DHL Express, a global logistics major, is experiencing a bounce back in growth momentum in the Indian market amid a bleak outlook for the global business, fueled by an uptick in momentum in the B2C sector. The company expects to have increased growth in 2024, said Travis Cobb, the Executive Vice President of Global Operations and Aviation to businessline.
At present, India accounts for a single-digit percentage of DHL’s overall business, while the DHL Group reported a third-quarter revenue of EUR 19.4 billion.
“Despite initial expectations of a challenging 2023, the Indian market is showing growth, attributed mainly to B2C, particularly during the festival season. B2B is anticipated to gain momentum by the first quarter of 2024,” Cobb stated. While global demand remains slow, merchant exports and imports are still grappling with challenges.
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The logistic player operates 4 gateways, 53 service centers, and 250 retail outlets, providing access to 800 cities and over 13,000 locations in the country. Cobb also highlighted that globally, 2023 was anticipated to be a transition year, with preparedness for the expected slowdown in business post-pandemic.
Again, while global B2C customers are seeing a peak, particularly some of the major Chinese retailers and large e-tailers in the US and UK, there is still a slowdown in B2B customers. ”Hence a lot of inventories have been built up,” he added.
However, as they head into 2024, the company remains optimistic about reducing the inventory levels and expects to see a return to growth in its b2b business sector as well.
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Regarding investments, DHL plans to continue investing in capabilities, people, and service quality. In 2022, DHL announced a €500 million investment over the next five years in India.
“In the last year or so, we’ve expanded five or six of our service facilities across the country. In addition, we are in the process of finishing a big project in Delhi. We also have revamped our entry fleet of 400+ vehicles,” said R S Subramanian, SVP South Asia, DHL Express.
The logistic behemoth sees no long-term challenge; instead, it says that there are just short-term cyclical issues in traditional segments such as fashion, garments, and others. “But otherwise, we see great promise, especially in a market like India,” he noted.