Companies

DHL Express set to beef up Chinese presence

By Lan Lan (China Daily)
Updated: 2010-09-28 09:55

A cyclist rides past a DHL Express delivery truck in Shanghai. Qilai Shen / Bloomberg

BEIJING - Deutsche Post DHL's express division is set to strengthen its market-leading position in China within the next five years as the country presents more opportunities for the logistics sector, said Ken Allen, chief executive officer of DHL Express.

"Chinese mainland will continue to be a major driving force for DHL Express' growth as China remains the export engine for the world. China will eventually be the biggest market for DHL Express," Allen said in an exclusive interview with China Daily on Monday.

China's robust imports have supplied a "fantastic" opportunity for express business, which has close ties with trade, where courier and express services of documents or parcels are required by businesses and private customers, he said.

"Every businessman is talking about importing to China. It's great for us. We can gain with China, the world's biggest importer and exporter," Allen said.

According to the China Transportation and Logistics Industry Outlook (2010-2015), published by US consulting firm AT Kearney and China's Tongji University, China's international express market reached 15.5 billion yuan ($2.32 billion) in revenue in 2009.

As China's economy continues to grow, the express delivery market is expected to maintain a high double-digit growth rate - two to three times of the country's GDP growth, the logistics industry report said.

In August, China's exports increased 34.4 percent on a year-on-year basis while imports rose 35.2 percent for the same period, according to the General Administration of Customs.

To improve its business in China, Allen was recently appointed as a member of the Board of DHL's 50-50 joint venture, DHL-Sinotrans International Air Courier Ltd.

DHL Express will further strengthen its performance in China by investing more in training people and adding service capacities, but the company has no plan for China-related acquisitions and mergers.

"It's not in my plan to acquire anything. We can get great growth from the core business and we have got fantastic cooperation here," Allen said.

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With an investment of $175 million, DHL is building its North Asia Hub in Shanghai, which is due to be completed in the first half of 2012.

High-tech, financial service, fashion and automotive companies are DHL's major customers in China, said Wu Dongming, managing director of DHL-Sinotrans.

Aside from conglomerates and multinationals, DHL is trying to attract more orders from small- and medium-sized enterprises (SMEs) through its worldwide network as Chinese companies are actively exploring emerging markets such as Africa and the Middle East.

Targeting SMEs in key markets such as China, DHL will launch a global advertising campaign from October until December. Meanwhile, DHL has announced a general average price increase of up to 4 percent across the Asia-Pacific region, which will take effect since January 2011.

In China, the price increase is expected to be 2.7 percent, according to a company press release.

DHL Express reported revenue totaling 5.49 billion euros ($7.40 billion) globally in the first half of 2010, up 14.1 percent year-on-year.