Leading mail and logistics group Deutsche Post DHL has chosen India to pilot its development in eCommerce for Asia Pacific region. DHL will invest more than 100 million EUR in India over the next two years, to build infrastructure, fulfillment centers, and delivery and payment options through Blue Dart, of which the firm owns 75% stake. DHL aims to be the preferred global provider of e-commerce related services including e-fulfillment and e-facilitation in this region.
Frank Appel, CEO, DHL group says “Globally, e-retail is rapidly evolving. Over the next five years, the global e-commerce sector is expected to grow by more than 10 percent per annum with Asia Pacific leading the way. This region is expected to soon surpass North America and Europe as the biggest online market in the world. As the leading logistics company with an unsurpassed global footprint, there’s a huge opportunity for us to become the world’s leading provider of e-commerce logistics and we have a ready solutions infrastructure in India to pilot our solutions.”
DHL plans to have 15 fulfillment centers in major cities like Delhi, Mumbai and Bangalore and also to expand into Tier 2 and Tier 3 cities like Coimbatore and Jaipur. DHL is also in talks with eCommerce companies like Flipkart, Snapdeal, Jabong etc in regard to BlueDart putting up fulfillment centers for them.
‘Shop The World’, an eCommerce survey conducted by DHL showcases that Indians prefer multiple delivery options and Cash on Delivery features. Indians also expect free delivery for their orders within 5 days. All these are trends that are different from global standards. Also, the return rate of products in India is much higher at 29.5% with reasons being defected goods and poor quality.
Malcolm Monteiro, CEO, DHL eCommerce Asia Pacific said: “With 250 million Internet users, Indian e-commerce remains underdeveloped, with online shopping valued at EUR 2.3 billion in 2013. This is expected to grow to EUR 4.1 billion by 2018, a CAGR of 12.3 per cent in 5 years. All countries across Asia are in different evolutionary stages when it comes to e-commerce. We need to adapt our service portfolio within the region accordingly.”
The majority of Indian e-commerce is from domestic websites like Flipkart, Snapdeal, Amazon India etc., with only a third of consumers having ordered overseas. This trend is expected to change in the future with more people willing to buy products from overseas markets.
Government : IndiaPost Is Best Suited For Delivery
In recent news, Communication and IT Minister Ravi Shankar Prasad mentioned that India Post, with the world’s largest postal network is best suited to offer delivery services to e-commerce firms. With its 1.5lakh strong Post Office connection across india, India post is the best way to connect rural india to eCommerce. Also Namo’s Digital India emphasizes on broadband connectivity in rural India that can lead to increase in use of eCommerce for the rural population. Considering the fact that rural India would not be comfortable with upfront payment for eCommerce products Amazon had initiated the use of India Post as a mode of delivery, reverse logistics and payment collection (CoD accounts for two-thirds of ecommerce transactions) last year.
eCommerce & Logistics
DTDC couriers had launched their logistics division DotZot, logistics company Gati launched their eCommerce hand GatiConnect, Flipkat launched its logistics section for B2C sales called eKart logistics, Delhi-based e-commerce platform for SMEs and retailers Kartrocket opened up its shipping solution Shiprocket, Jabong had started with third party logistics service called JaVas (Jabong Value Added Services) which was later sold to Gurgaon based QuikDel and was later renamed as Gojavas.