Exploring Opportunities in the Social Commerce Market
Adrian Chan, Managing Director for Asia Pacific and Emerging Markets at YunExpress, speaks to Post & Parcel about the evolving landscape of social commerce and how his company collaborates with the “Four Chinese Dragons” — AliExpress, Temu, Shein, and TikTok.
Can you tell me about your experience in the industry?
I have over 12 years of experience at DHL where I began by working with B2B customers, handling complex logistics and supply chain management. I then moved to DHL E-commerce, focusing on the B2C sector. For the past 3 and a half years, I’ve been with YunExpress, a startup specialising in cross-border logistics for leading e-commerce platforms.
How was YunExpress founded?
Yun Express was founded in 2012 as a solution to help Shein, which at the time specialised in wedding dresses, export products from China to overseas markets. Shein’s founder met with a logistics expert in Shenzhen, and during a dinner, they discussed how to create a more efficient shipping method. At the time, Shein was relying on postal services, but this method was slow, taking about two to three weeks for delivery in US and Europe. Plus other shipping options were limited. The goal was to find a solution that was faster than regular post and cheaper than express delivery. This conversation led to the creation of YunExpress, which was designed specifically for cross-border shipping, laying the foundation for logistics solutions before the major boom in e-commerce.
What drew you to the company?
I was approached by the founder of YunExpress who asked me to join the company as the Managing Director for the Asia Pacific region – it was a great opportunity for me. I am based in Hong Kong but we also have offices in Japan, South Korea, Taiwan, Vietnam, Thailand, Cambodia and Australia. I oversee 100 people and am responsible for B2C business in APAC.
What is the focus of your role?
YunExpress focuses on B2C exports not only from China and Hong Kong but for all areas in Northeast and Southeast Asia, we also export to US and Europe.
Why is Hong Kong such a great base?
A lot of transit shipments are done in Hong Kong so we have an outbound warehouse here with a capacity of 5,000 tons per month and we are handling shipments from one of the four Chinese dragons here. Also Hong Kong is a free trade port so it is a great place to connect shipments and export to the US and Europe.
What was the first Chinese e-commerce marketplace to go global, and what markets did it focus on?
The first major Chinese e-commerce marketplace to materialise was AliExpress. About ten years ago, it became one of the earliest platforms to export products from China to overseas markets. Initially, it focused on emerging markets like Russia, rather than the U.S., which was dominated by eBay at the time.
How did Shein rise in prominence internationally?
Shein initially had a low profile and was mainly known to the Chinese e-commerce industry. Its international recognition soared after it launched its IPO, leading to more people downloading the app and purchasing clothes, often without realising that all products were sourced from China.
What role does YunExpress play in Shein’s international operations?
YunExpress was created as a logistics solution to support Shein’s global expansion. The founder of Shein sought to streamline the export process for Shein garments from China to overseas markets. YunExpress plays a key role in shipping these products.
What is the relationship between TikTok and YunExpress?
YunExpress has worked with TikTok for over two years, with TikTok’s parent company investing in YunExpress. They support TikTok’s e-commerce business by shipping products purchased via TikTok’s live channels to the UK. YunExpress is one of the carriers handling this significant volume of shipments.
What is Temu, and what has been the experience of working with them?
Temu is another emerging Chinese e-commerce giant, referred to as one of the “four dragons.” They started around 2022 but have gained a reputation for being highly demanding with tough KPIs (Key Performance Indicators). Many logistics providers, including YunExpress, have found it challenging to work with Temu due to unfair regulations and hidden costs. YunExpress proactively lowered its co-operation level with Temu early in 2023 because the partnership was not sustainable.
How are these marketplaces managing logistics, and what impact does it have on logistics companies?
Marketplaces like Shein, Temu, and others are breaking down the shipping process into four segments: first-mile pickup, port to port shipping, including charters, customs clearance, and last-mile delivery. They outsource each segment to different suppliers, driving down costs but placing heavy burdens on logistics companies. These companies face hidden costs, penalties, and the need for additional staff to manage the complexity of operations. This system reduces the need for the marketplace to have a large logistics team, shifting the workload to logistics providers.
What are the challenges faced by logistics companies working with marketplaces like Temu?
Logistics companies struggle with low profit margins, hidden costs, and long credit terms (up to 180 days in some cases), which can strain cash flow and even lead to bankruptcy. Additionally, Temu enforces strict penalties for operational delays, cutting into profits. This creates an imbalanced relationship where logistics providers have little room for negotiation.
What advice would you give to logistics companies working with e-commerce marketplaces?
The main advice is Logistics company should build up the defences in infrastructure, such as having own airfreight capacity, airport terminals, last mile delivery network. Companies should consider all hidden costs when providing quotes, including financial costs like high interest rates. They should only enter contracts if they are certain they can meet the tough KPIs, as penalties for even small delays can be significant. Additionally, companies should not lower prices too much, as this can hurt long-term business and make it difficult for new players to enter the market.
How are e-commerce marketplaces pushing logistics providers to improve?
Marketplaces are forcing logistics providers to upgrade their technology, especially in tracking and transparency. The ability to track shipments in real-time is now a critical KPI, and companies must invest in better tracking systems to meet these demands. This ensures greater visibility for consumers and minimises claims of lost shipments.
Why is transparency so crucial for logistics in social commerce?
In social commerce, consumers are highly engaged with apps that provide real-time updates. They expect constant visibility into their orders and will monitor shipments frequently. Transparent tracking builds consumer trust, whereas a lack of updates can lead to customer service issues and dissatisfaction.
What do you see as the future of social commerce, and how will it impact logistics?
Social commerce is evolving rapidly, with platforms like TikTok not only spreading viral content but also enabling real-time commerce. When a trending event occurs, it can spark immediate demand for products, as seen in cases like the production of pro-Donald Trump merchandise in China within hours of the assassination attempt in July 2024. This creates unpredictable and sometimes large shipment volumes, pushing logistics companies to be agile and prepared for sudden demand spikes. In the future, social commerce is expected to drive more dynamic and fast-paced changes in global shipping.
About Adrian
Adrian is an experienced cross border logistics leader with a demonstrated history of working in the ecommerce logistics industry. He has served in DHL for over a decade and worked as pioneer in developing China market in two different business units: DHL Global Forwarding and DHL eCommerce Solution. After gaining enough industrial knowledge from global 500, he has decided to leave the comfort zone and become the Managing Director of Asia Pacific Region in YunExpress which is a unicorn startup in Shenzhen, China. Adrian studied at The Chinese University of Hong Kong and University of Michigan, and graduated with an MBA Degree.
