SpeedPost has a challenger

I particularly like the idea of new challenger Yamato Transport going into shopping delivery services, online shopping delivery and maintenance supply services. Potential partners engaged in the new delivery services are Takashimaya, Meiji and Isetan and Cold Storage.

SpeedPost has a challenger
Business Times - 09 Jan 2010

Yamato launches Ta-Q-Bin service; eyes 50% market share in 10 years

By VINCENT WEE

YAMATO Transport is taking SingPost head on in the local parcel delivery segment, launching its Ta-Q-Bin service yesterday as an alternative to the latter's SpeedPost service.

Muscling in on SingPost's dominance of the 10 million annual deliveries market, Yamato plans to capture 4 per cent of the pie within the first year and 50 per cent within the next 10 years.

Kaoru Seto, president of parent company Yamato Holdings, said: 'Yamato aims to achieve annual delivery volume of 400,000 parcels in the first year of Ta-Q-Bin's operation in Singapore and hopes to increase the number to 8 million parcels in the next 10 years.'

Yamato has invested 3.1 billion yen (S$46.6 million) initially in the new service with five distribution centres - in Ang Mo Kio, Pasir Panjang, Ubi, Penjuru and Anson Road - and some 40 employees and 26 vehicles.

The company expects to take in 201 million yen in revenue in the first year, break even in three years' time and recover its investments within six years. It expects to be turning over four billion yen from the business within 10 years and is aiming for annual profits of 400 million yen within the same timeframe.

The Ta-Q-Bin service in Singapore will initially start off with three services: basic parcel delivery, chilled and frozen package delivery, and payment on delivery. The latter two services are not offered by current parcel delivery providers, and Yamato aims to price its parcel delivery service very competitively to break into the local market.

Yamato offers a much wider range of services in Japan, which it is working with partners to set up in Singapore as well. These include shopping delivery services, online shopping delivery and maintenance supply services.

Potential partners that it is negotiating with in Singapore are mainly Japanese chains such as Takashimaya, Meiji and Isetan, as well as Cold Storage, said Yamato Transport (S) managing director Naoki Toda. He estimated that it would take 1-2 years to launch these services here.

Other potential areas for growth in Singapore are in the broader business-to-consumer (B2C) market, mail order services and the e-business market, Yamato Transport Co president Makoto Kigawa added.

Yamato is also using Singapore as a springboard to expand into other parts of the region. Potential targets are Malaysia and Thailand, Mr Kigawa said. It is starting a similar service in Shanghai on Jan 18 and will expand to Hong Kong and Beijing from there.

The group plans to invest 10 billion yen on expansion in the region within the next two years. 'We would like to think of Asean as a whole market,' Mr Kigawa said.

While reiterating that Yamato's projections are 'just an ambition', he believed that the group has a 'high chance' of achieving its 10-year forecast.