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YTO Express Now China’s Largest, Fastest Growing Logistics Company

| Dec 01, 2015 07:47 AM EST

As the largest and fastest growing express delivery company, YTO now employs more than 220,000 workers in 20,000 delivery centers across China.

Shanghai YTO Express (Logistics) Co. Ltd. is now the largest express delivery business by market share in China after taking advantage of the booming e-commerce industry, China Daily reported.

According to the report, the company now employs up to 220,000 workers in 20,000 delivery centers across China. Yu Weijiao, YTO chairman, has turned the company into a driving force that generated billions of yuan in revenue.

YTO has 84 centers in Beijing alone and 20,000 country-wide, as the group takes advantage of the government's decision to realign the economy from cheap, mass-produced exports toward more sustainable consumer-fuelled domestic growth.

Ma Junsheng, chief of the State Post Bureau, said that companies such as YTO delivered 14 billion packages last year, as China surpassed the United States in the sector for the first time.

The report said that the company's revenue reached 204 billion yuan ($37.79 billion), up 42 percent compared to the same period in 2013, an "amazing achievement" during a time of slowing economic activity.

"We have become the no. 1 express delivery service in the country and provide more opportunities for other businesses involved in the sector," Yu said. "In 2014, up to 19 billion yuan was indirectly generated by express delivery services, and that figure is expected to reach 60 billion yuan by 2020."

Yu, 49, was born in Tonglu County, Zhejiang Province. He successfully turned the small firm into an express delivery empire in just 15 years.

The data of YTO's growth showed the group's rapid rise, the report said.

During this year's Singles' Day on Nov. 11, the company got a record-breaking 53.28 million orders across China. The group handled more than 30.59 million packages, or roughly 21 percent of the industry's total.

According to the report, the key to YTO's success is expansion. Last month, the company unveiled its new headquarters in Shanghai, worth 600 million yuan, a far cry from YTO's humble beginnings in 2000 when it started with a meager investment of 50,000 yuan and employed only 17 staff.

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."

The report said that the sector is highly competitive and only the strongest are expected to survive, while smaller players are likely to link up with the leading companies.

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

"Competition can be cruel and only the best will survive," Yu 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."

As the State Council approved a proposal to promote the development of the express delivery sector, which will be worth 800 billion yuan by 2020, the key is to increase international competitiveness and expand air delivery capacity.

YTO also plans to expand its air cargo operations as the company completed the maiden flight of its first aircraft in September. It hopes to have a cargo fleet of 50 aircraft by 2020 and make it 100 in 2025.

Yu said that the group must continue to evolve. Although YTO plans to take the company public, a timetable has yet to be announced, as the company is aiming to build a highly competitive international network in the future.

Last year, the group also set up an overseas business department and the company has registered its trademark in more than 100 countries.

"About 20 overseas branches will be established next year, in countries including South Korea, Australia, the United States, Thailand, India, Russia and France," Yu said.

YTO is also looking to diversify part of the business to increase the bottom line and stay competitive. It considers diversifying IT, finance and cultural projects but wants to maintain the express delivery service as the core of the company's operations.

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