The company will be investing HK$1.5m, taking up a 50% stake in the JV called vPOST Hong Kong.
Through the JV, SingPost, together with 4PX Worldwide Express, will be providing internet shopping, shipping, and logistics services, according to OCBC’s report.
Here’s more from OCBC
Eyeing the Chinese e-commerce market
Another step in regional expansion. Singapore Post recently announced that together with 4PX Worldwide Express, it will set up a joint venture called vPOST Hong Kong which will provide internet shopping, shipping, and logistics services. SingPost will invest HK$1.5m and take up a 50% stake in the JV. Recall that Quantium Solutions, a subsidiary of SingPost, had earlier invested S$11.5m for a 20% stake in Shenzhen 4PX Express which provides international express delivery services (excluding postal services), international freight forwarding, import/export of goods and technology. This is in line with SingPost's strategy to expand its inbound and outbound logistics and e-commerce market.
China's e-commerce market has huge growth potential. These investments give SingPost a platform for entry into the logistics and high-growth e-commerce market in countries such as China and Hong Kong. The growth potential of China is especially eye-catching; as its economy grows, more of its consumers and businesses are able to purchase goods as well as sell to other markets. According to AT Kearney, China's e-commerce market has grown at a compound annual growth rate of 90% over the past five years to more than US$32b in 2009 and is estimated to be worth US$175b in 20141 . Factors that will drive this trend include an increase in purchasing power among residents which would drive the growth of online shoppers, and the development of greater online security.
Do you know more about this story? Contact us anonymously through this link.