Lack of “effective address systems in India and China” is one of the challenges that global logistics players such as DHL face, as they look to capture a larger pie of the growing e-commerce market.

This emerges from a global study on e-tailing commissioned by the Euro 55 billion logistics player DHL.

DHL operates in India through its own subsidiaries as well as through Blue Dart, in which it has a majority stake.

E-commerce could reach well up to 30 per cent (emerging markets) or 40 per cent (developed countries) of the overall trading volume by 2025, according to the study. Logistics companies will act as an enabler for success, it added.

“If we disregard trade barriers such as customs duties and luxury taxes, then suitable infrastructure must develop in the emerging and developing countries. For example, one of the key prerequisites for properly functioning e-commerce is to have effective address systems. This is still a problem which must not be underestimated, even in up-and-coming economies such as those of China and India,” Thomas Kipp, CEO, DHL-eCommerce, stated .

"In India, challenges in infrastructure make regulated deliveries outside of major cities almost impossible," according to Paul H Graham, CEO, Asia Pacific, DHL Supply Chain.

But, it also adds that "in rural districts in emerging countries such as India, speed is not a significant issue. People are content to have a functioning parcel service. What matters is that goods are delivered safely and securely at an affordable price."

That said, the study also noted that “global logistics companies” could not close the local gaps in supply chains quickly, as a result of which many retailers in India and China take care of distribution themselves.

Economies of India, China and Indonesia are key growth drivers for Asia as well as global economy, it further adds.

>mamuni.das@thehindu.co.in

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