DHL seeking Asia expansion
DHL is keen to acquire local rivals or form joint ventures in an effort to double its domestic express business in Asia to tap growing demand for intra-country services.
Dan McHugh, Chief Executive of DHL Express Asia Pacific, said the group plans to lift the revenue contribution from its domestic arm to as much as 16 per cent of the overall total from 8 per cent now, within three to four years.
Demand for rapid delivery of documents and package services in Asia has long been about exporting goods to other countries, it has changed in recent years after a rise in domestic spending prompted a greater need for local services.
The market, however, is crowded and dominated by small local players, who often offer much cheaper services than their international rivals. Still, DHL and other global carriers including FedEx and UPS are eager to take part in the fast-expanding industry, which is expected to grow more than 20 per cent in the next five years.
DHL is keen to acquire local rivals or form joint ventures in an effort to double its domestic express business in Asia to tap growing demand for intra-country services.
Dan McHugh, chief executive of DHL Express Asia Pacific, said the group plans to lift the revenue contribution from its domestic arm to as much as 16 per cent of the overall total from 8 per cent now, within three to four years.
“Domestic consumption and people’s income are increasing. The domestic express business has become much more attractive. Our strategy is to become a much bigger domestic player across Asia, as well as in China,” Mr McHugh said on Monday.
Demand for rapid delivery of documents and package services in Asia has long been about exporting goods to other countries, it has changed in recent years after a rise in domestic spending prompted a greater need for local services.
The market, however, is crowded and dominated by small local players, who often offer much cheaper services than their international rivals. Still, DHL and other global carriers including FedEx and UPS are eager to take part in the fast-expanding industry, which is expected to grow more than 20 per cent in the next five years.
In China, DHL has a joint venture with state-owned Sinotrans and has been operating a domestic express business since 2004.
“Domestic express in China is an absolute must-have,” said Mr McHugh.
In 2004 the group acquired Blue Dart Express, an Indian airfreight carrier, in an attempt to gain leadership in the South Asian country, one of the world’s fastest-growing economies. DHL also has a logistics joint venture there.
Apart from India, DHL has joint venture partnerships in Vietnam, New Zealand and Australia.
Mr McHugh said the company would rely on both joint ventures and acquisitions to further expand its domestic business.
DHL on Monday opened a USD 110m expansion of its cargo-handling hub in Hong Kong, as it vies for a bigger share of Asia’s and China’s budding market for rapid delivery of documents and packages.
DHL expects North Asian countries to account for one-third of global air-express delivery volumes over the next five to seven years.
