Delhivery to acquire totality of Aramex’s Indian operations
Delhivery, a last mile logistics operator based in the financial and technology hub of Gurugram outside New Delhi, is in talks to acquire the India business of Dubai-based logistics firm Aramex.
The acquisition for an undisclosed sum will give Delhivery, which specialises in last mile deliveries for e-commerce clients, access to Aramex’s domestic infrastructure in the country. Aramex provides logistics for major e-commerce companies such as Amazon India.
According to an ET report, citing an email sent by Aramex India country manager Hector Crasto to its customers, Delhivery will now take over Aramex India’s pick-up and delivery shipment operations.
The acquisition will take effect from March 1st, 2019.
However, Aramex will continue to focus on its global competencies of express and freight and will continue the international business in the country, the report said.
In an emailed statement, Aramex confirmed the talks, but insisted nothing was certain at this stage.
"We are currently discussing the possibility of entering into a strategic commercial partnership with Delhivery to restructure our operations in India," Mohammad Ziad Mousa, senior communications manager for Aramex told the Dubai Financial Market in an email.
"Through this partnership, Aramex will offload it's Domestic Express Services in India to Delhivery, while continuing to fully own, manage and operate its International Express and Freight Forwarding Services."
Aramex appears to have found it difficult to compete in India against local operators such as Delhivery.
While announcing its Q4 2018 results, Aramex said that the performance of its domestic express operation in India was impacted due to downscaling of operations in the country.
The company reported domestic express operation revenue of AED 270 million (US $73.5 million) in Q4 2018 — a 1% drop compared to AED 272 million (US $74 million) in Q4 2017.
“While Aramex’s domestic express services witnessed excellent growth in GCC and Africa, the overall growth was impacted by the strategic downscaling of the company’s operations in India as part of restructuring efforts,” the financial statement said.
Delhivery demonstrated strong growth performance during the same period, with a 42% jump in its revenue during 2018.
Its operational revenue contributed almost 95% to its total revenue of US $153.26 million against US $107.92 million during the previous year.