DHL Express, a group company of Deutsche Post DHL, which saw 8 per cent growth in volume terms in the March quarter, is eyeing India’s 7 per cent economic growth and is also exploring introduction of its electric van, StreetScooter, used for delivery of letters and parcels.
The company, which plans to double the production capacity of its own e-vehicles from 10,000 to 20,000 by the end of 2017, sees municipal authorities, strategic partners and large fleet customers in Germany and the rest of Europe, in particular, as potential buyers. Ken Lee, CEO, Asia Pacific, and Rs. Subramanian, Senior V-P and Country Manager, DHL Express Asia, spoke to us on the company’s plans.
Where does India stand in your growth plans?
Ken Lee: From a growth perspective, India presents itself to us as one of the countries with biggest growth areas. Pakistan could be another growth area, but there could be slight concern from the political security perspective. Hong Kong is slightly saturated, though every country has opportunities and challenges.
What is your view on the digitisation push in India?
Lee: The more-developed economies are more transparent, and are slightly more efficient. For developing economies, which are at the start of the digitisation phase, there will be a learning curve. But, eventually they will get there.
What’s your take on the regulatory environment in different countries?
Lee: Last year, the Philippines raised their de-minimis. We are expecting the same for Indonesia this year. So, where they are going, depends on various countries. (De-minimis is minimum dollar value of cargo that can be permitted through duty-free channels).
Would you like the de-minimis to go up?
At this point, we are all focussed on India’s GST reform. There will be opportunities and we are happy to take a lead to work. A higher de-minimis value smoothens the trade flow, allowing products to be “duty free”.
And, to be fair to the government, they cannot give you everything for free. They have to collect some tax revenues. We are not there to dictate. But, we want the government to come out with initiatives that only facilitate trade.
Do you see governments becoming more protectionist?
Lee: No, I do not. Globalisation versus protectionism has been a hot topic in the past five-six months. But, generally, nobody is opposing globalisation. In the context of inequalities in trade, people have been calling for more fair and sustainable trade agreements.
Subramanian: The direction is the same – sometimes it is fast and sometimes it is slow. Globalisation cannot go away, the benefits are here.
Have you felt any impact of the change in the pace of globalisation?
Lee: If there was any change, it would have impacted our business. First quarter, we are doing extremely well…India is expected to grow at 7 per cent till 2020. China is also expected to grow in single digit, but from a very big base. So, growth is seen in a relative context.
Are there any new innovations on the cards?
Lee: We started manufacturing our own StreetScooter. It is not a scooter actually, it is an electric vehicle. We are working with various governments to see how we can work with regulations about registration.
What’s your take on the recent Petya ransomware impact on business?
This should not happen to anybody….. One of our big competitors may have gotten impacted. But, whoever gets affected, there is bound to be a cascading effect. Our antenna is up. We had to make sure our systems were not impacted.
On the positive side, we can be proud that our systems were pretty robust….We have realised one thing, that we cannot take anything for granted. We are watching the cyberspace very carefully.
The IT systems got impacted and people had to go back to paperwork and start depending on phone calls to get business going…
…Which is a pretty sad thing, because digitisation is the way forward.
Not just us, but more and more companies are going to start putting more investments in this area. Even in India, I am really happy that the Prime Minister is driving Digital India, which will take the whole economy to the next level.
