(Yicai Global) Aug. 30 -- 58 Express Co., the logistics arm of 58.com Inc. [NYSE:WUBA] -- China's Craigslist -- has paired with GoGoVan's Shenzhen branch to infiltrate intra-city courier service markets overseas.
58 Daojia, a subsidiary of 58.com Inc., will merge its courier business with intra-city courier and logistics platform GoGoVan, with 58 Daojia to hold the major stake in the joint venture, Jiemian News reported, but without stating the deal's price.
The two parties will keep their own brands after the merger. GoGoVan will deploy in promotions abroad, and 58 Express domestically. Chen Xiaohua, chief executive of 58 Daojia, will serve as the joint venture's chairman, while Lin Kaiyuan, founder and ex-chief executive of Kuaigou Express (Kuaigou.co), will act as chief executive officer, 58 Express said.
58 Express' customers are mostly individuals and small businesses, while GoGoVan mainly targets company clients. 58 Express will also serve corporates post-merger, Chen noted, adding the firm will expand its business operations to encompass 300 prefecture-level cities by shifting away from household-oriented services toward the bigger logistics market, and the new company will also penetrate Southeast Asian markets in future.
GoGoVan formed in Hong Kong in July 2013, and has since established itself as a leading intra-city freight and logistics service provider in Asia. It now has more than 180,000 registered drivers in 14 cities across six Asian countries and regions. Kuaigou Express is the mainland version of GoGoVan, operated by GoGoVan's Shenzhen branch.
Intra-city delivery, also known as 'last leg 'or the 'last-kilometer delivery,' refers to short-distance point-to-point transport of goods -- typically large-quantity and large-sized goods -- within a city.
The intra-city courier business represents a huge, but underdeveloped market, whose volume is about USD3.7 billion to USD4.48 billion (CNY25 billion to CNY30 billion) in Beijing alone, Hong Kong-based consultancy IiMedia Research estimates. Traditional intra-city delivery services suffer serious drawbacks, such as inefficient information transmission, lack of pricing transparency and insecurity among both customers and drivers.
58 Daojia is an internet-based home delivery service developed by 58.com with an investment USD300 million, and 58 Express is its core business. The intra-city delivery company now has more than one million registered drivers across over 100 mainland cities.
Incorporated in 2005, Beijing 58 Information Technology Co. is the owner of 58.com Inc. Listing in New York in 2013, it has become one of China's largest online marketplaces serving local businesses and consumers.