DHL is set to shake up ecommerce logistics in Southeast Asia

Image credit: Sam Churchill.

SingPost, Singapore’s national postage service, was lauded for successfully transforming into a logistics firm. But it’s hardly the first or the biggest. That honor belongs to DHL, which, with a massive US$66 billion in revenue in 2015, makes SingPost look tiny.

Now, the German giant is raising the stakes in the ecommerce logistics battle in Southeast Asia, the home ground of SingPost and other competitors like Ninja Van and aCommerce.

“We want to become a true enabler for the smallest companies to the very largest ecommerce players,” Charles Brewer, the globe-trotting CEO of DHL eCommerce, tells Tech in Asia.

While the US, China, and India have been its three “must-win” markets, it’s increasingly focusing on Southeast Asia.

Charlies Brewer, CEO of DHL eCommerce.

In January this year, DHL eCommerce established a beachhead in Thailand by launching a last-mile fulfilment service, which is basically the stage where an item leaves a warehouse and reaches the consumer’s doorstep.

Naturally, Charles talked up its progress in the country. “The demand is beyond our expectations; way ahead of our plans,” he says, without disclosing specific numbers or any of its customers.

DHL estimates that the Thai market sees about 150,000 parcel deliveries a day, while Malaysia and Vietnam have about 105,000 a day each.

DHL is now deciding which Southeast Asian nation to enter next. “The upside of ecommerce in Southeast Asia is enormous.” Charles adds that while ecommerce forms about five percent of total retail sales in Singapore, it’s more like two percent in the rest of the region.

Massive scale

DHL eCommerce’s advantage over other players is its size, he says. DHL eCommerce is just one of four divisions at DHL. The parent company has a global footprint and every type of logistics service you can think of: picking and packing, supply chain management, last-mile delivery, as well as air and ocean freighting.

“If you are a marketplace and you’re based in Singapore and you’re doing business across 25 countries, you don’t want to have to choose carrier X for country one, carrier Y for country two, and carrier Z for country three,” he says.

No one has cracked the code to last mile fulfilment.

Different strokes