We over-invested in India, need to rightsize Blue Dart: DHL Express ecommerce solutions chief

Deutsche Post DHL (DPDHL), the world’s biggest courier service provider, considers India as one of its top markets. But the group has “over invested” in its companies here, specifically its subsidiary Blue Dart, and is now refocusing priorities. Ken Allen, the former CEO of DHL Express and now the chief of its ecommerce solutions segment, talks to ET about his take on global trade and Amazon, how he plans to turn around the segment he now heads, and his plans for India. Edited excerpts:

Does the changing landscape or economic slowdown worry you?
I think one of the difficulties at the moment is in terms of really assessing what's happening to international trade. But then, why are companies like Amazon and Alibaba adding extra aircraft and flying everywhere, right? If there’s a decline in international trade, I think the traditional measurements such as those of GDP are not sufficient anymore.


Do you see Amazon building its own logistics, supply chain and warehousing capabilities as a competition and concern?
Well, Amazon has been an old customer of ours. I think it (their investments in in-house capabilities) started to take off because in their peak period, they had so many problems with the traditional suppliers that they decided that for customer satisfaction, they had to do [it] themselves.

But Amazon is one of our top five customers. It's a great customer-focused company. It's a great artificial intelligence utiliser. If you're providing good services to them, then you can have a symbiotic relationship. But if you let them down, they're going to find their own way to do it.

Your plans for the India business…
In India, we have a great model. If you look at DPDHL in India, we have got the express company, we have DHL global forwarding, DHL supply chain, we've got Blue Dart. Each of them specialises in a particular area. Blue Dart is a great example of a company that just needs to refocus on exactly what it is really good at. Part of the problem that you have with the ecommerce revolution, as it were, is that the growth is so massive that at different price levels you can get as much business as you want.

Do you think Blue Dart needs to re-look at its priorities?
We always look at the right size for the business. I think we over invested — in India, and specifically in Blue Dart — for a while and tried to do things too quickly, and didn't do it with the right level of quality that we normally do.

So, we've had to pull back a little bit. So, we have to make it the right size and then we can build incrementally. We will just make sure that the workforce is the right size. We are just working on that now. There’s been some cutback already.

Is there a cutback on DPDHL’s plans to invest $250 million in India until 2020?
No. I can tell you India is right up there, almost number one in terms of investment and capability.

India is a big growth opportunity. We've been here a long time. And we've got great businesses: every single one of them is a quality leader.