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Logistics firms float e-commerce units to cash in on online retail boom

LiveMint logoLiveMint 13-06-2014 P. R. Sanjai

Mumbai: Deutsche Post AG, which runs one of the world’s top courier brands, Deutsche Post DHL, named Malcolm Monteiro as the new chief executive for Asia-Pacific region of DHL eCommerce.

Monteiro was formerly the managing director of India’s Blue Dart Express Ltd and CEO of DHL Express South Asia since 2006.

This announcement is another step by the company to ride the global momentum in online retail. Last month Deutsche Post had renamed its old mail division as Post—eCommerce—Parcel (PeP). DHL eCommerce is a unit of PeP.

It will focus more efficiently on e-commerce services—both cross-border and domestic—in Asia Pacific as well as in the Americas, DHL said in a statement. “Group-wide, Deutsche Post DHL aims to be the preferred global provider of e-commerce-related services including e-fulfillment and e-facilitation,” it said.

Last month, Flipkart India Pvt. Ltd, India’s largest e-commerce firm, said it is buying rival in the largest-ever deal in the fast-growing Internet business, as Flipkart seeks to extend its lead over rivals and boost its valuation ahead of a potential initial public offering. This is partly in response to aggressive moves by Inc.’s India unit to carve out a larger market share in the country.

The Flipkart-Myntra deal comes amid a strong revival of interest in India’s e-commerce business, which was valued at $3.1 billion, excluding travel services and tickets, according a November 2013 report by brokerage CLSA.

In May, raised $100 million, mostly from new investors including Temasek Holdings Pvt. Ltd, BlackRock Inc. and Premji Invest. This was less than three months after it had received as much as $133.7 million in funding.

DHL is not alone in wanting to tap the e-commerce opportunity.

Rhenus Logistics India Pvt. Ltd has plans to start a unit to cater to e-commerce businesses. “We have secured a small part of handling the e-commerce business of a large online retailer. We are planning to secure more contracts. We are sending our executives to Europe to get specialized training to handle the logistics side of e-commerce business,” said Vivek Arya, managing director at Rhenus Logistics on Wednesday. The company is a joint venture between Germany’s Rhenus Group and Mumbai-based Western Arya Group.

Another company, Mumbai-based DTDC Courier and Cargo Ltd, had floated a separate company, DTDC E-Commerce Logistics Ltd, under the brand name DotZot to handle logistics operations for e-commerce.

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