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FedEx (FDX) Extends e-Commerce Reach to China and Japan

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In order to boost package delivery in China and Japan, leading freight forwarding company, FedEx Corp.FDX has decided to extend its e-commerce business to the nations.

These Asian nations hold tremendous potential for package delivery firms. Hence, FedEx's decision to strengthen its e-commerce business in China and Japan will certainly help it operate better during peak seasons.

Last year, FedEx bought Bongo International, which allows shoppers to buy goods from international retailers by automatically converting currencies, and customs and shipping costs, based on their locations. After gaining popularity among global e-commerce retailers in the U.S., Europe and Peru, Bongo International - which is being rebranded as FedEx CrossBorder - is eyeing local merchants in China and Japan.

Meanwhile, a close rival United Parcel Service, Inc. UPS has acquired i-Parcel while Pitney Bowes Inc. PBI took over Borderfree Inc. last year. These acquisitions will help the logistic companies cater to international online-shopping retailers better. Hence, FedEx's Bongo International buyout did not come as a surprise as it will help the former consolidate its position in Asian locations, specially in China and Japan.

Recently, FedEx reported third-quarter fiscal 2016 financial results wherein both the top and the bottom line beat the Zacks Consensus Estimate. High demand during the holiday season owing to the e-commerce boom drove the earnings beat.

We are also positive about FedEx's impending acquisition of TNT Express TNTEY . The deal, announced in April last year, is projected to close in the first half of 2016. On closure, the deal is expected to significantly expand FedEx's scale of operations, particularly in Europe. We also expect these initiatives to boost earnings substantially over the next several years and also lend it an edge over its peers.

Currently, FedEx carries a Zacks Rank #3 (Hold).

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PITNEY BOWES IN (PBI): Free Stock Analysis Report

UTD PARCEL SRVC (UPS): Free Stock Analysis Report

FEDEX CORP (FDX): Free Stock Analysis Report

TNT EXPRESS-ADR (TNTEY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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