UPS expects quicker growth in its B2C business
Business-to-customer
UPS, global leader in logistics, is anticipating the business to customer (B2C) model to grow at a quicker pace than the business to business (B2B) model with more establishments going online paved by growing e-commerce platforms that are competing with the traditional retailing business.
Christopher Buono, the new managing director of UPS Philippines, said that at present their business is equally driven by B2B and B2C transactions, but said that B2C is expected to grow at a faster pace.
“Based on what I’ve seen, more retailers are supporting mobile platforms,” he said adding that e-commerce is disrupting the logistics industry, which is now trying to cope with demand and support its customers.
Buono said that fueling the B2C growth in the Philippines is the country’s huge import volume, growing exports and lots of overseas Filipino workers. He also noted of the increasing number of small and medium enterprises and rising middle class.
As a result, logistics firms are now adopting complex solutions to address the ever-changing demand following the surge of e-commerce platforms. For instance, B2C deliveries are done on weekends because customers are normally at home during those days.
Buono also noted that the use of drones, which the UPS is trying to implement in Japan, may also fit the Philippine landscape for the delivery of supplies to provincial areas.
Although the use of drone is part of UPS global perspective and an opportunity for the Philippines, it is not yet here in the country.
“The future is very bright for both UPS and the Philippines. Based on the past five years, the Philippines is a market to watch,” he said citing that strong trade and domestic consumption are key in driving growth.
Indicating its bullish outlook in the country is the recent expansion of its services in the Philippines for alcohol shipments to include B2C from only B2B. The Philippines is now among the 10 countries in the Asia Pacific where it can ship to businesses and consumers to all three alcohol categories – wine, beer and spirits (liquor).
Aside from the Philippines, other destinations include China, Hong Kong, Japan, Korea, New Zealand, Singapore, Taiwan, Thailand, and Macau. In Malaysia, only businesses can import wine and beer.
Additionally, UPS can now serve 24 of the top 35 wine importing countries, and 9 of the top 25 spirits (liquor) importing countries globally.
Depending on the destination, orders can arrive at a retailer’s storefront or consumer’s home within three business days using one of the UPS Worldwide Express® shipping services, and within five business days using UPS Worldwide Expedited®. All alcohol shipments require an adult signature upon delivery to consumers.
In the case of the Philippines, most of the alcohol shipments are inbound, largely from Europe.
“Alcohol producers from around the world can take advantage of this significant expansion to gain coveted access to doing business in Asia Pacific, particularly in China, where a fast-growing middle class is driving demand for more expensive and premium goods such as imported alcohol,” UPS said in a statement.
With the rising popularity of new distribution channels such as e-marketplaces, particularly among the younger generation of China’s burgeoning consumer market, stronger demand is expected for cross-border alcohol shipments originating from these countries.
The UPS shipping system helps wineries, breweries, and distilleries avoid delays by uploading all of the required alcohol-related documentation for each country.
“Alcohol merchants and retailers, operators in the food and beverage sector, and consumers in the region can all benefit from a wider range of brands and price points to choose from, while continuing to receive their orders with the same speed, reliability, and traceability that UPS’s global transportation network provides,” the company said.
Buono also noted that this B2C model in alcohol shipments can be expanded in other industries such as electronics.