Kerry Logistics pins growth hopes on e-commerce in China
March 27, 2014 Category Logistics, Logistics industry
Kerry Logistics Network said net profit soared 71.5% to HKD1.83 billion in its first announcement after listing last year, with growth this year focused on the e-commerce business in China. Core net profit only increased 8.7% year-on-year to HKD886.4 million after removing one-off revaluation gains from investment properties and disposal gains from its warehouse. Turnover rose 3.5% to HKD20 billion. The logistics company said cross-border e-retailing will be a key focus given the huge e-commerce market in China. “Beijing wants to shore up the economy through domestic consumption and e-commerce could facilitate this goal,” said Edwardo Erni, Kerry Logistics’ Managing Director for mainland operations. Talks with the General Administration of Customs of China began nine months ago to reduce tariffs on products ordered through its e-commerce platform, said Erni. The platform will be based in Hangzhou. The e-commerce business only accounts for 10% of its revenue generated from the mainland now. Greater China accounted for 70% of its total revenue last year. But an Analyst from a Chinese investment bank said that “e-commerce was not the company’s dominating earnings contributor, and its major growth engine would be the integrated logistics business in China and Southeast Asia”. The company said it will endeavor to increase its warehouse facilities in Thailand and Vietnam. Kerry also added three logistic facilities in Chongqing, Wuxi and Xiamen last year. Integrated logistics operations posted an 11.5% growth in profit to HKD1.27 billion. The international freight forwarding unit saw its profit jump 9.4% to HKD328.5 million last year, the South China Morning Post reports.
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