Good day, welcome to the ZTO Express Third Quarter Financial Results Conference Call. All participants will be in a listen only mode. Should you need assistance, please signal conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions.
To ask a question you may press star then one on a touchtone phone. To withdraw your question, please press star then two. In the interest of time, please limit yourself to two questions. Please note this event is being recorded. I would now like to turn the conference over to Sophie Li, Director of Capital Markets. Please go ahead.
Thank you, operator. Hello, everyone. Thank you for joining us today. The company's results and the investor relations presentation were released earlier today and are available on the company's IR website ir.zto.com. On the call today from ZTO Express are Mr. Meisong Lai, Chairman and Chief Executive Officer, Mrs. Huiping Yan, Chief Financial Officer.
Mr. Lai will give a brief overview of the company's business operations and highlights. Ms. Yan will go through the financials and guidance. They will both be available to answer your questions during the Q&A session that follows. I remind you that this call may contain forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such statements are based on management's current expectations and current market and operating conditions that are related to e-events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements.
For further information regarding this and other risks, uncertainties and factors is included in the company's filings with the US Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under law.
It is now my pleasure to introduce Mr. Meisong Lai. Mr. Lai will read through his prepared remarks in their entirety in Chinese before I translate for him in English. Mason, please.
大 家 好 ， 感 谢 各 位 参 加 今 天 的 电 话 会 议 。 二 零 二 二 年 三 季 度 ， 中 通 业 务 量 达 到 六 十 三 点 七 亿 件 ， 同 比 增 长 百 分 之 十 一 点 七 ， 市 场 份 额 比 去 年 同 期 提 升 一 点 三 个 百 分 点 ， 达 到 了 二 十 二 点 一 。 我 们 的 公 众 满 意 度 得 分 再 创 新 高 ， 全 链 路 时 效 和 七 十 二 小 时 准 时 率 继 续 名 列 行 业 前 茅 。
同 时 我 们 实 现 了 十 八 点 七 亿 元 的 调 整 后 净 利 润 ， 同 比 增 长 了 百 分 之 六 十 三 点 一 。 三 季 度 因 疫 情 等 因 素 影 响 ， 快 递 行 业 整 体 增 速 放 缓 。 中 通 专 注 做 好 自 己 ， 通 过 持 续 深 化 的 精 细 化 管 理 和 数 字 化 运 营 ， 不 断 提 升 经 营 质 量 ， 为 持 续 发 展 认 识 切 期 爆 发 储 备 能 力 和 条 件 。
在 保 障 常 态 化 疫 情 防 控 的 同 时 ， 延 续 了 前 两 个 季 度 量 价 双 收 的 业 绩 ， 尤 其 在 市 场 份 额 、 服 务 质 量 和 盈 利 水 平 上 进 一 步 与 同 行 拉 开 差 距 。 过 去 几 个 季 度 ， 我 们 在 提 升 平 台 运 营 质 量 和 盈 利 能 力 方 面 取 得 了 明 显 的 成 效 。
