With focus on smaller markets, here's how DHL is taking MSMEs to the world

With focus on smaller markets, here's how DHL is taking MSMEs to the world

After agriculture, the micro, small and medium enterprises (MSME) sector is the second-largest employment generator in the country, employing 120 million people. With 38 per cent contribution to the nation’s GDP and 40 per cent and 45 per cent share of the overall exports and manufacturing output, respectively, it is easy to see why India is gung-ho about their potential.  

While most among these MSMEs agree that international exposure is vital to realise the potential, data shows that awareness about newer markets to logistical bottlenecks and regulatory hassles — the list of factors that deters these enterprises from taking flight is rather long.

DHL Express, global market leader in the logistics industry, is looking to bridge this gap in the ecosystem. The reason is not far to seek. SMEs account for 70 per cent of DHL’s business; sector growth implies significant, if not proportional, growth for the logistics solution provider. To this end, the company's strategy hinges on three factors —  leveraging its wide national and global footprint, boosting outreach by building presence in smaller markets and expanding existing capabilities. 

But why would MSMEs care? Logistical expenses typically make up 8-10 per cent of the total cost for these firms, so most of them are continually trying to tame such costs. As logistics and transportation expenses take a larger bite out of every sales rupee year on year, it is but natural they would evaluate the benefits of going global against the overall cost of doing business. With a cost-effective logistics system, they can enhance operational efficiency, improve scalability and, therefore, customer satisfaction.

Network and coverage are the two big assets every good logistics player brings to the table. Till about 20 years back, DHL was largely carrying trade documents and small low value samples for exporters. Today, its clients include SMEs across sectors such as textiles, garments, handicrafts, sports goods... you name it. Its network spans 220 territories and together with Blue Dart Express, it covers over 700 cities and towns within India. This means it has the widest footprint with a focused presence in important SME clusters. “We have a total of 53 facilities in India with a presence in both metros and non-metros such as Aurangabad, Madurai, Surat, Roorkee, Jalandhar etc. In areas where we do not have a direct presence, we connect through the network of Blue Dart Express,” says Sandeep Juneja, vice-president, marketing and sales, DHL Express India. 

In the last two years, DHL has opened new service centres for direct coverage in 20 key tier 1 and tier 2 markets. Juneja attributes this to the increasing movement of manufacturing to tier 2 and 3 cities. Last year alone, DHL Express launched six facilities in tier 2 and 3 markets. “Our aim is to cover the length and breadth of the country and enable trade pan India, instead of focusing on a particular region. We will set up a base wherever we see a demand or even a potential opportunity,” says Juneja. 

Tapping “potential opportunity” may also entail educating prospective manufacturers and sellers about the potential in the first place. "When we see such avenues for growth, we shall proactively set up a base and guide people through the process," he adds. 

A significant part of the Rs 850-odd crore investment DHL has committed to India has been used to build its presence in smaller markets and expand its capabilities to support SMEs. The company has designed various outreach programmes specifically for this purpose. Take Yellow Yatra, a platform that gives SME customers access to experts in cross-border e-commerce ecosystem. The company also offers a footprint of over 600 retail service points where a customer can walk in and tender a shipment. 

Apart from beefing up its network, DHL is also working on closing the loop — that is, offer end-to-end solutions. So it manages not just deliveries but also pickups and is easing up customs clearance processing in India and the destination country. In short, the focus is on speeding up a product’s international movement. “Through our electronic shipping solutions, businesses can prepare documents pertaining to shipments, comply with GST requirements and e-way bill in India, and easily track consignments for easy retrieval, if needed,” adds Juneja. 

Knowing that the entire process might overwhelm an SME, DHL is also working with industry bodies to make it as hassle-free as possible. It is working closely with the Express Industry Council of India and customs authorities on reforms such as  elimination of paperwork in the clearing of shipments. Its on-demand delivery (ODD) platform enables sellers to offer their customers a range of flexible delivery options. “Today, 70 per cent of all our e-commerce shippers/exporters are using ODD services. The tool can also be integrated with the seller's website, giving them a distinct edge over competitors,” says Juneja.