Global logistics major FedEx is expecting eCommerce boom in the coming days to propel its growth in India even as it says that the latter has lagged behind that of Europe in this area.
"Even as the present growth (of eCommerce in India) stood at 1 per cent yet it could touch three per cent by the end of 2025," David Canavan, Vice President, Operations, FedEx Express India told The Pioneer. This, he said, would particularly come about following a boom in online trade or eCommerce growth expected in a big way in India. Canavan, however, refrained from assigning any capex figures towards this by the company. He also did not comment on any future expansion plans of the company even as he said that the eCommerce growth in India was expected with an impending retail boom and that the domestic market was expected to grow at 3 times of the GDP.
"In little over a decade, India is expected to have as many as 18 mega-demand cities with a GDP surpassing $ 20 billion. The internet is also propelling small towns such as Guntur in Andhra Pradesh or Choryasi in Gujarat into the league of top rural hubs for eCommerce in India. That is why we have expanded our network to over 90 per cent of India's manufacturing GDP…" said Canavan.
With an aim towards this the company has said that it has successfully intergrated its recently acquired AFl and UFl businesses in India. Following the integration of the abovesaid companies, FedEx has expanded it service coverage from 4000 postal codes to over 19,000 in India. It has also strengthened its ground transportation service to cover a host of cities and towns across India.
With an aim towards this the company has said that it has successfully intergrated its recently acquired AFl and UFl businesses in India almost three years after acquiring them.
"We have doubled the number of vehicles in the fleet to 1,000, expanded coverage to 19,000 PIN codes from the earlier 4,000 and increased the office and hub space to over 1 million square feet from the earlier 3 lakh square feet," said Canavan.
He said the company will not be investing much in the immediate future and will instead focus on leveraging the advantages gained from the integration. Investments in the future will depend on GDP expansion. Canavan said he is confident that FedEx will grow faster than the industry, although he declined to give details, citing confidentiality concerns on commercial information.
Managing director for marketing Rakesh Shalia said that typically, the ground movement industry will grow 15-20 per cent per annum, while air cargo would grow 10-12 per cent in the near future. The company acquired two domestic market focused companies, AFl and UFl, in 2011 to increase its footprint. Canavan said the integration of the business, which has created a single unit with over 7,000 employees, did not take too long and stressed that final integration was achieved a few months ahead of schedule. He declined to answer questions on the medium-to-long-term outlook for the staff, warehousing space and fleet aspects, limiting himself to saying it will not be looking at any major investments now.