SF Express SWOT and PESTLE Analysis

Strength

1. Very well-developed aviation and ground network: SF Airlines was the first privately owned air-freight company in China. It is currently China’s largest air-freight service, reaching over seventy cities across Asia and Europe. It has 75 cargo aircrafts, 2110 commercial and chartered routes and on an average makes 3473 flights daily. Since 2009, it has transported approximately 1.67 million tons of cargo and accounts for 34% of the total domestic cargo and mail traffic volume. SF Express also has an extensive ground network that covers 335 prefecture level cities with approximately 19,000 directly operated service points. The international express covers 78 countries while the international small parcel business covers over 180 countries and regions abroad. The company also has over 58,000 directly operated and outsourced vehicles operating in over 130,000 branch routes. Therefore, their elaborate network is a tremendous asset in maintaining their position as one of the top logistics companies worldwide.

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Weakness

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Opportunity

1. Plans to acquire majority stake in Kerry Logistics will exponentially increase capacity: SF Express has announced plans to acquire a majority stake (approximately 51.8%) in Hong Kong based Kerry Logistics for $2.3 billion. Kerry Logistics is expected to become the international arm of SF as it has an extensive south-east Asian network and considerable expertise in Europe tradelines. Once combined the company will be a dominant logistics provider across Asia. With a presence in over 59 countries and 52 million square feet of warehouse space, Kerry Logistics generated over $5 billion in revenue in 2019 and is the largest logistics company in the Hong Kong Stock Exchange. Since SF’s airline service is the largest air cargo service in China and Kerry Logistics is the preferred cargo partner of rapidly growing industries such as consumer goods, electronics and fashion; the deal will strategically create the most extensive warehousing network in China.

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. China aiming for ‘green transformation’ of its economy: According to data from the Plastics Recycling Committee of China Plastics Processing Industry Association, China’s express delivery sector is estimated to consume nearly 1.8 million plastic packaging annually, making up nearly half of the country's consumption of plastic bags in 2019. In December 2020, eight departments of the central government including the National Development and Reform Commission and the State Post Bureau, published new guidelines setting unified standards for green packaging to ensure compliance by industry players.