19 June 2017

Global courier DHL Express is aiming to increase its investments in the Gulf, as the company looks to take advantage of the fast-growing e-commerce sector in the region, a senior company official said.

The Gulf is one of the fastest rising markets in the e-commerce sector that is expected to amount to around $20 billion by year 2020, according to a report by global consultancy firm AT Kearney. 

Global online retailer Amazon.com in March agreed to buy local provider Dubai-based Souq.com and last month Dubai's Emaar Malls said it will buy a 51 percent stake in local e-commerce fashion website Namshi for $151 million.

“We are excited by it (the rise of e-commerce in the region). It is an opportunity for us,” Senior Vice President and Country Manager for DHL Express in the UAE, Geoff Walsh told Zawya in an interview in May.

“I think it is a business opportunity. The more cross border we have, then the more people shipping around the world, the more we can support and be involved… I think it is going to be a great add-on asset to this industry,” he added.

Mohamed Alabbar, chairman of Dubai’s Emaar Properties, the majority owner of sister firm Emaar Malls, last November announced plans to partner with Saudi Arabia’s Public Investment Fund (PIF) to launch Noon.com with an initial investment of $1 billion. Alabbar had said Noon.com will use Dubai-local courier Aramex to deliver goods.

DHL express, which is part of the German Deutsche Post postal and logistics group, controls around 40 percent of the Middle East market. The leading provider of international door-to door express delivery service has been investing heavily in the Gulf Arab region over the past couple of years, pouring millions of dollars into service centres and operations facilities.

While Walsh said he was not aware of specific talks about prospective deals between DHL and any of the big e-commerce platforms in the region, he stressed that the company was interested to extend its investments in the Middle East.

“Geographically as a logistics hub, Dubai, Abu Dhabi and the UAE as a whole is placed perfectly well, so I think the future is brighter … and I think it is going to be quite positive,” Walsh said, adding that the GCC’s economic slowdown that followed the 2014 drop in the oil prices had leveled out.

It has also recently announced 60 million dirhams ($16.33 million) expansion of its operations at Dubai International Airport, which will be able to process 5,000 shipments per hour. 

Walsh said the company is also looking into investing in a new facility in Dubai World Centre later this year and in similar investments in Abu Dhabi International airport. He did not give further details. DHL has branches in 220 countries including all six GCC countries.

DHL history in the GCC stretches back to several decades. It has been present in the UAE since 1976, six years after the formation of the UAE emirates in 1971. It also serves in other Middle Eastern countries such as Egypt, Turkey, Iran and Iraq.

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