UPS aims to step its B2C growth in Europe by targeting the large British and German consumermarkets through new subsidiary Kiala amid celebrations of nearly one million ‘My Choice’
subscribers in the USA.The American company bought the Belgian-based e-commerce delivery specialist last month as partof its strategy of growing its B2C activities. Kiala, with revenues of €47 million in 2010, handlesup to 145,000 consumer parcels daily for some 300 companies and distributes through 7,000 ‘shop-in-shop’ collection points in France, its major market, Belgium, Luxembourg, the Netherlandsand Spain. UPS confirmed last month it would initially keep Kiala as an independent company underits existing brand and seek to grow the business.
The next stage will be for Kiala to re-enter the British and German markets in the secondquarter of this year, French newspaper Le Figaro reported. “These are two very large e-commercemarkets,” Kiala founder and managing director Denis Payre, told the newspaper.
UPS Europe spokesman Carsten Helssen told CEP-Research: “We can confirm that UPS is planning todevelop the Kiala model in Germany and the United Kingdom. We would be looking to establish asimilar model to that which already exists in Kiala’s current markets, offering a similar portfolioof products.”
Kiala tried unsuccessfully to gain a foothold in the two very competitive markets as anindependent operator several years ago. But as a UPS business the company should now be in a muchstronger position to establish itself, particularly as UPS could provide physical transportation tothe Kiala parcel delivery points and Kiala could cross-sell to UPS’ large customer base.
One clear option would be for Kiala to use the Mail Boxes Etc (MBE) franchise locations in thetwo countries as parcel delivery points. In Germany, there are some 120 MBE shops offering officeservices, parcel shipping with UPS and also a mailbox service for letters and parcels. There arenow about 100 MBE outlets in the UK and Ireland, which use not only UPS as the primary shipper butalso FedEx, DHL Express, TNT and Royal Mail’s Parcel Worldwide unit.
“Our overall market strategy includes providing an increasing number of convenient locations forcustomers to access UPS products and services. So if an MBE store in Germany, for example, is in acoverage area, certainly it could be considered as a Kiala collection point, provided the store metthe criteria for capacity to hold inventory, technology, scanning, extended operating hours, etc. –the same as any other Kiala point. We already have a great relationship with MBE as UPS shippinglocations, so it would be natural to take them into consideration for expanded Kiala coverage,”Helssen explained.
In the USA and Canada, UPS owns the MBE franchise network and has re-branded the 4,700 outletsinto ‘The UPS Store’. In Europe and other countries worldwide, the MBE network of some 1,300outlets is owned by the Italian Fineffe group but cooperates closely with UPS.
Meanwhile, in the USA, nearly one million consumers have signed up for the new UPS MyChoiceservice since its launch five months ago. In celebration, the company has launched a competitionaiming to break through the one million barrier. US residents signing up for the service by May 1will be entered in a sweepstakes that could provide the winner a free vacation anywhere in theworld.
With UPS My Choice, consumers can schedule their residential deliveries and avoid “sorry wemissed you” notices left on doors. Under the basic free version, registered members receive afree phone, e-mail or text message the day before a package arrives. If the initial deliverytime doesn’t work, there are options to reschedule or reroute the package for a smallfee. There’s also the ability to go online and release packages requiring asignature. Even more control is available with an annual $40 Premium Membership.
