With 60k Indian customers, here's how DHL Express helps SMEs export to 220 countries
The backbone of the Indian economy, SMEs contribute 40 percent of India's total exports, according to data from Small and Medium Business Development Chamber of India and a report by Indian Brand Equity Foundation.
The sector continues to be resilient and adapt to changing global and domestic market realities. However, SMEs face several challenges pertaining to exporting goods and services.
A November 2018 report by the Ministry of Micro, Small and Medium Enterprises titled 'Unlocking the potential of MSME exports' highlighted some of these challenges.
These included, but were not limited to, limited information about products and services in demand, lack of awareness on the working of foreign markets, difficulties in accessing export distribution channels, high logistics costs (airport and shipping charges), and time-consuming documentation processes for compliance with local and international regulations.
It is also worth noting that these challenges are not new. So when American-founded German logistics company DHL International established 'DHL Express' in India in 1979, it was seeking to address some of these problems and make exports easier for SMEs.
Its broader goal was the advancement of the logistics sector, and of trade at large, by bringing to India some of the global best practices in logistics. And it did so through major investments into infrastructure, network, technology, and people.
RS Subramanian, Country Manager, DHL Express India, tells SMBStory:
"Many SMEs do not have logistics experts. Through DHL Express' expertise, SMEs get support in fulfilling these requirements seamlessly, thereby allowing them to focus on maximising their business opportunities, while we take care of the logistics."
RS Subramanian, Country Manager, DHL Express India
Forty years down the line, DHL Express has become a market leader which provides SME customers access to over 700 cities and over 33,000 locations within the country, the company claims. It also says it has over 60,000 customers in India, including importers, exporters, manufacturers, entrepreneurs, and small and medium sized businesses.
Today, 70 percent of DHL Express’ business in India comes from SMEs.
In an exclusive interaction with SMBStory, RS Subramanian explains DHL Express' focus on India and how it is enabling the growth of the country's SMEs.
SMBStory: How is the growth of cross-border ecommerce an opportunity for Indian SMEs?
RS Subramanian: Cross-border ecommerce has developed into a great platform for Indian SMEs. It offers them an opportunity to grow beyond borders, even though they might not have the necessary resources and scale to set up a physical presence in international markets. Its model allows small businesses in India to get direct visibility in the international marketplace without the need for an intermediary or any significant investments.
According to DHL’s 'The 21st Century Spice Trade' report, cross-border e-tailers are managing to boost their sales by an average of 10 to 15 percent by selling internationally. Even beyond 2020, all evidence shows that demand for products from abroad is not going to recede, thereby making it a great opportunity for SMEs to leverage.
The sorting process in a DHL Express facility
SMBS: In the context of selling internationally, how is DHL Express helping Indian SMEs?
RS: We support SMEs through the entire shipping journey and are able to provide guidance on packaging, shipping requirements, customs, and regulatory needs for any of the 220 countries and territories we cover. In addition to our direct network within the country, we use the network of Blue Dart Express - a part of our parent company, to cover smaller towns.
We have a direct presence in all the important SME clusters, which is a critical need as manufacturing bases have increasingly moved into Tier 2 and 3 cities. And in the last two years, we have opened new service centers for direct coverage in 20 key Tier 1 and 2 markets.
We have also established a footprint of over 600 retail service points where a customer can walk in and tender a shipment. Further, our door-to-door offerings ensure that everything, right from pick up to customs clearance processing and deliveries through our global network, are taken care of by us.
Further, our Electronic Shipping Solutions help in shipment and document preparation, compliance with GST and E-way Bill requirements, easy tracking of consignments, and in archiving documentation for easy retrieval.
SMBS: What are some key initiatives taken by DHL Express for this segment of customers?
RS: We support Indian SMEs in multiple ways. We conduct outreach programmes called ‘SME Clinics’ in the key clusters to bring SMEs face-to-face with DHL Express and other experts in finance and government regulations. The goal here is to improve awareness levels among them and to make the trade journey easier to embrace.
Recently, we launched Yellow Yatra, a multi-city series of events, which aims to be a single platform that connects entrepreneurs to a wider ecosystem comprising tax consultants, digital marketers, and experts with deep and enhanced knowledge of online marketplaces, payment gateways, and web development platforms.
We also introduced the ‘On Demand Delivery’ platform. With this offering, Indian SMEs can offer the power of choice to their customers to choose from a range of convenient and flexible delivery options.
This enables a customised shipping experience for the end consumer, which in turn allows sellers to stand out amidst the competition and win customer loyalty. This tool can also be integrated into the seller’s website. Today, 70 percent of all our e-commerce shippers and exporters are leveraging the ‘On Demand Delivery’ service.
DHL Express employees sorting packages for shipping
SMBS: What kind of impact have these initiatives generated?
RS: Today, close to 70 percent of our business comes from SMEs, reflecting growing volumes of cross-border shipments from this segment. For example, one of our SME customers, MSR Garments, makes custom-made suits for a distinguished clientele comprising royalty and international personalities such as Chris Hemsworth, Kelsey Grammer, Noel Gallagher, Chris Rock, and Toby Jones.
Their handmade suits are sold at a minimum price of £1500 in London through Cad & The Dandy, a premium tailoring company that is reputed as one of Savile Row’s best tailors. As 80 percent of their clients order these suits for special occasions that are covered by the global media, on-time delivery is critical due to time constraints and several fitting sessions. This is where DHL Express has supported MSR Garments in meeting deadlines.
SMBS: What advice would you give SMEs to improve their international trade?
RS: While there is massive opportunity for Indian SMEs in international markets, there is also plenty of competition. SMEs should take appropriate guidance and be equipped with the right tools before venturing into cross-border trade. Therefore, they must partner with trusted experts who understand global markets in areas like logistics, customer experience, etc.
It is essential for SMEs to identify where the demand for their product truly lies in international markets instead of choosing already saturated markets. In addition, is it necessary to meet the standards that international customers expect and provide them with a range of flexible delivery options to enhance the customer experience and increase customer loyalty.