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Oct. 26 (NBD) – Intra-city freight car-hailing platform Kuaigou Hailing announced a strategic cooperation with advertising giant Focus Media (002027.SZ) on Wednesday, in a bid to tap deeper into the consumer market. 

Kuaigou provides on-demand online-to-offline service for short-distance delivery of goods. Previously, Kuaigou mainly served merchants and businesses, but has recently expanded to cover consumer needs like moving home. 

Kuaigou's strategic transformation started with a name change in August. The company was formerly known as 58 Suyun. The term Suyun (express delivery in Chinese) sounds strange to general users, and a new name is to make the brand more recognizable among city dwellers, founder and chairman of the board Chen Xiaohua said.

And the cooperation with Focus Media will help the freight taxi-hailing company reach out to China's 300 million middle-income earners, Chen added. 

Xie Xiaowen, a researcher at the E-commerce Research Center, told NBD that the precise marketing indicates that Kuaigou intends to cultivate more potential customers, and establish itself as a top brand in intra-city on-demand freight delivery, building a foundation for composite business models in the future.

The demand for intra-city logistics is currently huge. According to statistics from Data Center of China Internet (DCCI), the market size of China's intra-city business-to-business delivery reached 1.5 trillion yuan (215.8 billion U.S. dollars), luring more and more investors to step in. 

Kuaigou raised 250 million U.S. dollars in series A round of funding in July. Huolala, a similar intra-city freight car-hailing app that used to focus on the consumer market, marched into business-to-business service in April, and is taking steady steps towards international expansion. Delivery giant SF Express also trialed car-hailing services for cargo in September.

However, an industry insider expressed concerns about the demand for truck-hailing among individual users. A business customer can place 5 to 8 orders on average a day, but individual consumers' needs are very few. Advertisement is futile when demands are insufficient. For the same reason, the insider thought there will not be fierce competition among freight car-hailing companies in the consumer sector.

Email: limenglin@nbd.com.cn