DHL Parcel has started its network rollout in Austria with 15 delivery depots and 800 parcel shops as it aims to become the country’s “second-biggest player” but market leader Austrian Post is fighting back with new services while DPD and GLS are also eyeing the country’s B2C market.
The operational launch last week follows the announcement that DHL Parcel will invest over €100 million in its own parcel network in Austria. Deutsche Post DHL’s European parcel division is expanding into markets outside Germany, and is already active in the Benelux states, Poland, the Czech Republic and Slovakia.
DHL’s expansion in Austria comes as DPD, the Austrian B2B market leader, also aims to expand its B2C business through new services and a rival parcel shop network, while Royal Mail subsidiary GLS is developing its B2C services in Austria, too.
Jürgen Gerdes, CEO of DP DHL’s Post – eCommerce – Parcel (PeP) division, told CEP-Research: "We will gradually expand our range of services in Austria in the next few months to offer parcel shippers and recipients even more flexibility. We already have more than 800 DHL parcel shops in all federal states of Austria. By 2016, we want to offer the largest parcel shop network and thus enable every Austrian citizen to reach a DHL Parcel shop within a maximum of 10 minutes."
He added: “In addition to the parcel shops, we will introduce services that provide greater flexibility, transparency and control for the parcel recipient. For example, parcel terminals, deliveries in the evening or on Saturdays are further services that we will offer this year.
"There are already numerous online retailers in Germany who, in addition to deliveries to Germany, serve the Austrian market as well. Through our market offering, we offer these customers the possibility to exploit the quality and service range of DHL Parcel. In the coming years, we want to increase our market share significantly and to become the clear number two in the Austrian B2C parcels market."
As the result of the expansion, DHL Parcel would create around 1,000 new jobs in Austria this year alone, and several thousands in the long term, with the first 80 employees already being hired. “In addition to management and key functions such as marketing and product management, customer service, sales or IT, we are looking at the moment especially for employees to take care of operational processes in parcel processing and delivery," Gerdes said.
DHL Parcel Austria’s Managing Director, Günter Birnstingl, said: “Our aim is to have around 2,000 parcel shops in Austria by the end of 2016. Otherwise, we wouldn’t have any added value compared to the Post.” This is an ambitious aim considering the fact that Austrian Post has ‘only’ 1,800 parcel shops across the country.
But even if the number of DHL Parcel’s shops exceeds that of Austrian Post, DHL Parcel accepts it cannot overtake the postal operator, which has more than 75% of the country’s B2C market, according to a recent report. “Especially in view of the growing e-commerce in Austria, there is enough ‘space’ for several players in the market,” a Deutsche Post DHL spokesman told CEP-Research.
Boris Mayer, DHL Parcel Europe Divisional Manager, explained: “The Austrian parcels market from businesses to consumers (B2C) comprises 60-70 million shipments per year, half of which come from abroad, most of them from Germany. Here, we want to gain a significant share.”
He sees favourable parcel prices that will be about 20% cheaper for Germany and 3-5% cheaper within Austria as a competitive advantage compared to Austrian Post. “We have very simple parcel sizes including S, M and L and there are no additional charges.” Mayer also highlighted the company’s interest in the C2C market, citing eBay as an example.
In response to DHL Parcel’s expansion, Austrian Post CEO Georg Pölzl commented: “The competition through the Germans will lead to an intensified price war”. The local newspaper Wiener Zeitung called it a “battle for each parcel”.
However, an Austrian Post spokesman confirmed to CEP-Research that the postal operator is confident of remaining the leader on the market. He highlighted the potential difficulty of establishing a complete nationwide parcels network in Austria in view of the country’s particular landscape with numerous mountains and valleys, which DHL Parcel will have to deal with.
“We have an existing and well-functioning parcels network with 1,800 shops across Austria. We make sure to provide innovative services such as Saturday deliveries, parcel re-directing, delivery time slot narrowed to three hours, parcel boxes etc. Nevertheless, DHL Parcel, backed by Deutsche Post, is a competitor to be taken seriously,” he concluded.
A new service recently launched by Austrian Post is the delivery on the “desired day” enabling the recipient to delay delivery of a shipment by up to five days. The Saturday delivery service which Austrian Post offers free of charge has initially been piloted in six selected delivery areas serving over 300,000 households, with the aim to extend it all over Austria by the end of the year.
“We have surveyed both shippers and recipients on their opinion about Saturday delivery and have received extremely positive feedback from both sides,” said Peter Umundum, Austrian Post management board member and responsible for the parcels division. In general, low delivery costs, punctual delivery and a relatively exact delivery time slot are the most important factors for online shoppers, he added.
