The FINANCIAL — “Georgian Express has been actively developing its regional network in recent years. We have eight regional offices in Georgia.
As for the courier routes network of Georgian Express, it covers all the regional centres. Of course there are many directions in this service that are unprofitable. However, we feel obliged to continue to expand and improve these services and thereby allow all the regions to unite with the whole economic system. We see potential here, and we believe that this sphere will become more interesting for business in the coming years,” Malkhaz Papelashvili, General Manager at Georgian Express, official representative of DHL in Georgia, told The FINANCIAL.
“We think that our business will soon return to the position in which it should be. We are waiting for the privileged and monopolistic businesses to start disappearing from the market and a healthy competitive environment to appear,” Papelashvili told.
Due to the political elections in Georgia last year, the company did not manage to achieve the 20% growth results that it had planned. “However, the company still managed to maintain an upward growth trend. We are mostly satisfied with the results of 2012,” said Papelashvili.
DHL Georgia has become the favourite brand of the Georgian population, adding its eighth Golden Brand award to the company’s list of achievements in the country.
During his interview with The FINANCIAL Papelashvili underlined the advantages of the company and spoke of the main challenges facing businesses in Georgia in 2013.
Q. What influence did the political changes that took place in Georgia in October 2012 have on your business?
A. We are a service company and accordingly, we are very sensitive towards any processes going on in the country. We expect only positive results from the past political elections however. The processes are in their initial stages and expecting instant results is unrealistic. We have already observed a revival from businesses and expect better results from the second part of this year.
Q. Some Georgian businessmen have stated that the existing diarchy in Georgia is negatively affecting the economy and consumer spending has dropped. The other half believe that a period of renaissance has started in Georgia. What’s your view on this?
A. We think that business will soon return to the position in which it should be. We are waiting for the privileged and monopolistic businesses to start disappearing and for a healthy competitive environment to finally appear on the market. As a result, in my opinion both ideas are exaggerated.
Q. What is your current position like on the Georgian market? What share of the market do you hold?
A. For decades the company DHL’s position in Georgia, as well as in the entire world, has been stable, and we will do everything possible to remain in this position for the long term. DHL offers a wide range of services to its customers and serves in all directions of logistics. Accordingly we occupy different shares in various segments. We are the market leaders in international express transportation, and its share is 40-45%. We are actively developing and maintaining the lead position in the local express transportation market. Our market share is significant in this direction. The share of Georgian Express on the freight market is also high; it is 20-25%. As for land and container automotive transportation our share is relatively modest. This is perfectly normal and adequate given the world trends. In this segment we are developing a more narrow direction, such as the business of transporting machinery and containers.
Q. Which service was the most popular in 2012?
A. In 2012 there was a steady demand for international express shipping service, however, demand decreased for DHL freight department. It should sound surprising but domestic express shipping was the most popular service.
Q. What is the share of your individual and corporate clients?
A. Corporate business is dominating out of DHL’s customers. The ratio is 90/10 in favour of corporate clients.
Q. Has the popularity of online shopping increased your work share?
A. DHL is mostly focused on the B2B segment. Nevertheless, we see the potential of developing service in the B2C business and this is part of our plans for the future.
Q. Please can you name the top countries in and to which the major share of goods are transported?
A. The lists of top sender and receiver countries are pretty much the same every year. They comprise: the USA, Germany, Great Britain, Russia and China.
Q. Which sectors are the majority of your customers from?
A. We serve customers from various business sectors. However, they mostly belong to international organizations, foundations, embassies, the banking sector and companies offering services. The number of representatives of real business is increasing significantly.
Q. The amount of cargo at DHL that gets lost is close to 0%. What security measures do you use to maintain this statistic?
A. In this regard DHL is a very reliable company. This statistic is as a result of DHL’s own strictly defined system that allows customers to track online. The security of the cargo is very important and we are inventing new measures every year to make this achievement even more secure. I can tell you honestly that the figure of lost parcels is not exactly 0, but it does not exceed 0.01%. And a share of this percentage of lost goods gets found after further searching.
Q. What will be the main challenge for your company and Georgian businesses in general in 2013?
A. The main challenge for DHL Georgia as well as other businesses will be the lack of infrastructure. This means insufficient number of flights at the airport, lack of destinations, lack of storage facilities. Our efforts in 2013 will be focused on solving infrastructural problems and expanding the network of Georgian Express.
Q. What is the expected volume of growth in 2013?
A. Like the previous year, in 2013 we plan to increase various shares in different directions. For the entire company we are targeting a 10% increase.
Discussion about this post