一 、 我 们 通 过 对 直 营 市 场 部 客 户 分 层 的 梳 理 以 及 相 应 网 络 政 策 的 调 整 ， 清 除 了 一 些 不 健 康 的 流 量 ， 同 时 以 公 平 透 明 的 政 策 提 升 了 网 点 的 市 场 竞 争 力 。 二 、 量 本 利 报 表 数 据 的 视 觉 和 管 理 工 具 的 沉 淀 ， 在 流 向 线 路 层 面 提 供 了 能 见 度 和 抓 手 ， 使 我 们 能 够 有 效 避 免 大 包 大 揽 ， 提 高 决 策 的 精 准 度 ， 更 好 地 平 衡 了 成 本 与 加 价 的 合 理 关 系 。
三 、 进 一 步 规 范 操 作 标 准 ， 不 断 优 化 考 核 指 标 和 持 续 提 升 数 字 化 能 力 ， 让 我 们 对 全 运 过 程 分 段 数 据 的 跟 踪 和 分 析 更 加 准 确 ， 从 而 更 加 合 理 地 优 化 了 排 班 ， 更 加 及 时 地 调 整 运 油 ， 更 加 有 效 地 提 升 人 均 效 能 和 设 备 运 力 的 使 用 效 率 。 在 不 断 提 升 时 效 的 同 时 ， 减 少 问 题 线 的 产 生 ， 提 高 整 体 运 营 质 量 。
在 优 化 自 身 的 同 时 ， 我 们 也 一 如 既 往 地 关 注 和 赋 能 加 盟 合 作 伙 伴 分 核 能 力 的 提 升 ， 由 此 激 发 市 场 份 额 的 扩 大 。 一 、 我 们 把 量 本 利 的 工 作 逐 步 延 伸 到 网 点 ， 及 时 向 网 点 推 送 与 他 自 身 经 营 切 切 相 关 的 数 据 ， 鼓 励 和 协 助 网 点 学 会 算 账 ， 从 细 节 入 手 ， 帮 助 低 负 增 长 网 点 发 现 问 题 ， 解 决 问 题 ， 提 高 市 场 竞 争 力 。
二 、 我 们 进 一 步 简 化 了 揽 派 单 的 收 费 政 策 ， 在 落 实 政 策 公 平 、 普 惠 、 透 明 的 同 时 ， 通 过 揽 派 两 端 利 益 调 配 机 制 和 进 一 步 平 衡 。深 度 挖 掘 网 点 的 增 量 潜 力 ， 有 效 的 提 升 加 盟 网 点 的 获 客 能 力 与 效 率 水 平 。
对 收 转 运 派 全 链 路 服 务 质 量 的 把 控 是 实 现 市 场 份 额 扩 大 和 利 润 增 长 的 先 决 条 件 。 过 去 几 个 季 度 ， 我 们 持 续 细 化 服 务 质 量 考 核 指 标 和 奖 罚 机 制 ， 通 过 全 网 各 环 节 的 有 效 联 动 ， 从 源 头 上 切 实 解 决 服 务 质 量 的 问 题 。
三 季 度 ， 菜 鸟 指 数 的 分 子 与 同 行 拉 ， 拉 大 了 差 距 ， 切 实 提 升 了 品 牌 形 象 和 服 务 口 碑 。 四 季 度 以 来 ， 外 ， 外 部 环 境 和 疫 情 持 续 带 来 负 面 影 响 ， 大 众 消 费 低 于 预 期 ， 行 业 增 长 承 受 压 力 。 我 们 将 继 续 围 绕 加 速 扩 大 市 场 份 额 ， 实 现 高 质 量 发 展 的 目 标 来 推 进 以 下 指 向 核 心 工 作 。
第 一 ， 严 格 落 实 安 全 生 产 责 任 制 ， 强 化 疫 情 防 控 要 求 的 执 行 ， 保 障 基 地 渠 道 安 全 畅 通 ， 严 防 重 大 事 故 发 生 。 第 二 ， 有 序 拓 展 网 络 基 础 建 设 ， 提 高 整 体 链 路 转 运 效 能 ， 帮 助 网 点 附 属 产 能 ， 进 一 步 提 升 揽 派 能 力 。
第 三 ， 深 化 网 络 势 力 与 赋 能 ， 推 进 末 端 政 策 到 小 到 天 ， 保 证 网 点 积 极 利 益 的 同 时 ， 把 市 场 一 手 价 格 落 实 到 业 务 员 手 里 ， 激 发 全 单 货 客 的 内 生 动 力 。 第 四 ， 加 快 高 品 终 末 端 建 设 ， 打 造 门 店 存 链 和 派 送 以 及 社 区 服 务 的 综 合 能 力 。
在 降 低 揽 派 成 本 的 同 时 ， 丰 富 到 店 到 家 的 多 样 化 末 端 服 务 。 第 五 ， 推 进 生 态 多 元 化 产 品 设 计 和 推 广 。 从 规 模 化 、 差 异 化 、 品 质 化 方 面 聚 焦 核 心 优 势 的 发 挥 ， 进 一 步 打 造 类 似 标 配 等 产 品 ， 服 务 满 足 个 性 化 的 消 费 需 求 。
展 望 未 来 ， 快 递 行 业 的 前 景 依 然 广 阔 ， 格 局 变 动 和 分 化 的 趋 势 绝 不 迷 茫 。 中 通 具 备 多 年 沉 淀 的 重 建 共 好 ， 重 建 共 享 的 文 化 ， 勇 于 开 拓 创 新 的 基 因 ， 网 络 稳 健 且 规 模 大 ， 效 能 高 ， 加 上 精 细 化 管 理 的 不 断 升 级 与 兵 兵 子 色 的 工 作 作 风 。
中 通 有 信 心 和 能 力 实 现 市 场 份 额 加 速 扩 大 的 核 心 目 标 ， 并 保 持 服 务 质 量 和 盈 利 水 平 的 持 续 提 升 ， 迎 接 日 进 时 代 的 到 来 。 谢 谢 。
Hello everyone, thank you for joining us today. For the third quarter of 2022, ZTO delivered a total volume of 6.37 billion, which increased 11.7% year-over-year, extending our market share by 1.3 percentage points to 22.1%. For customers satisfaction scores with a new record and our end-to-end competitiveness and 72-hour time definitiveness continuing to rank top among the years.
