China of­fers vast op­por­tu­nity for UPS

China Daily (Canada) - - FRONT PAGE - By AMY HE in New York amyhe@chi­nadai­

China is a “top pri­or­ity mar­ket” for United Par­cel Ser­vice, the company’s chief ex­ec­u­tive said at an in­vestor con­fer­ence on Thurs­day.

CEO David Ab­ney said the shipping company will ex­pand more in China next year. UPS has a two-pronged strat­egy for the world’s sec­ond-largest econ­omy.

“The first is to widen our foot­print, ex­pand­ing our pres­ence in 20 new mar­kets across China,” Ab­ney told in­vestors. “The sec­ond is to deepen our pres­ence fur­ther into 33 mar­kets we’re in to­day.” He said there would be an ex­panded fo­cus on tar­geted in­dus­tries, as well as large Asian multi­na­tion­als and pri­vate com­pa­nies.

Ab­ney, who had just re­turned from the Asia-Pa­cific Eco­nomic Co­op­er­a­tion meet­ing in Beijing, said that Pres­i­dent Xi Jin­ping made “very fa­vor­able com­ments” about re­form in China that he and other in­ter­na­tional CEOs are ea­gerly an­tic­i­pat­ing.

Xi said that China is pro­gress­ing on its sup­ply chain “and that things need to be ad­dressed”.

The APEC meet­ing also co­in­cided with China’s an­nual Sin­gles Day shop­ping event — also known as 11.11 — a day on which e-com­merce com­pa­nies set sales records, with Alibaba Group Hold­ing Ltd re­port­ing business worth $9.3 bil­lion.

“I was al­ready hear­ing all the ex­cite­ment about Sin­gles Day,” Ab­ney said. “There’s

I was al­ready hear­ing all the ex­cite­ment about Sin­gles Day. There’s huge op­por­tu­nity just from a ram­pup of that scale.” DAVID AB­NEY CHIEF EX­EC­U­TIVE OF­FI­CER OF UPS

huge op­por­tu­nity just from a ramp-up of that scale, es­pe­cially in a coun­try whose in­fra­struc­ture maybe has not quite caught up; although they’re do­ing a lot.”

UPS is fo­cus­ing on in­dus­tries that “gen­er­ate 90 per­cent of China’s GDP”, Ab­ney said. Much of the company’s planned ex­pan­sion will oc­cur in 2015.

UPS re­ceived li­censes to of­fer do­mes­tic ex­press pack­age ser­vices in Beijing and other ci­ties ear­lier in Au­gust — as did com­peti­tor FedEx. The com­pa­nies pre­vi­ously were limited to de­liv­er­ing pack­ages from abroad.

“Econ­o­mists said the majority of global growth in fu­ture decades will come from emerg­ing economies, and we’re ready to cease this op­por­tu­nity,” Ab­ney said.

Kurt Kuehn, UOS’ chief fi­nan­cial of­fi­cer, said that with ex­pan­sion in China and across Europe, the company ex­pects 6 to 9 per­cent growth in in­ter­na­tional rev­enue.

UPS, which started do­ing business in China in 1988, has 6,476 em­ploy­ees in the coun­try and two hubs: one in Shang­hai for global business and one in Shen­zhen that pro­vides in­tra-Asia ser­vices. UPS has 216 weekly flights con­nect­ing China to the US, Europe and the rest of Asia.

In June, UPS an­nounced that it will be­gin of­fer­ing rail ser­vice be­tween China and Europe. The rail ser­vice con­nects Chengdu, China, with Lodz, Poland, and Zhengzhou, China, with Ham­burg, Ger­many. The company said that the ser­vice is for cus­tomers “look­ing to bal­ance sup­ply chains.”

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