CJ Logistics Smiles at 'Ali'... "Raising Operating Profit Margin This Year"

Full Effort to Increase Operating Profit Margin This Year
AliExpress's Entry into Korea 'Positive Factor'
Strengthening Research and Development Organization

CJ Logistics is benefiting from AliExpress's domestic success. By exclusively handling the company's parcel volume, it is expected to stabilize its operating profit margin in the 4% range this year.

According to industry sources on the 5th, CJ Logistics' management has set improving the operating profit margin as this year's goal. It has hovered around the low 2-3% range, but aims to increase it to over 4%. CEO Kang Shin-ho of CJ Logistics is also reported to have emphasized this direction internally. There is even speculation that the company could approach the 5% operating profit margins of global logistics firms DHL and FedEx.

The biggest positive factor for CJ Logistics this year is AliExpress, which is expanding its business domestically. AliExpress is currently considering establishing a domestic logistics center to provide one-day delivery instead of the current 5-7 day delivery. CJ Logistics increased AliExpress's delivery volume from 3.46 million boxes in Q1 last year to about 12 million boxes in Q4. If a logistics center is built, the proportion of small parcels, which are relatively more profitable, could increase further.

An industry insider explained, "There are many vacant logistics centers that can be utilized without the need for new construction, so it could be completed within a few months, enabling penetration into the Korean market."

CJ Logistics also plans to significantly strengthen the TES Logistics Technology Research Institute, which researches core logistics technologies, through enhancing operating profit margins. While AliExpress's entry is a positive factor that can increase the company's scale, the TES Logistics Technology Research Institute is the source of cost-efficiency technologies.

TES is an acronym derived from the English words Technology, Engineering, and Systems & Solutions, representing the core technologies pursued by CJ Logistics. The TES Logistics Technology Research Institute was launched in 2020, marking the company's direct involvement in technology development. It is an organization that researches technologies and solutions incorporating robotics, artificial intelligence (AI), and big data, which can be exported not only domestically but also overseas. The institute had 150 employees at its inception in 2020 but has nearly doubled in three years. As of the end of last year, 300 personnel were working there, with 33% holding master's or doctoral degrees.

A CJ Logistics official stated, "Along with securing core logistics automation technologies, we reorganized the research institute into groups such as the Data Solutions Group, which strengthens applied technologies needed by each business unit, and the Global Business Division. We already believe there is a technology gap of more than five years compared to competitors and plan to continuously strengthen it."

This content was produced with the assistance of AI translation services.