Meanwhile, we achieved CNY 1.87 billion of adjusted net income, growing our bottom line by 63.1% year-over-year. In the third quarter, due to pandemic and other external factors, the overall growth rate of the express industry decelerated. ZTO focused on being the best we can through wider implementation of detail-oriented and data-driven process management and solutions.
Not only did we enhance operational excellence, but also build readiness to realize optimistic as well as the systemic growth answers. While ensuring the normalized pandemic preventions and control, ZTO was able to lean on both volume and price for the third competitive quarter, and further widen the lead over our peers in the market share, service quality and profitability.
Over the past few quarters, we have achieved remarkable results in improving the operational excellence and earnings quality. First of all, by combing through KA customer accounts and modifying corresponding network policy, we eliminated unnecessary loss-making contracts, and at the same time enhanced the competitiveness of our outlets.
Second, with further refinement and a wider utilization of our daily volume cost profit dashboard tools within the visibility at the parcel flow level, which allowed us to recalibrate cost recovery and pricing positions, therefore reduce gross flow of the business.
With further standardization of operating protocols, refined KPIs, and optimizing digitization capabilities, we can now track and analyze transit and sorting process by segments with improved accuracy, therefore, improve e-effectiveness of work shift design. We resolve transit more timely, increase utilization of labor, facilities, and transportation resources. Reduce failure packages and improve end-to-end timeliness.
The overall operational quality and efficiency was enhanced. While optimizing our own operations, we continue to focus on empowering our network partners to improve their comprehensive capabilities thus stimulating market share needs. We have gradually extended our value cost to profit in aid to network partners.
We pushed the real-time data to always encourage and assist them to optimize and raise financial results, help always with low and negative growth to identify and resolve problems from bottom up, and ultimately improve their market competitiveness.
We further simplified partner fee policies and made them more equitable, transparent, and uniform. We tapped into the incremental market share potential through interest alignment and resource sharing amongst pickup and delivery hours, and effectively increased customer acquisition and total profit at both marketing and fulfillment centers.
Ensuring the service quality throughout all stages of pickup, transportation, and delivery is a key condition for expanding market share and increasing profits.In the previous quarters, we have continuously refined CTIs and improved the rewards and the ranking mechanism, and tackled root causes of problems in a timely manner with integrated efforts from all segments of the entire network.
In the third quarter, our leading Cainiao Index scores widened among peers, which effectively enhanced our brand recognition and service reputation. Fourth quarter thus far, the external factors, including pandemic situation, continued to present significant negative impact.
Consumption level was lower than expectation, and express industry growth was under pressure. However, we have been continually focusing on the following priorities around our primary goal of accelerating market share expansion, supported by the following high-quality focus.
First of all, strict accountability for operational safety, pandemic prevention, and control to ensure the smooth flow of packages. Second, enhancement of network infrastructure capability in an orderly manner, particularly helping the owners to plan and establish pickup and delivery stations which are instinctive to the entire transit and sorting platform.
Third, further implementation of network management tools, including those of last mile policies, which without compromising the vested interest of the outlet owners, ensure the courier's direct access to market pricing mechanisms and to incentivize to acquire new retail customers.
