Foreign express-delivery providers gear up for domestic market
Foreign express-delivery providers gear up for domestic market
The decision by foreign express companies to expand their business in Vietnam reflects the promising market in the country.
In mid-September, DHL-VNPT, a subsidiary of German DHL Group,opened its main office and the southern service center in HCM City. The project, capitalized at $10 million, is the biggest ever investment deal made by DHL in Vietnam.
The DHL’s southern center covers an area of 4,900 square meters, installed with the most advanced equipment and machines. As such, DHL now has two service centers in Hanoi and HCM City, and transit stations in Hai Phong, Da Nang, Dong Nai and Ba Ria – Vung Tau cities and provinces.
DHL has a specialized airplane which flies to HCM City every day, and it also owns 134 vehicles and employs 400 workers meeting international standards, who fulfill 10,000 orders every day.
In April 2014, the company bought 43 Mercedes vehicles. In 2012-2013, it decided to provide five flights more from Hong Kong to HCM City. Since that time, it has provided international express delivery services to Dong Nai and Vung Tau, thanks to flights from the transit stations in Hong Kong.
An analyst noted that DHL has poured $37 million into Vietnam so far, huge investment which has helped it become a well-known express delivery brand in the market.
Jerry Hsu, managing director of DHL Express in Asia Pacific, said since DHL Express made debut in Vietnam 26 years ago, it has obtained two-digit growth rates.
Meanwhile, UPS, a famous US-based express company, decided to buy a 49 percent from VNPost Express, a partner in a joint venture, in mid-2013 it became the first 100 percent foreign owned express company in Vietnam, a move that was thought to be a part of the company’s plan to expand its business in the country.
Domestic companies are worried about the moves by foreign express delivery service providers recently, especially after Vietnam fully opened its doors to foreigners on January 11, 2012.
When UPS turned up in Vietnam in 1994, it teamed up with VNPost Express, a Vietnamese company, to establish a joint venture, in which it held 51 percent of capital.
At the same time, FedEx also began making its presence in Vietnam via a private company and put Airbus A320 into use. The investment allowed FedEx to increase its capacity by five times.
Just a short time later, TNT also arrived in Vietnam, where it joined forces with Viettrans to set up the TNT-Viettrans joint venture.
The analyst said that most of the well-known express delivery companies do business in Vietnam, which shows that they believe there is great potential here.
