Supply Chain Leaders: YTO Express.
Founded in 2000, China`s largest and fastest growing express delivery company, YTO now employs more than 180,000 workers in 20,000 delivery centers across China. YTO delivered 14 billion packages last year. It`s services cover warehousing, distribution and special transport. In 2014 it launched it`s 90% owned subsidiary YTO Cargo Airlines which initially began operations, out of its Hangzhou hub.
Shanghai Yuan Tong Express Co., Ltd. (YTO Express) is now the largest express delivery business, by market share, in China after taking advantage of the booming domestic e-commerce industry. Yu Weijiao, YTO chairman, has turned the company into a market leader in China. With 84 centers in Beijing alone and 20,000 country-wide, the group is taking advantage of the government's decision to realign the economy from cheap, mass-produced exports toward more sustainable consumer-fuelled domestic growth.
In 2015 the company's revenue reached 204 billion yuan ($37.79 billion), up 42% compared to the same period in 2013, during a time of slowing economic activity, up to 19 billion yuan of which was indirectly generated by express delivery services, and that figure is expected to reach 60 billion yuan by 2020.
During the 2015 Singles' Day on Nov. 11th, the company received 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.
Key to YTO's success has been expansion: from YTO's humble beginnings in 2000 when it started with a meager investment of 50,000 yuan and employed 17 staff the group now employs 180,000 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.
With huge growth potential in the Express delivery sector amid strong competition from competing companies only the strongest companies are expected to survive, while smaller players are likely to link up with the leading companies such as YTO.
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 expanded air delivery capacity facilitating the rapid rise of cross boarder e-commerce.
YTO also plans to expand its air cargo operations as the company completed the maiden flight of its first aircraft in September 2014. It hopes to have a cargo fleet of 50 aircraft by 2020 and 100 in 2025.
Although YTO has plans to take the company public, a timetable has yet to be announced, as the company is aiming at building a highly competitive international network first: last year, the group set up an overseas business department and the company has registered its trademark in more than 100 countries.
They plan to establish about 20 overseas branches in countries including South Korea, Australia, the United States, Thailand, India, Russia and France.