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DHL bets Rs 800 crore on on e-tail boom

Wednesday, 27 August 2014 - 7:25am IST | Place: Mumbai | Agency: dna

Its arm Blue Dart Express will invest in developing multiple delivery options including cash on delivery and set up warehouses specifically for e-commerce and SME segments

Deutsche Post DHL (DPDHL), which operates logistics services globally under DHL brand, will invest Rs 800 crore (100 million euros) in the next two years in India mainly to scale up for the opportunity thrown up by e-commerce industry.

Frank Appel, chief executive officer, DPDHL, said, "The plan over the next two years is to invest 100 million euros towards building infrastructure specifically catering to the e-commerce industry as well as SME entrepreneurs in India." E-retailing, he said, is evolving very rapidly across the globe and is expected to grow over 10% annually led by Asia Pacific (APAC) region.

The company executives are in Mumbai to discuss synergies with large trade partners as well as small and medium enterprises (SMEs).

Appel said APAC will soon surpass North America and Europe as the biggest online markets of the world. And with India making a meaningful contribution to APAC's e-commerce growth, DPDHL is looking to bring its entire suite of products, services and solutions to help connect businesses and consumers.

"The APAC region presents a huge opportunity for us and with ready solutions infrastructure in India, a pilot is being done for our e-commerce solutions for the region in India," said Appel.

Part of DPDHL, Blue Dart Express will pilot the e-commerce logistics solutions in India while also creating models for APAC region.

Servicing approximately 34,236 locations in India, Blue Dart Express (part of DPDHL) works very closely with DHL eCommerce and will invest in developing multiple delivery options including cash on delivery capabilities in the country.

"Catering specifically to the e-commerce industry and the SMEs, our eFulfillment centres will launched towards the end of this year (November-December 2014) starting with a 140,000 sq ft facility in Delhi (Gurgaon) followed by 100,000 sq ft facility in Bangalore and another one in Mumbai. Between 13 to 15 smaller facilities will be also be launched across tier II, III and IV markets," said Anil Khanna, managing director, Blue Dart Express Ltd.

Khanna denied being in competition with distribution centre warehouses operated by leading e-commerce market players like Flipkart, Amazon, Snapdeal, Myntra, Jabong, etc.

"In fact, we are in talks with most of the large e-commerce players and they have shown interest in Blue Dart putting up fulfillment centres for them. These centres will help cut down costs significantly by getting closer to the customer thereby shipping/delivering faster," he said adding that deals with e-commerce players will be finalised before launching the Gurgaon facility.

Talking about the contribution from e-commerce logistics as a category to Blue Dart's overall revenues of Rs 19,32.5 crore (Rs 19,325.11 million) for fiscal ended March 2014, Khanna said in January it was roughly 13% of the revenues but has grown significantly to reach a level of 22% in August. "As the industry grows rapidly, we are expecting this percentage to cross 30% by December 2014," said Khanna.

Malcom Monterio, CEO, DHL eCommerce, said, all countries across APAC are in different evolutionary stages and there is a need to adapt the services portfolio within the region accordingly. "As for India, with 250 million internet users the Indian e-commerce remains underdeveloped. Having said that, online shopping is expected to grow at a CAGR of 12.3% to 4.1 billion euros by 2018 from 2.3 billion euros in 2013," he said.

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