* Deutsche Post aims to help European clients expand in
* Studying entry into business-to-consumer market in China
* Could offer range of export, delivery services
By Marilyn Gerlach
BERLIN, May 23 Deutsche Post is
aiming to tap an expected surge in online shopping in developing
countries by offering clients in its main European markets a
service that can deal with shipping and red tape, as well as
delivering to a customer's door.
Germany's former postal monopoly is best known
internationally for its DHL parcel delivery business, which does
the bulk of its work transporting urgent documents and goods
from one company to another.
But it is keen to win more work from the global boom in
online shopping and believes it can do this by helping internet
companies in Europe to get their goods to markets where
everything from shipping and local duties to household
deliveries can be complicated, time-consuming and expensive.
"There are a few countries in the world where the level of
delivery service is too low and too poor to build e-commerce
business," Deutsche Post board member Juergen Gerdes said in an
interview with Reuters this week, after presenting a study which
suggested e-commerce could make up as much as 40 percent of
total global retail sales by 2025 from 8 percent now.
"We have a few big customers who are looking for better
service quality in terms of parcel delivery," added Gerdes, who
heads the company's Post/eCommerce/Parcel division.
While still focusing on its main European markets, Deutsche
Post plans to grow its so-called business-to-consumer business
(B2C) in India, and is considering expanding it into China.
A spokeswoman declined to identify the company's customers
that are looking to grow beyond Germany and Europe.
But a source familiar with the firm said Zalando, Europe's
biggest online fashion retailer which is considering a possible
flotation; Hamburg-based fashion house Tom Tailor ;
and family-owned Klingel, which sells clothes, shoes, jewellery
and furniture online, were likely to be among them.
Deutsche Post already handles the supply chains for the
three companies, from warehouse logistics to returns management.
E-commerce is expanding at breakneck pace, with online
retail sales in Europe seen doubling from 2012 levels to around
323 billion euros ($438 billion) by 2018, market research firm
Fast-growing emerging markets are expected to follow suit.
Deutsche Post, which went public in 2000 and lost its German
mail monopoly seven years later, makes three-quarters of group
revenues from its DHL logistics business, compensating for the
decline in traditional letter deliveries.
DHL already has extensive experience in emerging markets
through its business-to-business delivery operations.
Its investments of more than $2.5 billion in Asia in
2010-2012, including $175 million for its biggest express hub
located in Shanghai, started to pay off last year, as it grabbed
market share from United Parcel Service and FedEx
to fortify its number one position in the region.
However, Deutsche Post is still cautious about venturing
into B2C services in China.
"It makes sense to install some activities there. China is
one of the biggest countries in the world. It's a very difficult
question if and how we can start some activities there. It is
difficult even though DHL is a dominant player there, as the B2C
business has very challenging requirements," Gerdes said.
While DHL can easily handle the warehousing and incoming
goods shipped by containers and planes, deliveries to
residential houses that lack zip codes and buyers who want
couriers to wait until the recipient has checked whether fashion
products ordered are the right size can be daunting.
"Can you just imagine your courier standing there for five
minutes while the buyer is trying on (to see) if the shirt fits
him?" DHL e-Commerce CEO Thomas Kipp told reporters at a
presentation on challenges in emerging markets on Tuesday.
Nonetheless, there is a big opportunity, and Deutsche Post
has growth targets to meet.
Kipp said online sales in China were expected to reach 228
billion euros in 2018, compared with 75 billion last year.
Last month, Deutsche Post unveiled medium-term financial
goals and forecast annual operating profit to rise by an average
of more than 8 percent through 2020 - due in large part to DHL's
expansion in emerging markets and to e-commerce.
(Additional reporting by Emma Thomasson; Editing by Mark