Deutsche Post to Deliver Groceries For Amazon in Germany

Deutsche Post to Deliver Groceries For Amazon in Germany

Deutsche Post DHL today announced it had secured a contract with Amazon to deliver groceries as part of the american retailer’s AmazonFresh service in Germany.

In January, Deutsche Chief Executive Frank Appel told CNBC that Amazon would find it difficult to challenge his company because they underestimate the complexity of the business. But Amazon has continued to expand its logistic capabilities, increasingly coming into competition with traditional logistics companies and delivery services.

"We want to be the service provider for online grocery sales," Appel told shareholders at the group's annual general meeting on Friday. However, the group will continue to operate its own online supermarket, Allyouneed Fresh.

Express delivery of goods and services purchased online via websites such as Amazon and Zalando is a booming industry in Germany and in Europe generally. According to the Express Delivery Market in Europe report, the market is forecast to grow at a CAGR of 3.67% during the period 2017-2021.

The latest trend gaining momentum in the market is advances in IT-enabled technology in express delivery services. Express delivery service providers are implementing IT-enabled services, such as GPS tracking, online tracking, communication services, automatic updating of records, 2-D barcoding, and real-time tracking to provide hassle-free services to customers.

Amazon has become a key player in this market. One of the big stories of 2016 was the e-commerce giant’s move to break into the distribution network. Earlier this week, the Seattle-based company revealed that logistics had accounted for $6.4bn of its total sales in Q1. Logistics services were the fastest-growing part of Amazon’s retail business, growing 36 percent from a year earlier.

In the past two years, Amazon has leased 40 cargo jets to start an air hub, bought thousands of truck trailers, taken out a shipping license in China and launched a one click ordering service in the United Kingdom.

It has obviously been a successful venture for the company thus far, as it reported its eighth consecutive profitable quarter, a record streak for a company. Revenues rose 24 per cent to reach $35.7bn for the quarter.

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