The e-commerce boom has profoundly changed the German parcel delivery market, with the number of parcels transported over the last 20 years growing by over 120% as logistics companies are facing the challenges of continuously growing B2C volumes and changing customer behaviour.
These were the findings of the new study “Innovations in the parcels market – determined by the customer” conducted by the German e-commerce association bevh and MRU GmbH, a consultancy specialised in CEP markets. In 2015 alone, 2.3 billion parcels were transported in Germany, mostly to private customers. This year, around 4.2 billion shipments are expected to be shipped to business or private customers, according to the study.
Last year, the revenues of the courier, express and parcel delivery companies grew by 7% to €9.6 billion in Germany, the study revealed. Especially the B2C parcels segment is profiting from the ongoing e-commerce growth with a market share of 54%. Thus, parcel companies focusing on the B2C segment such as DHL (49% market share) and Hermes (14% market share) dominate the market accounting together for more than half of the entire parcels market. The remaining share is divided between the competitors that are more focused on the B2B segments such as DPD (16% market share), UPS (13% market share) and GLS (8% market share).
“The private shopping behaviour of customers is clearly the main growth driver in the parcel market. And the dynamics of the last years will continue. So we expect another revenue growth of 12% in e-commerce this year,” Christopher Wenk-Fischer, bevh executive director, said, adding: “Growth creates innovations. The customer can choose from a wealth of opportunities today. The most convenient delivery option will very soon influence the purchase decision of the customer and not only the offering. Thus, the customer will also become a decisive process designer of the last mile."
In 2015, according to the study, around 1.25 billion shipments were delivered to German households, which equals 8.6% increase compared to 1.15 billion in 2014, with the geographical distribution of the parcel volumes being similar to the population distribution. Thus, the largest volumes were registered in the German capital Berlin, the country’s largest city (3.5 million inhabitants) with 43.5 million parcels. Rural areas, in particular the newly-formed German states, recorded the lowest parcel volumes.
When looking closer at the product groups, however, regional differences in the population distribution can be observed. This becomes evident, for example, in the product group clothing. With parcels volumes of 270 million, this is the strongest product category in revenue and sales terms in the German interactive trade. Contrary to the assumption that big cities like Berlin, Hamburg or Munich show the highest per capita values, cities like Frankfurt and Mannheim have higher per capita values with 3.9 parcels per capita in 2015, compared to only 3 shipments in Berlin, Hamburg or Munich.
In the course of steady growth both in the e-commerce and parcel markets, a fundamental change in the delivery process is becoming visible, the study further revealed. “The dilemma for the logistics companies consists in adjusting the services to increasingly customised requirements. Therefore, new concepts for the last mile, providers that are new to the market and the changing requirements of the end customers have created a CEP market which, primarily focused on the e-commerce, differs from the previous offerings.”
“A fundamental change of delivery solutions is going hand in hand with these developments, from process orientation towards the end customer-oriented service. The speed of delivery is only one aspect of a needs-oriented flexible process chain," Horst Manner-Romberg, logistics expert and CEO of MRU GmbH, commented. He said that more than half of the online shoppers surveyed prefer day-definite delivery with an agreed time slot rather than same-day delivery.
Another important request of parcel recipients in Germany is to be able to pick up shipments of various providers at a single outlet, around 30% of the respondents have indicated. Until now, parcel firms such as DHL, DPD, GLS or UPS have refused to combine their shops. Only Hermes is thinking about cooperating with Amazon at its own shops.
An emerging trend is grocery deliveries growing by 27% from January to June 2016. Bevh expects that this sector will reach revenues exceeding €1 billion this year.
"Even if a large number of innovative ideas, concepts and projects could neither prove a long-term sustainability in terms of customer acceptance nor in terms of profitability, the new delivery services have the potential to change the image of the market profoundly,” Manner-Romberg added.
Based on the current market study "Interactive trade in Germany 2015" by bevh, MRU GmbH has compiled the new study summarising the current developments and changes in terms of delivery concepts and services. The study has been conducted this year for the fourth time in a row.
