Closely tracking every move of the logistics industry in South-East Asia with tremendous growth of e-Commerce, DHL eCommerce division is up on its toes to tap this hugely untapped region. The company is largely capitalising on factors like changing consumer expectations with last mile delivery, programme managing entire logistics end-to-end while offering export and customer to the retailers. Apart from China and India, the company is betting on Indonesia, which is also considered to the fastest emerging market in SEA region. Thus, unveiling the future course of DHL for Asia Pacific, Malcolm Monteiro, CEO, Asia Pacific, DHL eCommerce, spoke to Retail360.com.
How different is the SEA market from other global markets?
In Asia pacific and SEA, we have many markets where we’re entering expanding at the same time. There is an urgent need of delivery, cross border fulfillment and various variants, depending on the market scenario. We understand the dynamics and continuously observe the market and consumer behavior before tailoring pool of capabilities for that particular market. We share a whole lot of innovations that we do and use in markets like Germany and other European countries. We pick what is relevant for Asia pacific market and offer that to our customers.
What is your observation of changing consumer demand in South-East Asia?
Middle-class in Asia pacific is expected to expand rapidly to about 1.47bn by 2018, so there is a huge opportunity for us. While in South-East Asia the consumer base is rapidly increasing, it is becoming very demanding, when it comes to solutions. Consumer wants plethora of choices, convenience and control on the entire process. In India, some years ago, getting delivery in five days was very acceptable, but today, it is very much on demand, consumer wants immediate delivery with lots of visibility. We try to recognise our consumers and understand what they are really looking for. We see Asia pacific setting base in the next five years on the global retail stage.
Globally, our business is growing really fast with 27 percent increase YOY. So, we have to stay ahead of the curve, both in terms of capacity like distribution centres or airhubs.
How do you programme manage the entire logistics end to end?
Just to take example, a football club in Munich has large fan base in China, around 19 million who wait for their merchandises. So, we put together a solution wherein we programme manage the entire logistics end to end, the official store setup is done by us. Customer service is done by us, we get in the merchandise from Germany, ship it to Hong Kong fulfillment centre, the order gets triggered from a fan in China and we ship it cross border with custom clearance as the final delivery. We also handle the returns management from that very consumer in China, back to the fulfillment centre.
For the retailers, we also do the export clearance from the manufacturing side in China, we supply it from there to India, we custom clear it, fulfill it out of the space in India and then based on the order from where it comes, we trigger the domestic distribution. We offer full visibility and predictability to the consumer. Globally, we are one of the best customer centric and quality services company in Asia pacific.
What have been your recent investments in Asia Pacific?
In china, we recently have invested in developing latest distribution centre in Xinxing. According to the current existing movement of ecommerce, we invest in promising markets. We have recently made investments in the US, three months ago in opening new distribution centre. In India, we are investing in innovative ideas, electric vehicles, slotted deliveries windows or apps that you can use to track your couriers. In future, delivery business is going to be bigger and bigger. We have a clear focus on Asia Pacific and we would continue to invest in markets like China and India.
How big is the e-Commerce market in SEA?
In Asia Pacific India, online retail market is 1 percent of the total retail market and it is pretty much the same in South-Eeast Asia. It is hugely untapped region and fairly fragmented market from the logistics point of view. Thus, recognising the tremendous potential in Asia Pacific, we are taking aggressive steps to ensure that our customers are well supported to tap into the growing e-commerce market. Hence, there is a huge opportunity to play a key role from the quality service perspective.
With last mile delivery, what makes you relevant to the SEA consumers?
We should realise the fact that consumers are so much in control today as far as choices are concerned. The reality fix is that technology is key enabler when we talk about issues like infrastructure, consumer expectations around the world. We still have to understand what makes our service relevant to the consumer when it comes to last mile delivery. Internet is the global phenomenon, relevance of social media and the information is available to all of us around the globe, so this basically brings us aspiration to say the world is our market.
Apart from India, which is the fastest emerging market in SEA?
For us Indonesia is a fantastic market and we predict that going forward Indonesia will become one of the largest ecommerce markets in South-East Asia by 2020. Globally for us, China is the biggest market along with US, UK, France, Japan, South Korea among others.
Inputs given to Sunil Pol, Correspondent, Retail360asia