DHL eCommerce, a division of the world’s leading logistics company, Deutsche Post DHL Group, is investing EUR70 million (51,184 lakh rupees) to strengthen its operations to meet the fast-growing demand for quality e-commerce logistics services in India. Through its subsidiary, Blue Dart Express, this investment will go into the expansion of its air hubs in Delhi and Mumbai, which are part of its network of 13 air hubs in India. Thus, revealing more about Blue Dart’s future strategies Anil Khanna, Managing Director, Blue Dart Express spoke to Retail360asia on the occasion of announcing DHL eCommerce India plans.
What are your future strategies for the Indian market?
We are creating a business unit to drive growth and focus on B2C market. We are investing a lot in technology, infrastructure and modernisation. We are expanding aggressively, seeing that more demand will pour in from tier II, III and IV cities. We were the first ones to put up the parcel locker in Gurgaon 10 years back and now we are evaluating how, where and when to put up more parcel lockers across the country and for this we are working closely with the retailers.
We are looking to maximise our reach in rural areas. We are doing Sunday and holiday deliveries to offer more convenience to consumers. For environment friendly deliveries in e-commerce segment, we are looking at introducing the e-scooters, e-bicycles and e-tricycles, especially in Delhi and Mumbai, seeing pollution level. We have introduced mobile vans travelling from one location to another for consumer convenience and looking to expand the number of these vans.
Also, we are the first company in India to apply to DGCA to allow us the deliveries from drones and we will get the nod.
What are the investment plans in technology for seamless deliveries?
We are investing a lot in handheld devices, as these devices allow couriers to be in touch with consumers and also be able to talk to them to take alternate delivery instructions. The technology also allows customers to see our courier moving on their screen and also to know when their shipment is delivered.
More importantly, we have put in easy payment options. Today we have 13 e-wallet options available on our handheld devices. Also, we have cards by paying on our devices.
We have introduced Exotel call fetch facility, which allows couriers to talk to their customers and take alternate delivery instructions. We are also offering the slotted deliveries, so that customer can choose when they want their shipments to be delivered.
What are your plans of facility expansion?
We are establishing two big DHL facilities at Mumbai airport and in Delhi, each with the investment of around EUR44 mn and EUR25 mn respectively. It will help us take away the pain of shortage of facility, higher tonnages and faster shipment along with improving efficiencies.
Please elaborate on your plans of tie-up with kirana shops and the department of post?
To have alternate delivery option for our customers, even in remote cities, we are tying up with parcel shops that is Kirana stores and departmental of post while leveraging their infrastructure. So, there is a pilot going on with the department of post. We have already tied-up with the three or four agencies for the parcel shop concept.
What is the ratio of your business coming from tier II and III cities?
Around 70 percent of our business is coming from smaller cities, 30 percent of the business comes from metros and mini metros. Going forward we will also enter tier IV cities. We focus on classical internet e-commerce players, physical retail brands and the brands those are using both these channels.
How long will the reverse logistics keep fuelling the business of deliveries?
Reverse pick up is extremely important in the e-tail industry. In reverse pickups, fashion is as high as 20 percent of the whole deliveries and gadgets like iphone are as low as 2 percent. Overall reverse is about 10 percent as we are told by the retailers. There is no company as of now which has perfect reverse averse product. We have spoken to all the retailers and trying to build a product which will take away all the pains including open reverse and the payment on the spot by March 2017. Very soon we are going to offer UPI as well.
What is your current market share and future projection?
We have already covered 25 percent of the market share and we are aggressively working on expanding our reach to tier II, III cities. We are expanding our reach fast. In the first 7-8 months this year we have added 1000 pincodes, so, from 4300 pincodes that we were servicing earlier, we have grown to 5300 pincodes.
In the last three years we have grown with 103% CAGR, compared to the market growth of 60% and we are sure that we will continue to grow faster than the market. We expect the logistics and parcel delivery market in India to grow from EUR10mn to EUR40 mn by 2020.
What is your take on GST?
GST per say is going to ease a lot of problem, therefore facilitating trade and e-commerce in India. In Delhi and Mumbai we go through 17 check nakas, on every naka we spend 30-60 min which means it takes 10-12 hours of the whole journey, so it brings down the average truck speed of 42-50 km/h. Govt is working swiftly on improving road infrastructure across South, West, North and East corridor. Once the GST is rolled out, these 42 hours will easily come down to 24-25 hours and a lot of cost saving will be done.
India spends 13 percent of its GDP on logistics, whereas the develop countries spend just 8 per cent. So this 5 percent can be saved.
Inputs given to Sunil Pol, Correspondent, Retail360asia