Market report: DHL in China

29Jan2013

DHL-Sinotrans International Air Courier Ltd. (DHL SINOTRANS) was established in 1986 and is a leader in global express delivery and logistics industry. It is the oldest and most experienced international air express company. In China It is well known as a brand under Deutsche Post World Net. DHL currently operates in over 220 countries and territories across the globe more than any other company in the world. With a workforce exceeding 280,000 employees, the company provides solutions for an almost infinite number of logistics needs. DHL is part of the world’s leading postal and logistics Group, Deutsche Post DHL and encompasses three divisions: DHL Express, DHL Global Forwarding, Freight and DHL Supply Chain.

Development of DHL in China

Since the company was founded till 2006, DHL set up 56 branches in major cities across China. With a highly qualified staff of more than 6,500 workers and operations in 318 major cities throughout China, the company covers 95% of China’s population and economic centers. In 2003, DHL began implementation of the five-year investment plan with a total of 200 million U.S. dollars, in order to improve and upgrade existing facilities. In 2006, on the occasion of the company’s 20th anniversary, DHL released its “China first” strategy. Before the end of 2006, the total number of its joint venture branches expanded from 56 to 72, further improving its network coverage. In addition, DHL has also invested about 2,400 million U.S. dollars to build DHL Building construction in Beijing, which officially opened in 2007. DHL has been ahead of the industry in terms of operating capacity.
DHL is the leader in the international express delivery market in China. From 2002-2006, the annual average growth rate has been maintained between 35-45%. The results of the DHL was generally recognized by the industry, and won three awards including “2006 China Best Call Center.”. Looking to the future, DHL will continue to uphold the “customer first” philosophy, and continue to meet customers’ growing demand for express logistics, leading the air express industry to new heights.

Withdrawal of DHL from China express delivery market

In July 2011, as a result of operating losses and policy uncertainty, DHL’s three domestic courier companies transferred all their shares to Michito Shenzhen Industrial Co., Ltd. Sinotrans Development announced this transaction in July of 2011. A market report in China shows the reason for withdrawal can be attributed to two aspects. First, the domestic express business has too much competition, so foreign express delivery companies lack cost advantage. Second, revised October 1, 2009, the Postal Law Start implementation of provisions of foreign domestic express business may not invest in business letters, while the DHL domestic letters and other documents express occupy its overall business’s volume of 35%.

Daxue China Consultant (market report in China)

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Picture Source: DHL China