R. S. Subramanian
MD and Senior Vice President DHL Express, India
Inadequate logistics and improper supply chain managements have created huge problems for the smaller players
Mr. R. S. Subramanian talks about the fashion logistics industry in general with Fibre2Fashion correspondent Mary Christine Joy.
Deutsche Post DHL is one of the leading logistics group in the world. It encompasses three divisions - DHL Express, DHL Global Forwarding, Freight and DHL Supply Chain. It has a presence in many countries of the world, including India.
Mr. R. S. Subramanian is also a member of the DHL Asia Pacific Management Board. Prior to his current position, Mr. Subramanian was Vice President - Rest of South Asia (RoSA), where he was handling DHL Express operations in Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan.
At present, what portion of DHL is dedicated to the textile and apparel value chain. Is the textile and apparel value chain a profitable sector for the company?
Since inception in India in 1979, fashion, textile and apparel has been a very important segment for DHL and DHL has been servicing customers in this industry for over 35 years now.
Various industry estimates put the market size of the logistics sector in India to be between USD 90-125 billion, and the fashion and apparel sector is a significant contributor to this. A streamlined supply chain can do wonders for any company, be it a service user or service provider. Across all industries, companies are realizing the strategic importance of value-added supply chain and logistics services.
Is DHL planning to increase its investments in India? Why?
Dr Frank Appel, global chairman of Deutsche Post DHL, was in India in June 2012 and he announced that Deutsche Post DHL will invest up to Euro 300 million (`2,097 crore) in India over the next few years. Dr Appel further detailed the five-pronged strategy for India, which is, to develop free trade houses, create specialized industry verticals, offer products specific to small enterprises, cross-sell DHL brands, and attract talent.
New SVCs: Specifically for the Express business, last year, we inaugurated several new service centre facilities in the country and increased DHL's direct presence in Tier II cities and upcountry locations. This year too we have made investments in new facilities in Vashi, Chennai, Ludhiana and later in the year we are expected to open in Faridabad, Moradabad etc.
New Fleet: Over the last one and half year, we invested in revamping and upgrading our entire ground fleet of vehicles, which are the newly branded DHL vans that pick up and deliver customer shipments within the city.
CIS & CIM: As part of the FOCUS Pillars, motivating our people is fundamental and we invest in them as our most valuable assets. So that we have the right people with the right skills at the right place at the right time, since 2010 DHL Express has made huge investments in training the entire global workforce of 100,000 employees, which includes the over 2,100 employees in India, with the Certified International Specialist (CIS) training initiative and all managers with the Certified International Manager (CIM) programme. These programmes have been externally recognized for its huge success in global implementation leading to a positive cultural change in the company.
Why do you think is India a good market for fashion logistics service providers?
Fashion is the definition of a fast moving industry. India's apparel market is in its peak of change. As the lifestyles of India's prospering urban consumers have evolved, their clothing needs have broadened, reflecting more varied usage occasions.
Rapid growth and rising urbanization have spawned a new class of consumers with more money to spend, and a growing passion for fashion. In India's high-growth, fast-changing retail clothing market, we see significant new growth opportunities for foreign and domestic players.
Multiple seasons, garment products being sourced globally and keeping up with customer delivery requirements, all are of critical importance. Supply chains are extended and complex, as manufacturing moves to lower cost countries.
Southeast Asia holds a good scope for fashion logistics, isn't it? Do you see the fashion industry growing in that region?
Southeast Asia holds an average annual economic growth rate of more than five percent and these countries' diversity lies at the heart of the region's rapid economic growth. Southeast Asia's 11 countries have a combined gross domestic product (GDP) of $1.9 trillion; a population of almost 600 million people; and an average per-capita income nearly equal to China's, according to Southeast Asia. If Southeast Asia were one country, it would be the world's ninth-largest economy. It would also be the most trade-dependent, with a trade-to-GDP ratio in excess of 150 percent. South-East Asia is full of well-heeled shoppers who are fashion forward and voracious in their appetite for luxury goods, but the region is not only an absorber of luxury, nor is it just another factory-housing producer of fast fashion.
Asia has well and truly established itself as a global fashion powerhouse, with much of the world's attention concentrated on China and Japan up till now. Now the focus is expanding to other markets too like Indonesia, Malaysia and the Philippines as the new fashion destinations to watch. These countries too boast dynamic luxury markets that ought not to be underestimated by international brands.
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