Fourth, accelerated expansion of quality preference with diversified capabilities at the last mile post. To go beyond reducing pickup and delivery costs and provide community services in addition to on-demand delivery to doors. Enrich last mile customer experience in store and to home.
Fifth, designing and promotion of eco-diversified products and services which rely on our differentiated scale and the quality advantage. For example, standard time-definite service to meet customized needs. Looking ahead, the growth prospects of China's express delivery industry remains positive.
The divergence of key players has gradually become obvious and clear. For the past 20 years, we still have built and relied on its shared success culture, innovative DNA, its network with stability, and its unsurpassed scale and efficiency to stand apart from the rest.
Coupled with increasing effort on management upgrade and rigorous work ethics and tenacity, we are confident to achieve our primary goal of accelerated market share expansion with improving service quality and profitability to our share in daily parcel volume that will exceed 100 million. Let's have our CFO, Ms. Yan, to take us through our financial results.
Thank you, Chairman Lai. Hello to everyone on the call. As I go through our financials, please note that unless specifically mentioned, all numbers quoted are in RMB, percentage changes refer to year-over-year comparisons. Detailed analysis of our financial performance, unit economics, and cash flow are posted on our website.
I'll go through some of the highlights here. In the first quarter, despite the recurrence of pandemic shutdowns or restrictions and a weaker-than-expected economic outcome, ZTO delivered strong performances in both market share gain and profit expansion, both supported by improving quality of services.
Parcel volume increased 11.7%, which helped to expand our market share by 1.3 points to reach 22.1%. The adjusted net income grew 63.1% to CNY 1.9 billion. Total revenue increased by 21% to CNY 8.9 billion.
ASP for the core express delivery business increased 9.9% or CNY 0.12. While pricing became more stabilized, we continue to optimize our policy effectiveness by enhancing volume mix, as well as helping our network partners and outlets to strengthen their competitiveness and profitability.
Total cost of revenue was CNY 6.5 billion, which increased 11.6%. Overall, unit cost of revenue for the core express delivery business increased 12.6% or CNY 0.01. More specifically, line haul transportation cost per parcel decreased 2.2% to CNY 0.49, where rising fuel costs were offset by cost efficiency gain from increased use of high capacity trailer trucks, improved load rate, and better route planning.
Unit sorting cost increased 5.8% to CNY 0.30, driven by increased labor costs and higher depreciation and amortization charges. We continue to raise our level of automation in response to increasing human resource costs. Gross profit increased 55.9% to CNY 2.4 billion, benefited from both volume and ASP increases on top of meaningful cost efficiency, despite lower than expected volume.
Gross profit margin rate increased 6.1 points to 27.3%. SG&A expenses as a percentage of revenue dropped 0.3 points to 4.9%, demonstrating continued scale leverage by our corporate cost structure. Income from operations increased 59.9% to CNY 2.2 billion, and associated margin rate grew 5.9 points to 24.3%. Operating cash flow grew 58% to CNY 2.8 billion, while capital expenditure totaled CNY 2.1 billion.
We are hopeful that COVID restrictions would gradually ease off and macroeconomic condition would improve in 2023. We believe that China's express delivery industry has great potential to grow for the longer term, and ZTO would remain a strategic focus on market share gain upon achievement of targeted profit levels.
All of these will be made possible through continued effort on standardization and digitization, where data analytics and process improvements will lead to further upgrade of our leading operating efficiency and quality of earnings. Taking into account the current market condition, the company revises its previously stated annual guidance. Parcel volume for 2022 is expected to be in the range of CNY 24.3 billion to CNY 24.7 billion, representing a 9%-11% increase year-over-year.
Meanwhile, the company remains confident in achieving no less than 1 percentage point increase in its market share for the entire year of 2022. These estimates represent our current view, which are subject to change. This concludes our prepared remarks. Operator, please open the call for questions. Thank you.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.
In the interest of time, please limit yourself to two questions. At this time, we will pause momentarily to assemble our roster. Our first question will come from Ronald Keung with Goldman Sachs. Please go ahead.
