Analysis of Profitability Improvement Strategies for Debon Co., Ltd.'s Business Partner Outlets

Based on the searched information, I will systematically analyze how Debon Co., Ltd. (Debon Logistics) enhances the profitability of its individual business partner outlets.

Debon launched its

in September 2015, targeting areas with relatively weak network coverage, inviting individuals or merchants with logistics and distribution capabilities to cooperate in less-than-truckload (LTL) or express delivery businesses. Partners are but must accept the same standardized management as Debon’s self-operated outlets.

Model	Description
Model 1	Partner collects goods → Company’s transit transportation → Company’s self-operated outlets deliver
Model 2	Company’s self-operated outlets collect goods → Company’s transit transportation → Partner delivers
Model 3	Partner collects goods → Company’s transit transportation → Partner delivers

: Partners’ main operating income comes from two parts: and , and daily operating costs are borne by the partners themselves [1][2].

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• Debon continues to upgrade distribution tools; as of the first half of 2025, the number of four-wheeled vehicles used by couriers for terminal pickup and delivery reached 28,250
• Promote diversified delivery models, such as joint delivery with peers, township agency, etc.
• As of the end of the reporting period, township coverage reached
  95.21%
  [3]

• As of mid-2025, 46 sites with automated equipment and 95 sites with loading/unloading equipment have been put into use
• The damage rate of main products decreased by 22.4% year-on-year, effectively reducing cargo damage compensation costs [3]

• 168 trunk routes have been streamlined, and the full-process fulfillment rate increased by 1.3 percentage points year-on-year
• 16,560 self-owned trunk and feeder vehicles, improving transportation efficiency [3]

Cost Item	Optimization Measures	Effect
Pickup and Delivery Link	Intelligent zoning, precise personnel deployment	Improve labor efficiency
Transit Link	Site aggregation optimization, reduce transit times	Improve site efficiency per unit area
Transportation Link	Route optimization, route streamlining, vehicle model upgrading	Improve transportation efficiency
Asset Side	Refined management, rational allocation	Improve asset utilization rate [4]

• Debon enhances sales labor efficiency through
  systematic training empowerment
• Sales expenses in 2024 were RMB 172 million, a year-on-year decrease of 7.83%, reflecting the effectiveness of training [3]

• Upgraded administrative division maps to achieve broader and more precise township coverage
• Provide unified operation management system support

After JD Logistics acquired Debon in 2022, the synergistic effects between the two parties have gradually emerged, bringing new profit opportunities for partners:

Synergy Area	Specific Measures	Benefits for Partners
Business Order Diversion	JD Logistics provides labor services to Debon, with transactions reaching RMB 4.36 billion from January to October 2024, and expected to reach RMB 8.05 billion in 2025	Increase cargo sources and order volume
Network Integration	Two-thirds of sites have been integrated	Optimize transit routes and reduce transportation costs
Resource Sharing	Terminal delivery network integration	Expand delivery coverage and improve coverage rate [4][5]

According to Debon’s Business Partner model, income is mainly composed of the following parts:

1. Origin Commission
   : Revenue share from collecting goods
2. Destination Commission
   : Delivery fees calculated based on distance
3. Value-added Service Income
   : Fees for upstairs delivery, special operations, etc.

:

• Expand the standard pickup and delivery scope, cancel the fee restriction for ultra-long-distance delivery
• Strengthen the construction of upstairs delivery services; the complaint rate for upstairs delivery decreased by 61.5% year-on-year [3]
• The successful delivery rate increased by 1.2 percentage points year-on-year

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┌─────────────────────────────────────────────────────────────┐
│                    Framework for Enhancing Individual Outlet Profitability                    │
├─────────────────────────────────────────────────────────────┤
│                                                             │
│   【Revenue Growth】                          【Cost Reduction】                 │
│   ┌──────────┐                    ┌──────────┐             │
│   │ Business Increment │                    │ Cost Control │             │
│   ├──────────┤                    ├──────────┤             │
│   │• JD Orders │                    │• Automation  │             │
│   │• Regional Expansion │                    │• Intelligent Routing│             │
│   │• Value-added Services │                    │• Labor Efficiency│             │
│   └──────────┘                    └──────────┘             │
│                                                             │
│   【Empowerment】                          【Guarantee】                 │
│   ┌──────────┐                    ┌──────────┐             │
│   │ System Support │                    │ Brand Endorsement │             │
│   ├──────────┤                    ├──────────┤             │
│   │• Training Empowerment │                    │• Service Quality│             │
│   │• Management Tools │                    │• Customer Reputation│             │
│   │• Data Analysis │                    │• Standardization  │             │
│   └──────────┘                    └──────────┘             │
│                                                             │
└─────────────────────────────────────────────────────────────┘

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The core strategies for Debon to enhance the profitability of individual partner outlets can be summarized as follows:

1. Expand Business Scale
   : Increase cargo volume per outlet by leveraging order import from JD Logistics and expanding township network coverage
2. Reduce Operational Costs
   : Improve labor efficiency and site efficiency per unit area through investment in automated equipment, route optimization, and site integration
3. Strengthen Service Capabilities
   : Improve delivery timeliness and quality, reduce complaints and cargo damage, and lower compensation costs
4. Digital Empowerment
   : Provide systematic training and management tools to enhance partners’ operational capabilities
5. Optimize Revenue Sharing Mechanisms
   : Improve delivery fee standards and revenue sharing structures to ensure reasonable returns for partners

Against the backdrop of full integration between JD Logistics and Debon, as network synergies are gradually released, partner outlets are expected to gain more order resources and cost optimization space, and the profitability of individual outlets is expected to continue to improve.

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[1] Southwest Securities - Debon Co., Ltd. Research Report: Organizational Optimization Under Profit Pressure, Opportunities Remain in Express and LTL Integration (https://pdf.dfcfw.com/pdf/H3_AP202108301513278961_1.pdf)

[2] Logistics Series In-Depth Report: Less-Than-Truckload (LTL) (http://pdf.dfcfw.com/pdf/H3_AP201803261110338251_1.pdf)

[3] Debon Logistics Co., Ltd. 2025 Semi-Annual Report (http://qxb-pdf-osscache.qixin.com/AnBaseinfo/b7c534aa2afd66f62ca74ea4f5862c16.pdf)

[4] Huayuan Securities - Debon Co., Ltd. In-Depth Report: In-Depth Network Integration, Profit Prospects for LTL Giant (https://pdf.dfcfw.com/pdf/H3_AP202502141643073144_1.pdf)

[5] Guosen Securities - 2024 Investment Strategy for Aviation and Express Logistics Sector (https://pdf.dfcfw.com/pdf/H3_AP202401021615917277_1.pdf)