Deutsche Post DHL searching for mainland partner to expand package delivery scale

PUBLISHED : Monday, 24 July, 2017, 10:18am
UPDATED : Monday, 24 July, 2017, 11:00pm

Deutsche Post DHL, Europe’s biggest mail and express company, is looking to partner with a mainland delivery counterpart to help cope with the surging volume of European goods shipped into China as part of the fulfilment of online shopping.

Zheng Zhi, managing director of DHL’s e-commerce operations in greater China, said that the company will need to ensure prompt and safe deliveries of imported goods to the doors of mainland purchasers.

“We are studying the possibility of forming a tie with a local partner,” he said. “We believe it is conducive to work with strong local delivery companies to explore the potential arising from the cross-border e-commerce.”

DHL’s interest in a local tie-up follows the creation of a joint venture in May between United Parcel Services and SF Holdings, parent of Shanghai-listed SF Express.

The growth of China’s e-commerce sector has bolstered the expansion of the country’s five largest express delivery companies including SF, YTO Express, STO Express and Yunda Express.

Cross-border online shopping is becoming a new growth engine for the mainland’s e-commerce sector as Chinese consumers splash out on foreign-made goods, especially in the categories of cosmetics and personal care; baby food, health care and consumer electronics.

According to AliResearch, the think tank affiliated with Alibaba Group, the mainland’s cross-border e-commerce market is expected to hit 12 trillion yuan (US$1.76 trillion) by 2020.

“Efficient logistics services move the goods fast and eventually benefit the buyers,” said Xiong Hao, assistant general manager at Shanghai Jump International Shipping. “It is time for global and domestic logistics companies to carefully study how to improve their infrastructures and fine-tune management systems to embrace the rapidly-growing market.”

Zheng did not disclose what kind of alliance his company was seeking, nor the names of potential partners.

In March 2016, Chinese authorities including the General Administration of Customs published a list of more than 1,100 items that could by imported by e-tailers in a move to tighten regulation on cross-border e-commerce.

China’s cross-border e-commerce trade facing uncertainties amid government regulation

The new rules required stricter custom procedures, including lengthy and meticulous inspections of imported goods that have never made it to the mainland market before.

The custom authorities, facing complaints from hundreds of e-tailers, opted to delay implementation of the new rule to late 2017, giving the companies a grace period to comply with the tightened rules.

DHL, as an official partner with European soccer powerhouse FC Bayern Munich, provides logistics services for the club’s online flagship store on Alibaba’s Tmall Global.

“Our strategic aspiration is to become the leader in e-commerce-related logistics within the Asia-Pacific region,” said Juergen Gerdes, executive board member of DHL.

Alibaba is the owner of the South China Morning Post.