FedEx is letting it be known they are serious about e-commerce and plans to be a major global provider of e-commerce logistics services. In a matter of just two days, the company took steps towards this goal and made two significant acquisitions – Genco, a well-known returns management specialist and Bongo International, a provider of cross-border e-commerce IT solutions.
On average, about 30% of all online transactions are returned and with Genco handling an average of 600m returns a year, Genco seems to be a good fit for FedEx particularly as the company expects to handle a record 290m packages this holiday season.
In addition, FedEx announced the acquisition of Bongo International. According to the Wall Street Journal, Bongo assists e-commerce and other retailers with duty and tax calculations, export compliance management, currency conversions, international payment options inclusive of language translation, shopping cart management and fraud protection. Bongo serves a base of more than 2,000 retailers in Europe, the UK and the US. Maybe not as well known as Genco, nevertheless, its capabilities are just as desired within the e-commerce logistics space. The Boston Consulting Group estimates current cross-border e-commerce revenues at $80m but by 2025 revenues could expand to between $250bn and $350bn. UPS has also taken note of this trend and recently acquired a provider of such services as well.
While the Bongo acquisition will operate as a subsidiary of FedEx Trade Networks, Genco will operate within FedEx Supply Chain.
Certainly it appears the two acquisitions were made to expand FedEx’s e-commerce reach. However, it should be pointed out that the Genco acquisition will also benefit the company’s life sciences solutions. Genco’s healthcare logistics group manages product recalls and FDA approved product destruction. Its website notes that it provides healthcare logistics solutions to 6 of North America’s top 10 healthcare providers and logistics support to more than 75 clients in the pharmaceutical, OTC, medical device and retail market segments.
Genco and Bongo – two good additions for FedEx as it expands not only its e-commerce capabilities but also, as an extra bonus, its life sciences solutions will further benefit thanks to Genco.
For more information and analysis of the mergers and acquisitions market please take a look at Transport Intelligence’s brand new report European Mergers and Acquisitions 2014.
Or if you have any further questions please do not hesitate to contact me directly.
