Jerry Hsu is CEO, DHL Express Asia Pacific and a member of the DHL Express Global Management Board. Based in Hong Kong, he is responsible for China, Japan, Korea, Hong Kong, Taiwan, South East Asia, India and South Asia, Oceania and other markets in the region. Under his stewardship DHL Express became the No. 1 player in the area’s key markets of Hong Kong and Taiwan, as well as in China, the company's fastest-growing market. With Europe seemingly heading back into recession and the US still to convince that its economy is improving, the company is looking at Asia as its growth driver. Hsu spoke to Barsali Bhattacharyya about DHL’s plans for the Indian market in a recent visit to India. Excerpts.
The fortunes of the logistics industry are closely linked to the economic cycle. How has DHL been affected by the current economic scenario?
I keep telling people, we are exceptions. We are not the regular mom-and-pop stores; we are the market-dominant force. Yes, there are a lot of problems, especially in Europe and in the US. But in Asia we are growing as fast as the market and doing way better than competition. There is a very optimistic view in my team that this year we’ll surpass the growth of the market.
What makes you so optimistic?
Our brand is stronger; our investments are paying off better. Our people are well trained and capable of meeting any challenge they may come their way. I don’t think there is any big threat to the Asian market. India is forecasting 7.2 per cent GDP growth and China aims for 8.5 per cent. These numbers are heavenly when compared to Europe. So if the two large engines in Asia are forecasting good growth, then I believe we’ll do well.
I’m optimistic and confident, and that’s because we have great infrastructure and reach. Our employees are extremely dedicated and talented. This did not come naturally, but through proper investment.
In fact, they were trained last year through the International Specialists programme. It is a wonderful alignment between management and workers that give us an edge over the rest and help us build a strong team.
How has the International Specialists campaign (Speed of Yellow) helped in all this?
You said you don’t think there is any big threat to the Asian market. Specifically, how do you feel about India as a logistics market?
I’m hopeful of the Indian market. If China can achieve such a tremendous growth in 20 years, India ought to do it faster. You must appreciate how much more informed your people are. And that is an edge over China, which restricts free flow of information. China has very good GDP, great investments, foreign reserves, but they suffer from issues like poor social justice, rural-urban disparity, uneven wealth distribution. There is more acceptance and less conflict in India. I go around the world, I’ve seen the Arab spring and I can’t even compare India to that. If you look at governments of Greece or Ireland, you will realise what a fine job your government is doing.
We’ve the best team here in India. Our employees are eager to innovate and perform. I’m optimistic not only about our industry but also of India. I believe in looking at the long term. And when it comes to long term success, I see a lot of promise in India.
Logistics is a backstage role. One normally checks out products in a showroom or receives parcels and letters but don’t seem to care about how the things actually get there. In such a scenario how important is brand-building in the logistics industry?
Brand-building is crucial especially in this age of e-commerce. People need to understand our capabilities and reliability. Only then will they trust us with their shipments. To that end, we will do lot more advertising this year on TV, print, digital and radio. There will be some India-specific ads as well. We might be a little expensive, but we do it best.
You entered into quite a few strategic brand tie-ups and sponsorships in 2011. What’s in store in 2012?
That’s right. We have tied up with fashion weeks across the world. We are the official logistics partner of Manchester United, Volvo Ocean Race, the Rugby World Cup and The Leipzig Gewandhaus Orchestra. In fact, we are beginning the DHL Champions Trophy Tour 2012 from New Delhi. This is an effort to showcase DHL’s behind-the-scene operations and provide fans in over 27 global destinations a chance to see the Premier League trophy. We are also involved with the Formula 1 as we believe in speed. These tie ups help us showcase our brand. If you think carefully, all these events involve huge complexity. In Formula 1, the kit has to move from one circuit to another within a very short duration. And it is DHL which makes that possible. These tie-ups are intended to demonstrate our role in helping some important global events.
The social media space has seen phenomenal growth in India. How do you plan to use that to your benefit?
Social media is here to stay. One has to understand what our customers are doing there, what they are saying and be ready to respond accordingly. We are using it to reach our customers and listen to what they have to share. We use the net promoter approach to listen to our customers in real time and understand what they think of our services.
The social media can also be used to reach out to inform customers about our services and offers. We have strong presence on Facebook. We have a service for students called University Express to assist students applying for higher studies overseas. This service has gained great popularity through the social media. Last year we had a corporate social responsibility programme in New Delhi, where we collected used books and toys and distributed these among underprivileged children through local NGOs.
Most logistics companies talk of simplifying operations and providing more value to customers in their communication. What is DHL doing on this front?
We are simplifying operations to reduce costs and make our customers live easy. There are a lot of issues regarding aviation, billing, courier and custom clearance. We try to strengthen our framework so that we can sort out these issues and keep our customers happy. That is our plan.
Having said that, one must keep in mind that we cannot haphazardly grow our business or develop more services. We need to be careful of the direction in which we grow. Our business is driven by shipments, couriers, overnight expresses. It is this service that lies at the core of our business and not how many products we offer, and how we promote them. We are not Apple; we don’t come out with new iPads every two or three months. But we deliver our packages on time. We can make our customers happy by delivering faster and better. It is the kind of service that we provide that makes us international specialists and a great company. And in order to ensure that we stay this way, we have a focused framework in place.
Talking about quality and value addition, let me also add, last year we delivered 96 per cent of our shipments on time. This year, we already have an internal programme targeted at achieving 97 per cent success. If you consider the size of our business even a three to four per cent failure is a big number and we want to reduce that. We are growing at a good pace and we want to keep that alive. We have around 118 key performance indicators and we monitor them on a regular basis. We believe there is no limit to perfection. Our objective is to reach the Six Sigma level of perfection. We have a global programme called First Choice, equivalent of the six sigma level.
Through this group-wide service improvement programme we aim to become the number one choice for our customers. This is one of the core elements of our corporate strategy.