DHL eCommerce, a division of global logistics company Deutsche Post DHL Group, launched its domestic delivery operations in Malaysia on April 27. DHL eCommerce offers a range of customer-centric services catered to Malaysia’s growing e-commerce market, including cross-border shipping solutions and a network of global fulfillment centers.
According to DHL eCommerce Asia Pacific CEO Malcolm Monteiro, the huge growth potential for e-commerce in Malaysia means that businesses need high-quality logistics solutions – there are approximately seven million people shopping online every month and the industry is expected to grow to about US$1.09 billion in Malaysia and US$1 trillion globally by 2020.
Monteiro says that with the Malaysian government already seizing the opportunity to drive e-commerce growth through initiatives such as the National eCommerce Strategic Roadmap and the new Digital Free Trade Zone, an exciting ecosystem is forming.
“Logistics is a key component of this ecosystem, and e-commerce is a vital component of the growth agenda, so we will continue to invest in e-commerce here and worldwide,” he says.
DHL eCommerce’s investment in Malaysia includes a 48,000 sq ft central distribution hub, four depots – one in Penang in the north, one in Johor in the south and two in the central state of Selangor in Cheras and Puchong – and a felt of two-wheel and four-wheel vehicles that will provide next-day delivery to all urban areas in the Klang Valley, Penang and Johor Bahru, and two- to four-day delivery to all other locations across Malaysia.
DHL has set up DHL eCommerce as a separate entity that is focused solely on the B2C market because this is what the company believes will drive the overall growth of e-commerce worldwide.
“E-commerce is fantastic, exciting and sexy,” says DHL eCommerce CEO Charles Brewer, adding that it is “the place to be” for the next two decades.
Brewer illustrates with statistics that show the massive growth in the e-commerce space: currently global online retail is about 8 or 9% total retail, and this is expected to grow to 12.8% by 2019.
In Indonesia, 0.5% of all things purchased are bought online, which translates to more than 400,000 packages a day. In Malaysia, this is 5%, which is about 800,000 packages a day. The value of domestic and cross-border e-commerce transactions worldwide will reach US$3.4 trillion in 2020.
The average annual spend of an e-shopper last year was calculated to be US$1,582. Interestingly, 47% of online shoppers expect free shipping.
Brewer says that because of consumer expectations being what they are – shoppers want delivery when (next-day and on-time) and where (any address they specify) they want – fulfillment from logistics companies is about pushing the product as close to the customer as possible and providing excellent last-mile delivery services.
“This is why we exist. The real battleground of e-commerce today is in last-mile delivery,” he says, going on to say that with shopping being an emotional experience for the consumer, DHL eCommerce is striving to make the last mile experience as fantastic for consumers as the order process.
This attention to consumer experience is worthwhile because it positions DHL eCommerce as a trusted logistics service provider to e-commerce merchants. Managing director of DHL eCommerce Malaysia Jason Kong points out that consumers often attribute a failure in delivery to the merchant and not the logistics partner. “It is important to have a logistics partner who can successfully bridge the customer experience from the time they buy the product on the website to when they receive it.”
This view is echoed by Tengku Chanela Jamidah, co-founder of Dida, a Malaysia-based online cosmetics company, who says that one of the biggest challenges Dida faces as an e-commerce company is a delivery, and delivery of products on-time and in good condition, especially in secondary cities and outside of urban areas.
“Sometimes logistics service providers do not cover the areas your customers are in, which leads to unhappy customers. This reflects negatively on the business, and the negativity is instant. At the end of the day, you want your customers to be happy so you must consider the last-mile requirement as well,” she says.
Dida is not currently using DHL eCommerce but is exploring the possibility of a partnership.
Logistics services play a part in making this kind of last-mile experience possible by delivering faster, more efficiently and providing a quality service. “We deliver with a smile,” quips Brewer.
He reveals that in setting up DHL eCommerce worldwide, one lesson learned was that the faster the deliveries are made and the better the service is, the higher the chance of the consumer becoming a repeat customer.
In the bigger picture, Brewer says that DHL eCommerce is a game-changer in that it is a purely B2C operator and it understands what the e-commerce merchant is trying to achieve with its customer. “The real value we bring is that we are going to listen very hard, we are flexible and agile, and we have great solutions.”
“E-commerce is huge and we are only at the starting point of the journey. This is going to be fun and exciting.”