blue dart express DHL

Mail and logistics group Deutsche Post DHL (DPDHL) has chosen India to pilot its e-commerce logistics business model for Asia-Pacific. This pilot will be through its Indian subsidiary Blue Dart Express in which the company holds 75% stake.

DPDHL CEO Frank Appel told DNA that they will be investing €100 million in the country over the next two years to build the infrastructure for this business.

Blue Dart Express will apparently work closely with DHL’s business unit DHL eCommerce to invest in infrastructure, development of fulfillment centers and developing multiple delivery & payment options including cash on delivery capabilities.

The company plans to open about 15 e-fulfillment centers across major cities in the country, including Delhi NCR, Bangalore and Mumbai. It also plans to set up smaller facilities in tier-II, tier-III and tier-IV markets, including Coimbatore and Jaipur.

Blue Dart Express managing director Anil Khanna told the publication that the e-fulfillment centers are expected to be launched towards the end of this year, starting with a 140,000 sq ft facility in Gurgaon, followed by a 100,000 sq ft facility in Bangalore and a third center will open in Mumbai. He also mentioned that they are also in talks with major e-commerce players in the country for setting up fulfilment centers on their behalf, and these deals are expected to be finalised before the Gurgaon facility opens.

Contribution of E-commerce logistics to Blue Dart revenues

Khanna mentions that e-commerce logistics accounted for 22% of Blue Dart’s revenues in August, up from 13% in January this year and they hope this percentage to cross 30% by December this year.

The company had posted total income of Rs 1,976 crore and a net profit of Rs 122.6 crore for the year ended March 31, 2014. It currently provides logistics services in 34,236 locations across India.

Similar developments in the e-tail logistics space

– In November 2013, courier and logistics company DTDC launched an e-commerce marketplace focused on Indians who want to send gifts to friends and relatives living abroad. The company had earlier launched a logistics solution for e-commerce retailers called DotZot. The service claimed to deliver products to over 8000 pin codes across 2300 cities in the country. Aramex also has a dedicated e-commerce division.

– Distribution and Supply Chain Solution company Gati had also launched an e-commerce website, GatiConnect. Earlier this month, Gati reported in its annual report that its e-commerce division generated revenues of Rs 40.7 crore and recorded a compounded annual growth rate (CAGR) of 130%. As of March 2014, e-commerce contributed 19% of Gati’s overall business.

-Flipkart opened up its logistics arm eKart Logistics to other operators, this year in February. eKart was originally created to serve WS Retail, Flipkart’s B2C side.

– Last year, Delhi-based e-commerce platform for SMEs and retailers Kartrocket opened up its shipping solution Shiprocket as a standalone service to all e-tailers in the country. Shiprocket has integration with FedEx, Blue Dart, Aramex, Delhivery and Firstflight for domestic shipments and FedEx and DHL for international shipments.

Jabong had also launched a third-party logistics service called JaVAS (Jabong Value Added Services), in December 2012, which was later sold to Gurgaon-based QuickDel Logistics and has now been rebranded Gojavas.

-In March 2014, Amazon India had launched a pilot program to test in-store pick up service in association with BPCL’s In & Out stores in Mumbai and Delhi. A month later, Amazon India also started working with local kirana stores in Bangalore to facilitate in-store pick up for products ordered from its website.