Thank you. Thank you management. Just I have two questions. One is want to hear about how the recent COVID new cases, how has that disrupted our business, and how are we ensuring growth and also good service quality in the times of site disruptions and outputs and some of our operations?
Second, we'd like to hear management's view on how the next year, 2023, will play out because on both parcel volume growth and also pricing and knowing that the price hike for the industry started in September last year, and the whole industry has gone through a very healthy uplift in profitability. So as we lapse the price hike around three to four quarters now, how are we thinking about pricing into next year? Thank you.
对 疫 情 呢 ， 我 们 就 是 一 手 抓 防 疫 ， 把 这 个 疫 情 要 防 住 ， 然 后 生 产 要 发 展 ， 就 是 两 手 都 在 抓 。 影 响 呢 有 一 点 。 我 们 认 为 ， 这 个 政 府 二 十 条 以 后 呢 ， 其 实 ， 这 个 市 场 应 该 是 向 好 的 方 向 在 发 展 。
我 们 对 我 们 自 己 的 发 展 呢 ， 还 是 有 信 心 的 。 在 2023 年 这 个 增 长 跟 价 格 。 预 期 呢 ， 全 国 疫 情 这 个 疫 情 的 政 策 就 会 更 加 精 准 。 这 个 居 民 消 费 被 窝 留 的 信 心 呢 ， 会 恢 复 。 同 时 呢 ， 今 年 这 个 基 数 比 较 低 ， 因 为 今 年 整 个 行 业 个 位 数 增 长 ， 所 以 我 们 预 期 呢 行 业 需 求 有 望 迎 来 反 弹 。
明 年 的 价 格 战 问 题 ， 我 们 认 为 价 格 战 呢 这 个 可 能 性 不 大 。 第 一 个 呢 ， 是 在 监 管 环 境 下 ， 快 递 行 业 持 续 向 高 质 量 发 展 转 型 ， 就 是 高 数 量 向 高 质 量 转 型 。 快 递 企 业 战 略 上 呢 也 更 加 注 重 长 期 有 序 的 发 展 。
第 二 个 就 是 行 业 增 速 放 缓 ， 市 场 增 量 变 缓 。 过 去 不 计 成 本 ， 以 价 换 量 的 这 个 方 式 呢 ， 将 会 付 出 更 多 的 代 价 ， 并 很 难 持 续 用 。 第 三 个 油 价 人 工 成 本 高 位 。 全 国 疫 情 动 态 防 控 的 情 况 下 ， 末 端 经 营 压 力 呢 ， 也 是 明 显 增 加 。
总 体 来 看 呢 ， 在 行 业 增 速 趋 稳 及 疫 情 动 态 防 控 的 情 况 下 ， 快 递 市 场 正 切 换 到 价 格 战 的 新 赛 道 。 所 以 从 价 格 战 点 下 价 格 战 。 具 有 稳 定 的 网 络 ， 灵 活 的 资 源 调 配 能 力 ， 服 务 领 先 的 这 个 质 量 领 先 的 企 业 ， 强 劲 的 抗 风 险 能 力 的 企 业 呢 ， 将 具 备 竞 争 优 势 。
这 和 过 往 几 年 的 资 本 投 入 情 况 ， 各 家 在 网 络 质 壁 上 的 差 异 全 部 显 现 出 来 ， 盈 利 能 力 开 始 加 速 分 化 。 未 来 行 业 呢 ， 也 将 这 个 强 者 越 强 的 局 面 呢 ， 将 更 加 显 现 。 我 们 认 为 明 年 呢 ， 总 体 来 讲 ， 对 中 通 来 讲 ， 我 们 认 为 机 遇 是 大 于 挑 战 。 谢 谢 。
Thank you Ronald for your question. Let me translate for the Chairman. First of all, the impact of the pandemic and specifically those prevention and restriction measurements certainly has a negative impact on our business. We, on one hand, focused on the prevention, and on the other hand, continued our growth focus.
We believe that after the major congress meetings, policies will gradual, even though it is gradual, but will certainly come about to stimulate economy and continue to raise consumers confidence in supply chain, resuming its efficiency as well as logistics businesses, particularly express businesses.
For next year, we are looking at a low comp, and we are hopeful that the business will continue to focus on quality of growth and the economic rebound will again provide greater opportunities for us.
