Courier YTO Express on fast route to riches

By Wang Ying (China Daily) Updated: 2015-11-30 07:17

A Shanghai YTO employee checks a parcel's address to make sure it is correct. [Photo provided to China Daily]

Fifteen years later, the group now employs 220,000 staff and operates a network that covers about 93 percent of the counties across the country.

In 2014, YTO delivered 2.1 billion packages, generating revenue of 24.6 billion yuan. The maximum number of parcels handled in a single day last year hit 25 million.

"We still see huge growth potential for the fast delivery industry," Yu said. "There is a great deal of demand out there for express services from food to toys and from clothes to electronic goods.

"There are so many urban areas that are waiting to be developed. Then, of course, there is the much broader rural market."

Still, the sector is highly competitive and only the strongest and the fittest groups will survive. Many of the smaller players are likely to go under or link up with one of the industry's leading companies.

A new age is dawning for the business, Yu pointed out, as it matures and expands.

"Competition can be cruel and only the best will survive," he said. "The rising cost in human resources requires us to set up a solid management system and an experienced team.

"We are also looking for opportunities in setting up cross-border (country-to-country) e-commerce industrial parks by cooperating with local governments."

Already the State Council has approved a proposal to promote the development of the express delivery sector, which is projected to be worth 800 billion yuan by 2020. Key to that is to increase international competitiveness and expand air delivery capacity.

"The big question is how companies can benefit from the government's support policies and grasp the opportunities in urban areas," Yu said.

"There are also opportunities to develop business in free trade zones as well as (other overseas) initiatives."

YTO plans to expand its air cargo operations. Back in September, the company's first aircraft completed its maiden flight, making it the third Chinese delivery firm behind EMS and SF Express (Group) Co to own a jet.

By 2020, YTO hopes to have a cargo fleet of 50 aircraft, rising to 100 in 2025.

"It's only the beginning for YTO's cargo fleet," Li Shiqing, an industrial analyst from Minsheng Securities, said.

"The next step is to raise the level of its information and management ability, because software is equally as important for a company as hardware."