Executive Briefings

DHL to Expand India Warehouses on E-Commerce Boom, New Sales Tax

India's bustling e-commerce transactions and a planned new national tax system that's expected to boost freight movement are prompting Deutsche Post DHL Group to expand warehouse capacity in one of the world's fastest growing major economies.

"We see business-to-consumer as the next big challenge, a big growth area and we really want to tap into that through businesses such as modern retail," said Vikas Anand, Mumbai-based managing director at DHL Supply Chain India Pvt.

The national goods and services tax, scheduled for implementation on July 1, is seen increasing the ease of doing business by getting rid of a web of levies divided among various city, state and federal governments. Anand sees "multiple opportunities," as many companies with factories currently scattered across various states in order to take advantage of local tax breaks are expected to consolidate operations after the GST rollout.

India’s e-commerce market, which sees as many as 1.2 million transactions daily, is estimated to jump 31 percent annually over 2017-2020 to $80bn, KPMG said in an Aug. 2016 report. According to Knight Frank India Pvt., the total warehousing space requirement in the country’s top seven markets is seen rising to 839 million square feet by 2020 from about 621 million in 2016.

DHL Supply Chain India says its sales have grown at about 30 percent annually over the past five years, double its estimate of the contract-logistics industry average, and the company expects to maintain its brisk pace. The company has an 8 percent to 10 percent share of the $3.5bn Indian market, Anand said.

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"We see business-to-consumer as the next big challenge, a big growth area and we really want to tap into that through businesses such as modern retail," said Vikas Anand, Mumbai-based managing director at DHL Supply Chain India Pvt.

The national goods and services tax, scheduled for implementation on July 1, is seen increasing the ease of doing business by getting rid of a web of levies divided among various city, state and federal governments. Anand sees "multiple opportunities," as many companies with factories currently scattered across various states in order to take advantage of local tax breaks are expected to consolidate operations after the GST rollout.

India’s e-commerce market, which sees as many as 1.2 million transactions daily, is estimated to jump 31 percent annually over 2017-2020 to $80bn, KPMG said in an Aug. 2016 report. According to Knight Frank India Pvt., the total warehousing space requirement in the country’s top seven markets is seen rising to 839 million square feet by 2020 from about 621 million in 2016.

DHL Supply Chain India says its sales have grown at about 30 percent annually over the past five years, double its estimate of the contract-logistics industry average, and the company expects to maintain its brisk pace. The company has an 8 percent to 10 percent share of the $3.5bn Indian market, Anand said.

Read Full Article