For 2023, we think the likelihood of previously experienced fierce competition is low, as everyone starting to focus more gradually on quality of operations and as well as what we have seen, the government's conviction in regulating competitive environment, ensuring healthy, competitive dynamics taking place.
The industry growth had slowed down. The increase in volume in next year will be the target of everybody's focus in terms of growth, because the installed base is there. What we are doing and again, is what we have been doing, is laying the foundation of operational efficiency as well as quality of earnings, not only to ourselves, but to our network partners in that extent that they are ready and they are prepared as well in seizing the opportunity that will arise.
Overall view is that in general, as the policy continue to ease and relax, the economic operations will begin to tend to normal. In that sense, our focus will continue to highlight our strength, focusing on quality of services. As we reach our profit target, we will further our primary goal of expanding market share.
What we have seen in the past, the divergence of the marketplace is clear. The stronger will become stronger and the profitability will provide even further support for accelerated growth. The winner will eventually be those who are well prepared, who has the capability of being their best. Time will tell.
Time will certainly support our longer term view that the industry growth has its potential and the winners will take what it deserves.
Thank you. That's very useful.
Our next question will come from Lu Yuanyuan with Citi. Please go ahead.
Hey, Meisong Lai. Hi, next question will come from Lu Yu with Citi. Please go ahead.
Let me help translate. The oil price hike in the third quarter, the impact on our total cost per parcel is about CNY 0.03. As we all know that the domestic oil price increased by about 30% and the global prices is somewhere around 25%-30%. We have still a CNY 0.01 improvement on the per parcel transportation costs.
It means that we have received benefit from the efficiency of transportation operations with larger capacity trailer trucks, route planning, and improvement of load rate. Now, on the sorting cost per parcel, it increased CNY 0.01 year-over-year. We have seen lower than expected volume as we have a proportionately higher fixed cost. Specifically, we have our own personnel in our sorting facility.
The scale leverage is diminished in that sense when volume is lower than expectation. Another factor impacting the sortation cost per parcel is the increased depreciation and amortization from new hubs and new equipment installation into putting in operation. Going forward in the near term, well, we will continue to benefit from our digitization and operational excellence improvement.
Route planning, shift designing, total end-to-end coordination. All these will help us reduce per unit cost. In the longer term, as we have mentioned in the past, as we achieve our goal of expanding market share, more volume coming into our network, then we are able to realize even further cost productivity and efficiencies as our routes become more direct, as our number of sortation comes down.
In other words, more and more of the parcel, greater portion of our parcel will only go through sorting once or even zero sorting. That will significantly reduce the per unit cost even further. I hope these answers your question. As far as capital investment, we will continue to monitor macroeconomic conditions.
We will continue to recalibrate our plan of investment. Although we do believe that the peak investment period is been in the past, we've already gone past that, because majority of our sorting hub and super sorting hubs have been established and the ongoing CapEx expenditures with a bigger portion of that would go towards some of those upgrades.
Most of our infrastructure construction is already in place. We do believe that the CapEx spending will be tapered off or held steady. Thank you.
Our next question will come from Frank Yip with Daiwa Capital Markets. Please go ahead.
Let me translate for my question is. I got two questions. First, related to the pandemic outbreak. Is that during the QGD very quickly with partial volume growth, is this mainly coming from the pandemic disruption, or is mainly related to the with consumer expenditure?
If we excluding for those pandemic disruption for the next year, what kind of growth that we are targeting for? My second question is regarding to the divergence of profitability amongst the peers. What is the key reason or the key factors that we have a better performance than the others?
