SF Ex­press, UPS set up JV for intl de­liv­ery

Global Times - - Biz Overview -

China-based SF Ex­press and US-based UPS an­nounced on Thurs­day that their joint ven­ture has been ap­proved by China’s Min­istry of Com­merce. They plan to de­velop in­ter­na­tional de­liv­ery ser­vice from China to the US and even­tu­ally to other des­ti­na­tions.

Each side in­vested $5 mil­lion in cap­i­tal to es­tab­lish the com­pany, and the 50-50 joint ven­ture (JV) is ex­pected to be based in Hong Kong but with busi­ness op­er­a­tions in the Chi­nese main­land, ac­cord­ing to a state­ment SF sent to the Global Times on Thurs­day.

The ven­ture will com­bine “SF’s ex­ten­sive 13,000 ser­vice points across 331 cities in China with UPS’ glob­ally in­te­grated 220-coun­try net­work in the world’s fastest-grow­ing small pack­age mar­ket,” said the state­ment.

The com­pa­nies un­veiled a new prod­uct – SF-UPS di­rect ship­ment+ – for eco­nomic in­ter­na­tional pack­ages from China to the US on Thurs­day.

The ser­vice, with a max­i­mum de­liv­ery time of seven days, will ini­tially launch in South China and grad­u­ally be­come na­tion­wide avail­able by the end of 2017, the state­ment noted.

The joint ven­ture aims to tap into the boom­ing in­ter­na­tional de­liv­ery mar­ket cre­ated by China’s ris­ing cross-bor­der ecom­merce in­dus­try, news web­site jiemian. com re­ported on Thurs­day.

In 2016, China’s global ex­press de­liv­ery ser­vices car­ried 626 mil­lion pack­ages, up 44.2 per­cent year-on-year.

In the first eight months of 2017, vol­ume rose 31.3 per­cent year-on-year to 490 mil­lion pack­ages.

How­ever, “the global de­liv­ery ser­vice has been dom­i­nated by in­ter­na­tional firms, and do­mes­tic lo­gis­tics are still largely ab­sent from the mar­ket,” said the re­port, cit­ing ex­perts.

Ex­perts also fore­cast that as an in­creas­ing num­ber of do­mes­tic courier gi­ants have gone pub­lic in re­cent years, the global de­liv­ery mar­ket will be the next bat­tle­ground of com­pe­ti­tion for them.

In Fe­bru­ary 2016, SF Ex­press made its de­but on the Shen­zhen Stock Ex­change, with a mar­ket cap­i­tal­iza­tion of about 210 bil­lion yuan ($31.5 bil­lion).

Sub­se­quently, YTO Ex­press and STO Ex­press also listed in the do­mes­tic mar­ket. In Oc­to­ber 2016, ZTO Ex­press raised $1.4 bil­lion with a New York list­ing.

On Thurs­day, shares of SF Hold­ing, the listed unit of SF Ex­press, closed at 54.18 yuan, up 0.13 per­cent from the open­ing.

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