IBEF: October 04, 2019
DHL Express India, an International express service provider, plans to invest Rs 100 crore (US$ 14.31 million) this fiscal year. The investment will be focused on expanding its presence by setting up facility centres and investing in technology.
This investment is part of the €250 million (Rs 1,944.81 crore) that Frank Appel, CEO of Deutsche Post DHL, the world's largest mailing and logistics provider and holding company of DHL Express, had committed as investments in the country till 2020.
India is among the top 10 markets for DHL Express globally and one of the first five business location for Asia Pacific region. The turnover of the DHL Express' global was to the tune of €16 billion (or Rs 1,25,000 crore).
The company has been facing a slowdown in its growth but has no plans of slowing down its investment plans, according to RS Subramanian, Country Manager, DHL Express India. The growth so far of the present fiscal year across logistics players have been registered to around 7-8 per cent.
The investments done this year will be focused on expanding its facilities area for instance where cargo is handled, upgrade of existing smaller facilities to larger ones, adding new vehicles to its fleet, and towards upgrading technology.
The company has around 60-odd facilities across the country having a direct presence in 25-30 cities. The presence in the rest of the country is indirect through agents. The company offers cross-border solutions across industries, including some specialist solutions for the aviation sector, pharma and life sciences. It offers 'express' business, which mainly consist of 20 per cent of documents, and the remaining 80 per cent are parcels.
Mr. Subramanian said, "We are investing at least Rs 100 crore (US$ 14.31 million) in India every year for some two-to-three years now. Yes, compared to 2018-19, there has been a slowdown in growth this fiscal. But it does not mean we have delayed any investments. Our forecast was to grow in double digits, of 10-11 per cent, between 2017 and 2021. We have been in line with the forecast or may be grown 1 per cent ahead of the market."
He added, "The slowdown is a temporary phenomenon because 'express' business in general is more or less resilient to slowdown."
The DHL Express has planned an average increase of 6.9 per cent in shipment price, that will be effective from January 1, 2020.This surge could go up to 15 per cent for shipments of cross border e-commerce, due to higher costs of delivery.
DHL Express India is also focusing on SMEs to involve them in business as it looks to de-risk the overall business. Around 60-64 per cent of its revenues here come from SMEs.
The company is organising workshops and "road shows" to help these SMEs handle on to the increase in e-commerce market. Furthermore, it is also training them in issues regarding tie-ups with payment solution providers, making their websites e-commerce friendly and even setting up their own websites.
Almost 1,700-2,000 SMEs who are trading online - either via B2B or B2C channels - use DHL Express' services.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.