你 好 ， first 个 问 题 就 是 增 速 放 缓 ， 这 个 我 们 认 为 疫 情 影 响 是 占 大 部 分 的 。 second 个 ， 明 年 大 概 率 我 们 认 为 ， 这 个 大 概 率 快 递 的 增 长 会 达 到 双 位 数 ， 因 为 今 年 呢 基 数 低 ， 如 果 明 年 疫 情 有 好 转 ， 其 实 双 位 数 增 长 我 们 认 为 是 有 可 能 的 。
利 润 分 化 呢 ， 其 实 已 经 是 越 来 越 明 显 ， 其 实 今 年 first three quarters 去 看 ， 就 是 这 个 行 业 利 润 分 化 的 程 度 是 在 加 剧 的 。 具 体 的 原 因 呢 ， 是 因 为 每 家 的 服 务 的 品 质 不 一 样 ， 所 以 服 务 品 质 好 的 ， 他 前 端 溢 价 就 更 多 ， 也 是 像 中通 ， 这 个 有 一 定 的 影 响 。
Second 个 呢 ， 就 是 把 整 个 链 路 的 ， 这 个 转 运 的 成 本 跟 时 效 ， 这 个 方 面 呢 ， 也 是 有 影 响 。 中通 的 优 势 ， 非 常 有 利 于 其 市 场 份 额 、 盈 利 能 力 跟 服 务 质 量 的 均 衡 发 展 。 我 们 既 在 ， 总 部 一 定 利 润 的 同 时 ， 还 保 障 -
其 实 我 们 的 加 盟 商 ， 啊 我 们 的 这 个 完 结 的 ， 利 润 的 ， 啊 这 个 持 续 的 增 长 。 所 以 呃 ， 我 们 非 常 有 信 心 ， 就 是 这 个 啊 ， 呃 ， 中 通 还 会 继 续 保 持 ， 就 是 市 场 份 额 、 盈 利 能 力 跟 服 务 质 量 的 稳 步 提 升 。 谢 谢 。
To your first question, the majority of the slowdown comes from the pandemic associated either prevention or restrictions or disruption on the supply chain. The consumer spending is impacted by the larger environment of the overall logistics, the overall sentiment, and certainly the pandemic impact has a more significant negative impact.
On the likelihood for next year, well, we believe the industry has an opportunity to reach a double-digit growth. The reason is that we think first of all, it has a low base. Then two, as we are seeing the country is becoming more and more capable of addressing sporadic outbreaks and becomes more responsive in addressing localized outbreaks.
We do think the government and the central government will gradually ease off some of the restrictions so that the economy will return to normal gradually. For our profitability better than our peers, we think that there are some of the perhaps three reasons. One is for sure our quality of services.
We've often talked about the price premium that ZTO enjoys, and we have consistently focusing on quality of services, differentiated quality of services, not only at the transit part, but ensuring our network partners at the pickup and delivery end are also up to par. That really helped us maintain a level of price premium in the marketplace. On the other hand, also bringing in more customers who focus more on quality versus price.
Second, our own initiatives, our own focus on end-to-end operational efficiencies also helped greatly, ensuring our profitability, and certainly we enjoyed better scale leverage than anyone else. Third, which is more important and overarching because it is our primary focus on balancing all three priorities: volume increase, market share gain, profit expansion, quality of services.
Further, we are exercising efforts and discipline not only to balance all three for ourselves, we are helping our network partners because then they are able to invest alongside of us, further their sustainable growth. We do believe going into a time of rebound and recovery, we are in a much greater position to maintain our lead and then further expand our market presence.
好 的 ， 谢 谢 。 这 边 我 想 追 问 多 一 下 ， 就 是 ， 可 不 可 以 跟 我 们 分 享 一 下 现 在 公 司 的 时 效 件 方 面 的 这 个 ， 这 个 业 务 方 面 的 一 个 亮 点 呢 ？ My follow-up question is, can you give some of the colors regarding to our time definite partial. What exactly the partial contribution or development contribution right now?
Pardon me, speakers, your line might be muted.
对. 对.
