UPS sees China's local businesses as growth market

Updated: 2016-02-03 10:34

By AMY HE in New York(China Daily USA)

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China has the most dynamic e-commerce market in the world and gives UPS a great opportunity to participate in the logistics sector, said the president of UPS International.

"Everybody knows Alibaba. Take a look at Take a look at some of these other marketplaces that are connecting in and out of China as to what is happening in the world today," Jim Barber told China Daily after the company's fourth-quarter earnings were announced on Tuesday.

"You get very quickly into the growth of e-commerce: It's material, it's fast, it's huge. I would consider China to be the most dynamic market in the world, not even close to anything else I've seen," he said.

UPS reported a higher quarterly net profit than analysts expected, with earnings of $1.57 per share compared to an estimated $1.42, buoyed by shipments from the holiday season, the company said. Sales rose to $16.1 billion and net income doubled to $1.3 billion. Revenue rose in the last quarter of 2015 from $15.90 billion to $16.05 billion.

The company delivered 1.3 billion packages in the fourth quarter, up 1.8 percent compared with the same period the year before. UPS delivered 4.7 billion packages in 2015.

Barber addressed China's sluggish growth, saying that there looks to be an uptick in the capacity of the market. Load factors, which indicate the usage of air networks for freight logistics, are starting to pick up.

"The question is how it's going to behave after Chinese New Year. We'll get a better read on that in the next week. We've got the capacity to handle it and we hope it ticks up, because that's a great sign for trade," he said.

Barber sees growth to be "more local" in China in 2016, and UPS will look to work with small- to medium-sized enterprises that are growing their businesses.

"As they start to serve China and other countries, we need to be more readily available to them so they get to know us," he said. "That local, small-to-medium business in China is just coming of age and starting to export to the world. We want to become one of their partners," he said.

UPS launched their "Made in China 2.0" study in 2014, compiled to educate the middle market businesses in China about how they can change in order to lead in the manufacturing industry.