The holiday season is a natural opportunity to look at the global shipping outlook. In 2015, the global economy is only marginally better than it was in 2014. The mixed-to-down export outlook is offset by growth in cross-border e-commerce and m-commerce demand — a common, ongoing trend in many markets. However, risks to the global outlook still prevail. Those risks include:
·Emerging economies’ near-term growth being softened by low commodity prices and waning consumer demand in China
·A bumpy transition of the China growth model from export to domestic demand
·Economic pressure from geopolitical tensions
That being said, there are still growth opportunities for the shipping carrier industry. The optimism is evident in recent statements about global growth and the business mix made by carrier senior executives. Specifically:
·“International…segment set a new high in second quarter…success…due to robust export growth that remains at 5.5% growth driven by an intra-Europe shipment growth of more than 8.5%…we expect to see positive momentum continuing the second half of the year…”
Richard Peretz, UPS Chief Financial Officer
·“…boxes [are] growing very nicely…Envelopes…are declining…83% of our traffic moves as International Priority…when we’re moving deferred traffic, we’re moving it in a system like our FedEx Trade Networks…our deferred packages now around the world are making us more money.”
David J. Bronczek, FedEx Express President and Chief Executive Officer
Non-Holiday Sales Events
Take a close look at this holiday season and you will see that U.S. retail sales are estimated to grow 12-13% in 2015 compared with 14.4% in 2014. Some of this could be caused by the proliferation of periodic non-holiday sales events in Q3, which could eventually affect traditional holiday spending.
Evidence of this transition from “holiday season” to periodic shopping events can be found in Australia’s Click Frenzy, which saw a 27.7% growth in sales in November 2014 vs. 2013. Amazon Prime Day on July 15, 2015, was global and open to all Prime members as well as new customers who signed up for 30-day trial memberships. These and other similar events will, most likely, be repeated and expanded to include other dates prior to the traditional holiday shopping season.
Another manifestation of this periodic retailer shopping event phenomenon is the online globalization of the holidays. Most of these events will sound familiar:
·Singles Day, November 11, in China, Hong Kong and South Korea
·The aforementioned Click Frenzy on November 17 in Australia
·Black Friday on November 27 in the U.S., U.K., France and South Korea
·Cyber Monday on November 30 in the U.S.,U.K., Australia, France and Japan
·Green Monday and Super Saturday in the U.S. in early December
When you consider the fact that the 2015 holiday season is three shopping days longer than the 2014 season, you see the opportunity for more e- commerce and m-commerce (consumers’ mobile-device-based buying habits) purchases.
Finally, you cannot discuss holiday shipping without looking the programs Alibaba and Amazon are planning and the results they are projecting. Alibaba is looking to grow international trade from other markets to China by partnering with DHL e-commerce and German football club FC Bayer Munchen (Munich). DHL and Alibaba will collaborate on order management and product listings, custom clearance, customer service and local delivery of merchandise to Chinese fans. The partnership between Macy’s and Fung Retailing to sell Macy’s products on Alibaba’s Tmall Global is another good example.
Amazon Prime continues to be a catalyst for driving strong and consistent growth. More than 34 million items sold on Amazon Prime Day last July 15. Amazon expects Q3 2015 sales to grow at least 13% — possibly as much as 24% — above Q3 2014 due, partially, to Prime Day. And Prime membership continues to grow. In 2014, membership grew 53% with 10 million new sign-ups last December alone.
A Successful Season
The international mailing and shipping outlook for this holiday season is bright. Nonetheless, we can’t be sure until we assess the entire season after it concludes. One thing is certain, however. The carrier industry and business service providers are prepared to make this upcoming holiday shopping season a success for all those who ship and receive mail and parcels.
Vincent DeAngelis is Vice President, Postal Relations, Neopost USA. Headquartered in Milford, CT, Neopost USA provides mailing, business communications management and shipping hardware and software solutions. As businesses increasingly move to digital communications, Neopost USA continues to help its customers communicate via physical mail, digital communications and parcels. For more information on Neopost USA, visit www.neopostusa.com.