[Click eStock] "CJ Daehan Tongun, Entering Growth Cycle with Logistics Infrastructure Competitiveness"

Published 22 Mar.2024 08:59(KST)

NH Investment & Securities evaluated on the 22nd that CJ Logistics has entered a growth cycle based on its logistics infrastructure competitiveness.

Analyst Jeong Yeonseung of NH Investment & Securities estimated in a report on the same day that "CJ Logistics' cargo volume for the month of January likely increased by about 5% compared to last year." This figure was estimated based on domestic online shopping transaction amounts. According to recent data from Statistics Korea, online shopping transaction amounts in January reached 20.3 trillion KRW, a 12.1% increase compared to the same period last year. Increased competition among e-commerce platforms has expanded discounts, leading to growth in online consumption and cargo volume.

Analyst Jeong also noted, "The fact that offline-centered companies have started online sales is acting as an opportunity factor for logistics companies," citing Crocs as a key example, which expanded online sales and established an integrated logistics center capable of supporting offline stores and online delivery simultaneously.

He stated, "With the expansion of online sales by offline companies, new orders have increased in CJ Logistics' contract logistics business sector," adding, "The number of fulfillment partners has rapidly increased from 1,000 at the end of last year to over 1,600 recently."

Researcher Jeong viewed that the entry of AliExpress into the domestic market would not pose a significant threat to CJ Logistics and others. He said, "AliExpress plans to participate in competitive bidding for annual logistics contracts," but pointed out, "However, businesses lacking facility capabilities such as logistics centers face limitations in participation."

He continued, "Penalties for delivery delays are also being strengthened, so the possibility of intensified price competition originating from AliExpress is low," and predicted, "CJ Logistics will handle more than half of AliExpress's volume again this year."