German-based B2C parcels operator Hermes has entered the Russian consumer parcels market underits European expansion strategy.
The company has formed an alliance with a Moscow-based supermarket chain and set up 10 ParcelShops, Hanjo Schneider, Otto Group logistics board member and head of Hermes Europe, told Germanmagazine ONEtoONE in an interview. “Once that has started well, we will make a gradual rollout,” hesaid.
The Russian parcels market will be difficult due to the geographical distances, “chaotic”traffic conditions in Moscow and other factors, but offers “unbelievable opportunities”, Schneidercommented. “In the cities we want to offer a maximum delivery time of seven days,” he said.
Schneider described Russia as “one of our most exciting projects” for the coming years. The OttoGroup, the parent company of Hermes, is already the country’s mail-order market leader and recentlytook over Quelle Russia to secure its long-term leadership, he pointed out. “Russia is asignificant growth market, where we see plenty of potential,” he commented.
Addressing the German market, Schneider said that Hermes Germany is likely to grow 8%-10% in2009-10 contrary to the market trend. “Growth in distance trading in Germany will continue further,driven by e-commerce,” he predicted. “I do not exclude distance trading’s share of the overallretail market doubling in the next 10 years,” he declared. “There is plenty of potential forgrowth.”
In Europe as a whole, Hermes has revenues of about €1.5 billion and now has a 25% share of the(consumer) parcels market compared to 22% last year, Schneider stated. “We are simply growingfaster than the market.”
In Austria, the company has stabilised its business through a last-mile delivery cooperation andwill increase the number of parcel shops from the current 1,200 to 1,600, he said. “I think theAustrian market will recover in the next 2-3 years.”