呃 ， 你 好 ， 这 个 快 递 企 业 都 做 多 元 化 产 品 ， 一 方 面 可 以 丰 富 产 品 结 构 ， 满 足 更 多 客 户 需 求 ， 增 加 收 入 。 另 一 方 面 ， 在 做 多 高 附 加 值 、 高 品 质 的 产 品 ， 可 以 提 升 客 户 对 品 牌 的 认 知 ， 加 深 竞 争 的 护 城 河 。
我 们 呢 从 去 年 开 始 正 式 推 出 标 快 产 品 ， 相 比 于 普 通 快 递 ， 该 产 品 提 供 盖 全 业 点 服 务 、 保 障 时 效 、 精 品 化 承 诺 、 末 端 定 制 化 派 送 。 目 前 已 经 覆 盖 全 国 大 部 分 的 主 要 地 级 城 市 ， 与 市 面 上 主 流 下 单 平 台 对 接 基 本 完 成 。
并 不 断 通 过 政 策 及 技 术 调 整 到 上 门 派 送 力 。 目 前 呢 日 均 接 量 ， 呃 ， 四 十 万 单 。 对 吧 。 目 前 已 成 功 投 放 在 鲜 花 、 牛 羊 肉 等 特 色 市 场 。 谢 谢 。
Indeed, to diversify our product is one of our initiatives. We have officially launched the Standard Express product since 2021, which both differentiated services in terms of predelivery phone call, guaranteed timeliness and precision commitments in last mile customer delivery.
It has currently covered most of our major cities, perfect level cities in China, around over 300+ cities. The predelivery call notification is over 99%. We have plugged into the mainstream ordering platform in the marketplace. We are also amping up the on-site delivery rate through strategic technology adjustment.
Our daily volume for this particular product is over 400,000 packages to be, to see customers are all enjoying this product. We have been successfully expanding this protocol, or this, yeah, this protocol. We are committed to expand these services further across the nation.
Our next question will come from Thomas Chong with Jefferies. Please go ahead.
Thanks management for taking my questions. My first question is about the e-commerce landscape. Given that we have been seeing short form video is ramping up very quickly, may I ask management about the our parcel volume mix among different platforms? My second question is about our investment strategies.
Given that we have been seeing our peers also investing in overseas and local on-demand, just want to get some color from the management with regard to our investment spending over the next couple of years, given that our profitability is very good. Thank you.
Thank you for your question. I'll take these two questions. We have been ZTO is a open platform. We serve all types of e-commerce or forms of those. You're right that the video streaming such as Douyin and Kuaishou and so on and so forth, they are all becoming more and more of the mainstream players in addition to what we have previously seen, the Tmall and Taobao.
As a open platform, we do serve all. In other words, the development of their growth, of their volume increases is consistent with our volume mix in serving these up and coming and new form of commerce. The second question, investment strategy overseas.
Since in the early years, about 10 years ago, we have started looking into Southeast Asia region of investment. However, we have come away with the experience that, first of all, those markets are small, much smaller. If you put some of the country together, they are probably equal to only one of our provinces domestically.
Our resource disbursement, our resource allocation is according to the size. Certainly, there are certain countries in the Southeast Asia, their opportunity is similar to perhaps China about 10, 15 years ago. Their e-commerce development is also enjoying great upside and room for growth.
Yet we have to be very careful, because we know network operations, we know the partner model, yet you have probably observed there are more quality demand, quality of services becomes available only when directly a vertically operating model, when that is more efficient.
What we have done is, as we put our footprint overseas in Southeast Asia, in that sense, we also expanded a resource, secure procurement in Europe and in Africa. The expansion investment for overseas has to be careful, has to be systemic. What we have also observed recently, the pricing capability has been really weak in the international arena. Part of it is, of course, the global pandemic impact.
Another part of it is the whole industry is going through recalibration. Cainiao being one of the key players, have shifted most of its volume to its own invested companies. The pricing in a way is volatile and so we are observing, we are watching. On a greater sense, ZTO have always been prudent in its own investment strategy. I can't tell you recently of certainty that we are going into international investment, but we are watching, we are observing. Finding the right opportunity becomes important for us to allocate our rich resources.
Thank you.
Our last question will come from Frank Yip with CICC. Please go ahead. Pardon me, Mr. Yip, your line might be muted. This concludes our question-and-answer session. I would like to turn the conference back over to Huiping Yan for any closing remarks.
Once again, thank you everybody for participating on our call. The company is in a great shape. We are taking the opportunity to better ourselves while the external microenvironment continue to improve. We are hopeful the rebound will certainly arrive in due time.
Another thing I wanna report to you or point out to you that the board has recently approved of an additional CNY 500 million buyback plan for us to ensure our return on our shareholders. I look forward to speaking with you all on in the future. Thanks again for joining us today.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.