Deutsche Post DHL plans to invest €100 million in India over the next two years to target thecountry’s fast-growing e-commerce market in the latest stage of its Asia Pacific expansion.
The company said it has chosen India to pilot the development of its e-commerce business modelfor Asia-Pacific through its subsidiary Blue Dart Express, already a national leader indoor-to-door delivery.
DP DHL CEO Frank Appel announced at a news conference in New Delhi yesterday that the group willinvest €100 million in new facilities and fleet expansion in the country over the next twoyears.
“Globally, e-retail is rapidly evolving. Over the next five years, the global e-commerce sectoris expected to grow by more than 10% per annum with Asia Pacific leading the way. This region isexpected to soon surpass North America and Europe as the biggest online market in the world,” hesaid. “As the leading logistics company with an unsurpassed global footprint, there’s a hugeopportunity for us to become the world’s leading provider of e-commerce logistics and we have aready solutions infrastructure in India to pilot our solutions.”
Malcolm Monteiro, CEO, DHL eCommerce Asia Pacific, said: “With 250 million Internet users,Indian e-commerce remains underdeveloped, with online shopping valued at €2.3 billion in 2013.This is expected to grow to €4.1 billion by 2018, a CAGR of 12.3% in 5 years. All countriesacross Asia are in different evolutionary stages when it comes to e-commerce. We need to adapt ourservice portfolio within the region accordingly.”
DHL eCommerce is investing in infrastructure and the development of fulfillment centers,multiple delivery and payment options as part of its aim to become the preferred global provider ofe-commerce related services including e-fulfillment and e-facilitation.
Blue Dart Express is well positioned to pilot e-commerce in India and models for Asia Pacific,according to the group. The leader in door-to-door delivery solutions and South Asia’spremier express air and integrated transportation and distribution company, Blue Dart services over34,154 locations across the sub-continent.
In India, DHL eCommerce, working closely through Blue Dart, will invest in developing multipledelivery options and cash on delivery capabilities. These two key needs were identified by India’stop online shoppers – male, high-income, young urbanites – as part of a 20-country consumer surveyon international distance selling ‘Shop the World’, carried out by DHL eCommerce to provide adeeper understanding of the home shoppers’ journey.
Anil Khanna, Managing Director of Blue Dart Express Ltd, said: “Blue Dart’s unrivaled domesticdelivery system and network capabilities in India provide the perfect base for piloting thedevelopment of region wide e-commerce solutions. We are working closely with leading brands, marketplace sellers and retailers tohelp them establish a sustainable e-commerce footprint. That’s why weare investing in the right infrastructure -including IT – to build the right model for consumersand sellers.”
Indian media cited Khanna as saying that the group plans to open 15 e-fullfilment centres tofacilitate e-commerce business in metros including New Delhi, Bangalore and Mumbai. There are alsoplans to start such centres in Tier-II and Tier-III cities including Coimbatore and Jaipur. Headded that leading e-retailers such as Flipkart and Amazon have shown interest in using thefulfillment centres to expand their operational network.
In addition, Blue Dart Aviation plans to add another B757 freighter next year giving it a fleetof six all-cargo planes.
According to the ‘Shop the World’ report, online purchases in India are limited largely toconsumer electronics, fashion and media products with shopping by smart phone the norm. Indians’main reasons for online shopping are overcoming geographical restrictions on choice and unlimitedshopping hours – although the biggest negative was unknown quality of online products. E-shoppersin India revealed delivery expectations that were higher than the global average. Despite thecountry’s size, Indian shoppers expect delivery within 5 days (global average 6.5 days), parceltracking options and free delivery. The average rate of return of goods also scored higher than theglobal average at 29.5 per cent with poor quality or defects the number one reason for returns.
The survey also identified growth opportunities in the development of online payment systems –cash on delivery or cards being India’s top payment choice – and in international sales. Themajority of Indian e-commerce is domestic with only a third of consumers having ordered overseas.This is set to grow with more than half planning to place an international online order with USbeing the number one target market.
