Courier STO Express launches Japan hub in expansion spree

An STO Express Co Ltd delivery vehicle in Guangzhou. STO founded a standalone business unit last September to tap the overseas market. The unit chose Okinawa as the logistics center after a research trip led by Chairman Chen Dejun the same month. Provided to China Daily

Move comes on the heels of firm's subsidiary and website opening in United States

Domestic courier company STO Express Co Ltd plans to establish its first overseas logistics hub in Japan as it expands around the globe.

The move follows the recent launch of STO's website in the United States, which is intended to take advantage of booming cross-border e-commerce, according to company executives.

STO founded a standalone business unit last September to tap the overseas market. The unit chose Okinawa as the logistics center after a research trip led by Chairman Chen Dejun the same month.

As the southernmost prefecture of Japan, Okinawa is well-placed to serve as a transit point for destinations elsewhere in Japan as well as China and South Korea. It's within two hours flying time of each of those destinations, Zhang told the newspaper.

The airport in Naha, Okinawa, offers 24-hour cargo facilities and customs clearance. It handles scheduled traffic to key regional airports including Taipei, Macao, Shanghai, Seoul and Hong Kong.

"It means cargo delivery within Northeast Asia can be achieved within 24 hours," said Zhang.

Hong Kong remains STO's largest overseas logistics center, he noted. The company is also poised to enter Malaysia and Singapore in 2014, he added.

The establishment of the Japan hub is in line with a broad, aggressive expansion into the United States. STO registered a subsidiary in Los Angeles last October.

According to its website, STO operates its US unit in partnership with a local delivery provider. It has already launched warehouse services and some parcel businesses in the US.

STO is not alone in its expansion plans. Twelve private Chinese express companies, such as Shanghai-based YTO Express Co Ltd and Shenzhen-based SF Express (Group) Co, have applied for international business licenses from the State Post Bureau of China.

In 2009, SF Express established SF Airlines Co Ltd, China's first private express delivery airline.

The moves signal its ambition to cash in on cross-border online shopping, which is set to boom in coming years, said Xu Yong, principal analyst at China Express and Logistics Consulting.

"As more tech-savvy customers learn to snap up the cheapest possible items online, they may broaden the scope of their searches to include major international online vendors. The need for reliable and affordable cross-border delivery is becoming evident," said Xu.

The value of online exports in the world's top e-commerce markets will grow fivefold to $130 billion by 2020, according to a study by London-based management consultancy OC&C and US-based search engine Google Inc in January.

"Cyber Monday" and "Black Friday" are no longer strange terms to China's price-conscious middle class. A growing number of English-speaking credit card holders have joined the international fray by picking up things that tend to be unavailable or too costly in China.

According to consultancy Bain & Co, more than 50 express companies offer shipping to China, boosting the increase of parallel channels for overseas shopping.

When shoppers buy on a foreign website, they can fill in a local address offered by the courier and transfer the products back to China. The courier makes a tidy profit on shipping fees and commissions.

"I think it is great news for us customers," said Chen Chengzi, a regular overseas online shopper in Shanghai. "I hope the delivery speed could be shortened from the usual one month to ideally 10 to 15 days."

hewei@chinadaily.com.cn