12, 2024
in Technology
J&T Express Establishes New Collaboration with Temu
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Chinese logistics service provider J&T Express is currently negotiating a new collaboration with Temu, according to Chinese media outlet Leifeng. The new partnership will see J&T shifting its focus from providing an “end-to-end” full-chain solution to concentrating on last-mile delivery services. The specifics of this new cooperative arrangement are still being discussed.

This development follows J&T’s strategic decision in October 2023 to conclude its small package collaboration with Temu. In a parallel move, J&T established a cross-border company in Singapore, aiming to explore other forms of cooperation with Temu.

Analysts have noted a decline in J&T’s performance on the Temu platform. In May 2023, J&T accounted for 20% of all orders on the platform, with a daily volume of 100,000 orders, placing it at the top. However, by November, J&T had slipped to third place, with the daily order volume falling to less than 100,000.

Chinese media outlets have reported that Temu’s strategy is not limited to J&T. It is segmenting its cooperation with all logistics service providers. This approach aims to eliminate the middle margin, disperse risks, and enhance efficiency, according to representatives from the logistics sector. 

J&T stands to benefit from this shift in strategy. The company’s strength lies in last-mile delivery, and the new focus allows it to capitalize on this advantage. Before Temu launched, J&T had made substantial asset acquisitions in the European and American markets, including overseas warehouses, trucks, and last-mile delivery assets. This enabled J&T to become a member of Temu’s full-chain logistics service providers. 

Industry analysts estimate that J&T has invested at least 800 million RMB in its cooperation with Temu. The change in cooperation is expected to increase J&T’s profits and solidify its valuation.

J&T has undergone a series of internal adjustments to reduce costs and increase efficiency ahead of its successful IPO in Hong Kong. From March 2023, J&T started to scale back its international business, relocating the headquarters of J&T International from Shenzhen to Shanghai, and splitting and independently operating its business in China.

Following these adjustments, J&T has been expanding its local operations in the Middle East and South America to serve platforms like Temu.

SEE ALSO: J&T Express Organizational Restructuring: New Establishment of China Region

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