UPS responds to the rise in e-commerce by acquiring Kiala

UPS looks to capitalise on the booming e-commerce market in 2012.

The 1990s introduced the world to the likes of Amazon, AOL and EBay. Companies scrambled to build a presence on the internet and then when the dot com bubble burst in the early 2000s, a sense of reality set in for the business world. Now, thanks to the increasing use of smart phones and social media, the internet market is taking off again. As such, the rise in e-commerce has many companies renewing their interest in this market, including those within the logistics and transportation industry.

After reporting an impressive holiday peak season thanks to strong e-commerce sales, UPS unveiled part of its strategy to penetrate the e-commerce market by acquiring privately owned Belgian company, Kiala. Launched in 2001, Kiala operates in Belgium, France, Luxembourg, the Netherlands and Spain. According to Norman Black, UPS spokesperson, "We’re devising and looking for new answers in this space," Black said of e-commerce. "We need to be a leader in supporting this type of economic growth."

Through proprietary software, Kiala has integrated with more than 450 e-tailers through a network of over 6,500 collection point retail shops. This allows e-tailers to offer their shoppers the option of having goods delivered to a convenient retail location. Kiala is able to handle 150,000 packages per day and more than 50m per year.

Although terms of the deal were not made public, the co-founder and President of Kiala, Denis Payre said the company’s 2011 revenue was €49m.

Furthermore, UPS has partnered with Kabbage to enhance its e-commerce capabilities. Kabbage is a provider of working capital for online merchants operating on eBay, Amazon, Yahoo Stores, Etsy and Shopify. UPS Capital has provided Kabbage with a new debt facility specifically intended to fund small e-commerce business through Kabbage’s proprietary system. In addition, small businesses will be able to direct UPS to share their shipping history with Kabbage via the Kabbage.com website, giving the company more info about merchants‘ operations, which Kabbage uses to determine how much capital and at what rates it will provide the seller.

E-commerce has been a bright spot in an otherwise uneven and sluggish economic recovery. The two largest e-commerce markets, Europe and the US witnessed double-digit growth in 2011, with European internet sales growing 18% to €200.5bn; based on figures from the Center for Retail Research. Based on data from Comscore, the US market grew 12% to $256bn. Double-digit growth for both Europe and the US is expected to continue in 2012.

For transportation and logistics providers, this growth is creating changes in warehousing and distribution, delivery methods, and modes of transportation. These trends will likely benefit small parcel companies such as UPS, FedEx and DHL due to frequent small packages that e-commerce generates. 

Quelle: eyefortransport
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