Why Is United Parcel Service Upping The Ante In China?

Seeking Alpha
12, 2014

America's largest parcel delivery company United Parcel Service (NYSE:UPS) earns the lion's share of its total revenue from domestic operations. Now, the company's keen on widening its international reach, particularly in the emerging markets. With rising per capita income leading to higher discretionary spending among the middle-class population, emerging economies are offering huge growth potential to courier companies. Over the last decade, UPS has tried to make its presence felt in China, Poland, and Turkey.

UPS has been in China for more than two decades, gradually expanding its operations, but in 2009, after China put restrictions on foreign courier companies asking for license renewals, expansion came to a standstill. Good news is that the nation has issued licenses allowing foreign courier companies to expand operations regionally. As prospects in the Mainland are encouraging, can the Atlanta-based giant capitalize on the same, and contest home-grown companies that have become stronger during this period?

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