International express service provider DHL Express India is eyeing an investment of ₹100 crore this fiscal, as it looks to expand its presence by setting up facility centres and investing in technology.
The ₹100 crore comes as a part of the €250 million 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 amongst the top 10 markets for DHL Express globally and amongst the first five in the Asia Pacific
region. DHL Express’ global turnover was to the tune of €16 billion (or ₹1,25,000 crore).
According to RS Subramanian, Country Manager, DHL Express India, despite a slowdown in growth the company has no plans of slowing down its investment plans. Growth across logistics players have been to the 7-8 per cent so far this fiscal.
Investments committed his year would go towards expanding its facilities (where cargo is handled), upgrade of existing smaller facilities to larger ones, adding new vehicles to its fleet, and also towards technology.
DHL Express India currently has 60-odd facilities across the country. It has a direct presence in 25-30 cities, while in the rest of the country, it has a presence through agents. The company provides cross-border solutions across industries, including some specialist solutions for the aviation sector, pharma and life sciences. Of its ‘express’ business, 20 per cent are documents, and the remaining 80 per cent are parcels.
“We are investing at least ₹100 crore 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 told BusinessLine.
“The slowdown is a temporary phenomenon because ‘express’ business in general is more or less resilient to slowdown,” Subramanian added.
Incidentally, DHL Express has proposed an average increase of 6.9 per cent in shipment price, effective from January 1, 2020.This increase could go up to 15 per cent for shipments of cross border e-commerce, owing to higher costs of delivery.
DHL Express India is also targeting to bring on board SMEs as it looks to de-risk the business. Nearly 60-64 per cent of its revenues here come from SMEs.
The logistics major is carrying out workshops and “road shows” as it looks to help these SMEs latch on to the e-commerce bandwagon. Moreover, it is looking at training them in issues such as tie-ups with payment solution providers, making their websites e-commerce friendly and even setting up their own websites.
Nearly 1,700-2,000 SMEs who are trading online — either via B2B or B2C channels — use DHL Express’ services.