In an interview with SupportBiz.com, R.S.Subramanian, country manager, DHL Express India, talks about the relationship between the logistics industry and SMEs. Edited excerpts:
How important are SME-customers for DHL Express?
SMEs are an important area for DHL in India. SMEs contribute around 40 percent of our total revenue from the country. This figure itself shows how important and critical this segment is for our business.
Our relation with this industry is so deep that if SMEs grow, we continue to grow. We want this to happen and we will be there in the market to help India’s SMEs, as they grow.
Why is the SME segment important?
The SME segment is witnessing a lot of action over last few years. It will continue to remain vibrant as it is a significant contributor to the country’s GDP. The opportunity for logistics firms lies in the fact that Indian SMEs are tapping the domestic and the international. Despite the economic slowdown, India’s SMEs are graduating towards growth in a significant way.
SMEs face several challenges and they must be addressed carefully. Challenges like availability the of finance, access to expertise and marketing are affecting SME growth.
Do costs figure high when SMEs choose a logistics partner?
Yes, cost is a critical factor. But ultimately, SMEs do evaluate the value that is offered. Cost structures may vary but the overall value has to be visible to the client. Whenever we get a response about DHL being expensive, we emphasize on the value and standards that we bring to the table. In today’s business, especially with respect to logistics, speed and security of shipment is valued. When we show SMEs our capabilities on these fronts, customers are convinced.
What drives the adoption of logistics among SMEs?
It depends upon the nature of the business. If a business requires delivery quickly along with security of its products, companies go for solutions such as DHL. Sometimes compliance from the buyer’s side also drives the adoption of a logistics solution that complies with international standards.
Your thoughts on e-commerce and online marketing?
It is an important trend that is getting visible day-by-day. Businesses are targeting the domestic market with cost effective marketing solutions through the e-commerce route. But while the deal is executed online the fulfilment of the deal has to happen offline. So, it is important for SMEs to ensure effective offline fulfilment of any deal, keeping the end customer happy. The cash-on-delivery model is also a great enabler in this field. While DHL Express does not focus on this area, our sister concern Blue Dart offers solutions for cash-on-delivery.