360buy to Acquire Logistics Company CCES, Chinese B2C’s Logistics Conundrum

Words have been circulating on Weibo that 360buy, one of the largest Chinese B2C service is poised to acquire Shanghai-based express logistics company CCES. Liu Qiangdong, founder and CEO of 360buy once revealed on Sina Weibo last year that  “there’ll be more than 25,000 new colleagues joining Jing Dong Mall in 2012”. Since then people were speculating that 360buy is acquiring a logistics company in an aim to ramp up its delivery service.

Gong Wenxiang, VP of 360hqb.com, a Shenzhen-based 3C-centric etailer broke the rumor on Sina Weibo, implying that CCES might be 360buy’s acquisition target.

Logistics Conundrum Behind the Ecommerce Prosperity

And 360buy isn’t the only one in China’s ecommerce forefront which is striving to do the same thing. For example, VANCL, the largest Chinese online outlet of apparel set up its own logistics company Rufengda to address problems and enhance customer experience. So does Amazon China, Dangdang, Mecox Lane, Suning and so on.

A survey shows that more than 90% of Chinese B2C companies choose 3rd party logistics companies for goods delivery. And as the growth of ecommerce outpaced the growth of logistics, innumerable problems emerged like “delay in delivery or goods missing from delivery” and the list can goes on and on. So to some extent, Chinese B2C companies had no better choice but to DIY their own shipment effort. The logistics infrastructure in the U.S., by contrast, is so much better.

That’s one of the major causes why from the day the ecommerce fever picking up in China on, a dozen of Chinese B2C companies were considering or have already set up their own logistics arm. Except for the aforementioned examples, some nascent B2C players like OKBuy.com (Zappos-like), Xiu.com (luxury site), Coo8.com (electronics, owned by Gome) and so forth are also committing to the similar effort.

Guo Hongchi, CEO of Chinese B2C site focusing on sportswear Xijie.com once commented that cheap price isn’t the competitive edge in the sector anymore, it is outstanding logistics service that help etailers stand out in the crowded market.