Jun 15, 2015

UPS addressing advent of entrepreneurial economy


From left to right: Kurt Kuehn, CFO, David Abney, CEO, and Richard Peretz, standing in front of the picture of Jim Casey, founder of UPS, at the company's Atlanta head office

David Abney, Chief Executive Officer (CEO), Kurt Kuehn, Chief Financial Officer (CFO) and Richard Peretz, Deputy CFO of United Parcel Service, Inc. (UPS), met with the press from Asia at its headquarters in Atlanta on June 8, local time, and talked about such matters as the company's business policies. Abney pointed out that the world economy has shifted to an "entrepreneurial economy" where small/medium-scale companies go toe-to-toe with the global giants following the spread of e-commerce (EC). Citing that the activation of small/medium-size companies holds the key to the Asian economy, Abney said that, "We will support sustainable economies and EC through our UPS supply chain." He also discussed the alleviation of barriers to trade and the importance of innovation.

UPS held the press conference for the media from Japan, China, Hong Kong, Thailand and the Philippines. The salient points made by Abney and the other UPS officers are as follows.

[Abney]
*We think that the activation of small/medium-scale companies is important in the development of the Asian economy and we will support sustainable economies and EC through our supply chain (SC). There are big opportunities in Asia, so we also want to invest there. In case of SC, the small/medium-size companies in Asia are now able to conduct business all over the world the same way the major players do. In Asia, there are several millions of small/medium-size companies and that will become a huge competitive edge. While we call it the "emergence of entrepreneurial economy," small/medium-size companies doing business with the world has already become an everyday occurrence. If they effectively apply this "entrepreneurial economy" in the next 25 years, I think we will see the economic scale of Asia grow to about three folds that of Europe.

*No less important in the economic growth in Asia is the increase in the middle class. According to the computation of one analyst, the population of the middle class in Asia will triple in 2020 from today's 1.75 billion people. With that, the purchasing cost of general consumer commodities will surge, with the so-called B to C market considerably expanding. The increase in net transactions and the easing of the trade barriers by the governments is quickly changing the purchasing behavior of people. Asia accounts for one-sixth of the world's population, but its share in online shopping purchases worldwide has actually gone up to 46% in 2014. Its total purchase amount last year reached $580 billion, marking the first time that it exceeded North America. Sales in Asia in the EC industry will reach $1 trillion by 2017, surpassing that of North America by 20%. For consumers, the world will become their store, while for businesses owners, the world will be their customers.

*There are five investment strategies for the whole of UPS. First is capacity expansion. With this, we will increase our daily handling volume. We have been investing in new facilities and modernizing our existing facilities, while the capacity of healthcare facilities is also expanding in Asia. The second strategy is the improvement of operation efficiency. We will invest in new systems and technologies. The third is ensuring dominance in the growing markets. We will engage in Asia and Europe as strategic markets. The keyword for the fourth strategy is vertical integration. We will integrate systems, personnel and goods to provide solutions to the retail, healthcare, manufacturing and technology industries.

And last one is "One UPS." By offering our entire portfolio to customers, we, as one company, will provide them with comprehensive services that can satisfy customers.

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