ZTO Express (Cayman) Inc. (NYSE: ZTO)

ZTO Express (Cayman) Inc. is a leading express delivery company in China. Through its network and network partners, the company provides domestic and international express delivery services supplemented by value-added services such as cash-on-delivery, alternative address pick-up and delivery, and proof-of-delivery collection. It has developed an extensive delivery network covering over 99% of cities and counties in China, consisting of sorting hubs, line-haul transportation, and pickup and delivery outlets operated by network partners.

ZTO Express generates revenue primarily from network transit fees charged to its network partners for express delivery services. These fees consist of a fixed amount per waybill and a variable amount per parcel based on weight and route distance for sorting and line-haul transportation. The company also earns revenue from direct services to enterprise customers, including e-commerce platforms and traditional merchants, for customized express delivery solutions, reverse logistics, and freight forwarding through acquired subsidiaries. Additionally, ZTO Express provides financial services to qualified network partners, including loans and financing arrangements, contributing to its revenue streams.

The company operates through the following segments: Domestic Express, International Express, and Ancillary Services.

• Domestic Express: This segment focuses on express delivery services within China for parcels under 50 kilograms with delivery times ranging from 24 to 72 hours. It includes intra-city and inter-city delivery, enterprise customer services such as customized one-stop solutions and reverse logistics, and regional services like Hong Kong/Taiwan door-to-door express. The ZTO and Zhongtong brands are used uniformly across network partner outlets, personnel uniforms, transportation vehicles, and packaging materials under this segment.

• International Express: This segment provides cross-border express services to key overseas markets through cooperation with business partners. It leverages ZTO’s network infrastructure and partnerships to facilitate international parcel delivery, particularly in Southeast Asia, Africa, and other regions. The service operates under the ZTO brand and integrates with global logistics networks to ensure end-to-end tracking and delivery.

• Ancillary Services: This segment includes value-added offerings such as cash-on-delivery, alternative address pick-up and delivery, proof-of-delivery collection, and parcel interception. These services enhance the core delivery experience by allowing senders to collect payment upon delivery, change pickup or destination addresses, retrieve signed receipts, or redirect parcels before delivery. Ancillary services are integrated into both domestic and international operations and are promoted through ZTO’s technology platforms and mobile applications.

ZTO Express holds a leading position in China’s highly competitive express delivery industry, competing with major players such as YTO Express, STO Express, Yunda Express, J&T Express, SF Express, JD Logistics, and China Post’s EMS. Its competitive advantages stem from its extensive network scale, advanced automation in sorting hubs, proprietary Zhongtian technology system, and strong partner network model. The company’s investment in high-capacity trailer fleets, AI-driven safety systems, and data analytics enables operational efficiency and cost leadership, reinforcing its market standing.

ZTO Express serves a broad customer base consisting primarily of e-commerce merchants on platforms like Alibaba, JD.com, and Pinduoduo, as well as traditional retailers and enterprise customers with nationwide branding. The company also supports individual consumers and small businesses through its network of pickup and delivery outlets and last-mile posts. Through its enterprise sales team, ZTO maintains direct relationships with large-volume clients requiring customized logistics solutions, including return parcel handling for e-commerce platforms.