Competition in the logistics sector has escalated to such an unprecedented scale that companies are forced to be “unique” in terms of products and services, according to a senior industry professional.
Andy Heung, general manager at Yamato International Logistics (HK) Ltd., told the Hong Kong Economic Journal that having some uniqueness is now a matter of survival for logistics firms.
Leveraging on its Japanese background, Yamato has entered business-to-consumer (B2C) businesses in recent years, tapping the growing online consumption, said Heung, pointing to the company’s fresh foods express services that deliver — point to point — sashimi, seafood, fruits and vegetables from vendors in Japan.
Heung said such express services are targeted to account for 30 percent of his firm’s total revenue in two years, against the current 20 percent. More resources will be put into the segment, with at least HK$40 million (US$5.16 million) to be invested in a new 10,000-square feet cold storage facility.
Developing downstream businesses is another area to work on, said Heung, adding that the lack of space in Hong Kong has limited the growth in the logistics and storage sector.
Yamato’s unit in Hong Kong has yet to break even though it has been in operation for over three years in the city and has put in more effort in B2C businesses. Last year, the unit’s loss topped HK$1 million, but it was narrower than the loss posted in 2012, Heung said.
The company is seeking to ally with Tmall.com in a second attempt to enter the mainland market. Heung admitted that it is difficult to get a slice of the mainland business as the company is stepping in a bit late.
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