Core Viewpoint - Jitu has managed to turn a profit in China despite a 7% decline in average order value, highlighting the intense competition in the express delivery market and the challenges faced by other companies in achieving profitability [3][4]. Group 1: Market Dynamics - The express delivery market in China is characterized by fierce competition, with Jitu entering during a period of intense price wars and emerging as a strong player [3][4]. - In 2024, Jitu's delivery volume in China exceeded that of Southeast Asia by 15.2 billion packages, yet its adjusted EBITDA was significantly lower than that of competitors [3][6]. - The express delivery market has seen a massive increase in volume, with 1.745 billion packages delivered in 2024, quadrupling since 2017, indicating ongoing growth potential [12]. Group 2: Profitability Challenges - The profitability of express delivery companies varies significantly, with Jitu's EBITDA at 3.14 billion yuan compared to SF Express's 32.7 billion yuan, illustrating the challenges of maintaining margins in a low-price environment [6][12]. - The market is heavily influenced by e-commerce, with over 80% of express deliveries linked to online retail, which has led to aggressive price competition [8][12]. - The cost structure of express delivery is highly dependent on volume, with costs per package decreasing significantly as daily volumes increase [11]. Group 3: Competitive Landscape - The express delivery sector is divided into two main categories: time-sensitive deliveries dominated by SF Express and e-commerce deliveries primarily handled by the Tongda system [6][8]. - The anticipated consolidation of the market has not materialized as expected, with the number of major players remaining high despite expectations of a reduction [14][16]. - The entry of new players like Jitu has further complicated the competitive landscape, leading to a situation where the market has not stabilized as hoped [16][20]. Group 4: Role of E-commerce - E-commerce platforms like Pinduoduo have significantly influenced the express delivery market, contributing to a substantial increase in order volume and altering competitive dynamics [22][23]. - The dependency of express delivery companies on e-commerce platforms has created a complex relationship, where platforms can exert significant influence over pricing and service standards [23][24]. - Jitu's rapid growth has been facilitated by its strategic partnerships with e-commerce platforms, allowing it to offer competitive pricing and gain market share quickly [22][25].