DHL cites barriers to emerging market growth

DHL has identified three main barriers limiting the potential success of emerging markets in powering and sustaining the global economic recovery: High customs costs, slow market liberalisation and under-developed distribution channels. Rob Siegers, COO, DHL Global Customer Solutions, said: “Twelve emerging ‘Hotspots’, identified in the IMF World Economic Outlook released earlier this year, have a […]


DHL has identified three main barriers limiting the potential success of emerging markets in powering and sustaining the global economic recovery: High customs costs, slow market liberalisation and under-developed distribution channels. Rob Siegers, COO, DHL Global Customer Solutions, said: “Twelve emerging ‘Hotspots’, identified in the IMF World Economic Outlook released earlier this year, have a greater growth potential than the main economies of the developed world combined. While this is something to cheer about, a closer look at supply chain logistics is vital to ensure that these economies can deliver on their growth promises in the short and long-term.” Richard Owens, CEO, DHL Global Customer Solutions, Asia Pacific, said: “In Asia Pacific, almost 15 per cent of supply chain costs are still related to customs and regulations procedures, compared to just three per cent in Europe. As logistics is the backbone of worldwide trade, easing the movement of goods and services via better logistics processes, infrastructure systems and government policies in these markets will allow emerging markets to reach their goals on schedule. “Key growth industries such as textiles and garments, pharmaceuticals and renewable energy also need to play a part in driving improvements and sustainability in the supply chain.” A study by the World Bank suggests that the logistics performance of a country has a relatively high impact on any country’s economic and trade growth vis-¨¤-vis its peers at the same level of development. DHL has made sustainable development a priority and it aims to improve carbon efficiency by 30 per cent by 2020 and “for long-term success, emerging markets need to put sustainable supply chain solutions high on the agenda,” added Owens. “Hotspot” economies include Mexico, Turkey, Russia, mainland China, Korea, Taiwan, Thailand, India, the United Arab Emirates, Saudi Arabia, South Africa and Brazil. Together, they are expected to achieve an average GDP growth of 7.2 per cent in 2015, compared to the projected 2.1 per cent of the G-7 nations. The combined GDP of these “Hotspot” economies is expected to command a 38 per cent share of global GDP by 2015 – two per cent more than the G-7’s global GDP. Last year, the average GDP growth for these hotspots stands at 2.8 per cent, compared to -3.4 per cent for the G-7 nations. Global GDP market share was 32 per cent, just 9 per cent lower than the G-7’s stake. Other emerging market challenges identified by DHL include: Fragmented markets; political volatility; youthful, growing population with limited income; language and communication issues; and large socio-economic divisions within populations.