4PX Express has grown into China’s biggest cross border ecommerce platform, reports Singapore Straits Times.
The logistics platform helps merchants such as AliExpress, TaoBao, eBay and Newegg to get their goods delivered to customers across the world.
In terms of scale, 4PX is twice the size of the #2 and #3 players in China combined.
As China’s ecommerce boom spreads to other parts of the world, outbound volumes have spiked over the last two years, with 4PX founder Kevin Li predicting that the market will grow at least 80% each year for the next few years.
Approximately 40% of shipments handled by 4PX are bound for shoppers in the United States, Russia and followed by Brazil. Shoppers in the UK, Germany, Spain and France count for another 40-45% of overseas shipments.
As Li puts bluntly, “the world economy is not good, but foreigners like online shopping.”
4PX turns an annual profit of approximately $101.1 million (50 million yuan) and employs 3,500 people across 50 centers in China and 17 overseas.
As the items sold by Chinese sellers grow in value, the company plans to expand its network of overseas warehouses, where sellers’ inventory is sorted, packed, consolidated and shipped out. It also aims to be the biggest Chinese employer in the Czech Republic, with a promise to add 600 jobs over five years as it serves Western Europe with a warehouse there.
4PX’s big name investors
The company closed its latest investment round last month, with Alibaba’s logistics arm Cainiao injecting an undisclosed sum into the firm for a 15% stake.
SingPost is an early investor, with roughly 30% share in the company. The partnership goes back to 2008, when 4PX first identified opportunities in cross border ecommerce. During that time, online sales were booming, but the parcel service industry lagged behind.
The sellers were new, they didn’t know how to sell and choose a logistics company. DHL and FedEx did professional fulfillment but were focused on the business-to-business segment. – Kevin Li, Founder of 4PX Express
From that, 4PX started to build a complete product line for parcel services, and SingPost became its first postal partner outside of China. Small parcels from China would be routed to Singapore and sent out to various countries across the world from there.
Li expects his company’s margins to fall as the ecommerce sector matures, but this shouldn’t be a cause for concern. “We are an integrator of different firms’ solutions. We exist because of our technology”.
A version of this appeared in The Straits Times on August 14. Read the full version here.