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TNT sees opportunities and challenges in China

Tags: Excerpts from the Windmill

SHANGHAI, China - Dutch postal giant TNT, the former state-owned PTT, hopes that its investments in China will propel it into a leading parcel delivery service there just as it is in Europe. Active in many countries, TNT already planned to invest $292 million in China in 2004. While the postal market in Europe is shrinking because of electronic mail and sharp competition, the Chinese market has grown by nearly double digit percentages for many years. The export-driven economy especially is of interest to TNT, since foreign trade frequently requires courier services. Earlier this year, TNT acquired Chinese courier Hoau and boosted its investments in a automated distribution centre in Shanghai. China also presents TNT with numerous challenges. Laws and regulations differ from region to region in China while there also is an overabundant bureaucracy and a range of taxation systems. Automation works up to a point in China, since business is also required to keep paper trails of everything. It took TNT two years to obtain regulatory approval for the Hoau acquisition, the largest Chinese courier.