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DHL to expand warehousing India, sees e-commerce boosted by GST

INDIA's e-commerce and a new goods and services tax system has prompted Germany's DHL to expand warehousing on the subcontinent.

"We see business-to-consumer as the next big growth area we want to tap," DHL Supply Chain India managing director Vikas Anand told Bloomberg.

The GST scheduled for July 1 is expected to ease e-commerce by getting rid of a web of levies from various levels of government.

Mr Anand sees "multiple opportunities" ahead as companies scattered across India take advantage of local tax breaks resulting from consolidation of taxes into the new GST.

India's e-commerce market, which sees as many as 1.2 million transactions daily, is estimated to jump 31 per cent annually over 2017-2020 to US$80 billion, KPMG said last year.

According to Knight Frank India, the total warehousing space requirement in the country's top seven markets is seen rising to 839 million square feet by 2020 from about 621 million in 2016.

DHL Supply Chain India says its sales have grown at 30 per cent annually over five years, double the contract logistics industry average.

The company has a nine per cent share of the US$3.5 billion Indian market, Mr Anand said.

DHL Supply Chain India plans to invest more than $100 million in additional capacity in the next three to four years, with as much as 65 per cent of that going into warehousing.

The company aims to boost its warehousing space to more than 10 million square feet by 2020 from the current seven million.

Bigger multi-client centres located near metropolitan cities will comprise as much as 70 per cent of the total space and the remainder will be spread across various cities and towns, closer to end-users.