German logistics company Deutsche Post DHL has announced plans to startup operations in India and will work with parent DPDHL’s BlueDart service in order to develop a direct presence in India.
To that end, former Reliance Infocomm’s Chief Marketing Officer Neeraj Bansal has been roped in to serve as the local Chief Executive of the logistics arm.
The logistics sector has lately seen a huge inflow of capital owing to the recent implementation of the Goods and Service Tax(GST), massive investment in the online retail industry and infrastructural development, all of which promise great growth potential.
DHL ecommerce has previously made many investments in the country through its BlueDart Express subsidiar and is now looking to expand its presence in the delivery based sector.
“DHL ecommerce is actively hiring for the top management in its planned India team. The CEO has been hired. Another four to five positions have been filled. The company aims to launch its India operations by March,” said the company’s spokesperson in a media statement.
Another source close to the development said, “In India, DHL ecommerce will work with BlueDart rather than competing with it. There is enough space and segments in the ecommerce industry for them to coexist”.
The Logistics Sector- Lifeline Of The Online Retail Industry
As per a report released by the Indian Institute of Foreign Trade (IIFT) and the Federation of Indian Chambers of Commerce and Industry-Confederation of Micro, Small and Medium Enterprises, (FICCI- CMSME), the B2C ecommerce market in India is expected to store a potential of $26 Bn. The study also estimates that $2 Bn in revenues can be achieved by 2020.
Further, global logistics giants like Deutsche Post DHL have committed to invest $260 Mn (INR 1673 Cr) over the next 3-4 years in order to expand their logistics business. In September 2016, DHL India entered into an agreement with Alibaba to expand its Trade Facilitation Centre Programme in India.
Also, both Indian and international investors are bullish about the sector, thereby infusing enough money to make the sector grow. For instance, in May 2017, Chinese international conglomerate Fosun International invested $30 Mn (INR 194 Cr) in the local logistics startup Delhivery.
Recently Bengaluru-based truck network platform, 4tigo Network logistics, raised about $10 Mn Series A funding from existing investors Accel Partners and Infosys co-founder Nandan Nilekani.
Logistics has played a crucial role in the growth of online retail in India. Not only has it allowed retailers to reach even the remotest corners, but has also given the ecommerce players the liberty to draw to strategies like instant deliveries. Although leading players have now started with their in-house delivery services, a major chunk of online retailers are still dependent on logistic players like BlueDart, Delhivery, etc to reach their customers. With a lot of initiatives and investments being taken to facilitate peer to peer delivery and services, the local logistics player will surely give DHL a run for their money!