German logistics giant DHL is launching its e-commerce focused logistics arm Deutsche Post in India soon. For the launch, the company is on a hiring spree and already hired Neeraj Bansal, as Chief Executive Officer (CEO) for the local operation.
DHL e-commerce has a presence in India for over three years. Since then, it had made investments in the country through parent DPDHL’s Blue Dart Express subsidiary.
Previously, Bansal was regional sales head at Google and served managing director of India and South Asia at AdParlor. The development was first reported by The Economic Times.
Importantly, DHL-owned Bluedart already caters to e-commerce companies, however, experts believe that market is big enough to accommodate both players.
Over the years, logistic companies are riding the wave of e-commerce in India. Currently, there are about half a dozen major players including Delhivery, DotZot, Express Bee, and Ecom Express operating in the space.
Logistics space is going under massive make-over owing to goods & services tax (GST) and infrastructure status to the sector. Unlike previously, many companies are investing in it to optimize current supply chain and efficient transportation.
With GST the government had replaced seven indirect tax heads, including countervailing duty, a special additional duty of customs, excise duty, service tax, central sales tax, value-added tax, octroi and state cesses with one tax on goods and services.
After having infrastructure status to logistics, accessing bank loans for warehousing and cold chain storage would be cheaper and easy.
Recently, the logistics arm of Kishore Biyani’s Future Group, Future Supply Chain Solutions had gone public. Last week, it raised Rs 195 crore by selling shares to institutional investors as part of its anchor book allocation ahead of its Rs 650 crore IPO.
The Indian online retail sector is slated to become $80 billion by 2020, a near five-fold growth over the current $16 billion, as per RedSeer Consulting report.
E-commerce focused logistics along with spending on digital ads are going to increase as the market grows further. It’s a good time for Deutsche Post to make an entry into Indian market. Going forward, it would be interesting to see how Deutsche Post fares up against local competitors.