Deutsche Post DHL plan to snap up Asia Pacific e-commerce market
Deutsche Post DHL has revealed plans to invest in a series of fulfillment centres and delivery systems across the Asia Pacific in order to stake a claim on the fast-growing e-commerce sector in the region. The company announced yesterday in Mumbai that it will pilot the new e-commerce business model for the Asia-Pacific in India, through its majority-owned express company Blue Dart Express.
The new model is not just about providing stock management and delivery, but also e-facilitation and payment services.
It is expected to see about EUR 100m invested in new infrastructure in India over the next two years, with about 15 new fulfillment centres established, including locations such as New Delhi, Bangalore and Mumbai.
Frank Appel, the Deutsche Post DHL chief executive, said the Asia Pacific region was expected to surpass North America and Europe soon as the biggest online market in the world.
“Over the next five years, the global e-commerce sector is expected to grow by more than 10% per annum with Asia Pacific leading the way,” he said.
“As the leading logistics company with an unsurpassed global footprint, there’s a huge opportunity for us to become the world’s leading provider of e-commerce logistics and we have a ready solutions infrastructure in India to pilot our solutions.”
Blue Dart
E-commerce move: (left to right) DHL eCommerce Asia Pacific CEO Malcolm-Monteiro, Deutsche Post DHL CEO Frank-Appel, and Blue Dart Express MD Anil Khanna announcing their plans yesterday in Mumbai
Deutsche Post DHL will work with Blue Dart in India to provide multiple delivery options and cash on delivery capabilities, it said.
Blue Dart already has extensive reach in India with 34,154 locations, but is generally an asset-light company that specialises in the first and last mile. The partnership with Deutsche Post DHL, which owns 75% of Blue Dart, will provide the integrated logistics expertise.
Anil Khanna, Managing Director of Blue Dart Express Ltd, said: “Blue Dart’s unrivaled domestic delivery system and network capabilities in India provide the perfect base for piloting the development of region wide e-commerce solutions. We are working closely with leading brands, market place sellers and retailers tohelp them establish a sustainable e-commerce footprint. That’s why we are investing in the right infrastructure — including IT — to build the right model for consumers and sellers.”
India’s online shoppers tend to favour consumer electronics, fashion and media products, usually shopping through smartphones. Deutsche Post DHL said its research suggested that shoppers expect deliveries within five days, with parcel tracking options and free delivery provided.
Offering cash on delivery or card payment services is also a growth opportunity identified by the German logistics giant.
The company said most Indian e-commerce is domestic, with only a this of consumers having ordered overseas, but nevertheless there is opportunity in international sales, particularly for consumers in India shopping from US sites.
Malcolm Monteiro, the DHL eCommerce Asia Pacific chief executive, said Indian e-commerce remains “underdeveloped”, with the country boasting 250m Internet users making EUR 2.3bn in purchases in 2013 with forecasts for this to grow to EUR 4.1bn by 2018.
“All countries across Asia are in different evolutionary stages when it comes to e-commerce. We need to adapt our service portfolio within the region accordingly,” he said.
