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Jun, 09 2011

TIMELESS, PRICELESS DELIVERY

DTDC has witnessed unprecedented growth in the last 21 years to become a household brand name. With 31 per cent growth in domestic business and over 40 per cent in international, the company has left nothing to prove. It is already a matchless franchise p

DTDC has witnessed unprecedented growth in the last 21 years to become a household brand name. With 31 per cent growth in domestic business and over 40 per cent in international, the company has left nothing to prove. It is already a matchless franchise package.

WITH the inception of courier services in India, came a revolution. The era of ordinary mails was suddenly swapped by time-defined, reliable transportation services for documents, packages and freight around two decades ago. The courier industry became an essential part of every economy. In India, various factors like growth of the industrial segment, growth in exports and imports and overall economic scenario of the country have contributed to the growth of the courier industry.

Witnessing success level of organised players in this sector, unorganised and independent players would find it difficult to sustain independently and hence many of them will change their business models and might merge or align with larger players. One of the players to be associated with is DTDC Courier & Cargo Ltd. The brand's entrepreneurial journey began in July 1990. What started as a concept in 1990 soon became the largest network in the country in the private sector with over 5,345 successful franchisees across the country. In India, there is still a huge potential in this sector, as the industry is largely unorganised. The market size of organised courier services is over Rs 8,000 crore and the industry is growing at a steady pace of 14-17 per cent per annum.

Pioneer of 'Franchisee Business Model'

DTDC has been franchising since its inception. After launching DTDC, its Chairman and Managing Director Subhasish Chakraborty conceived the idea of expanding its network through franchise model. According to Chakraborty, “I conceived a unique business model of appointing franchisees who would not only provide the strength of network at minimal capital investment but also generate business for themselves as well as for DTDC.”

The brand's franchise model came out to be really fruitful, as it offered a win-win arrangement. It became the cornerstone for DTDC's success story. DTDC pioneered the 'Franchisee Business Model' in the express industry in India. The model gave the first mover advantage in terms of reach, which is a key requirement and also the USP for DTDC. The brand witnessed unprecedented growth. DTDC's unparallel success via franchise model is a paradigm for others and has been discussed at various business schools in India and abroad.

Being one of the most renowned and established brands in the courier services industry, the brand offers low-cost franchise opportunity to its franchisees. What can be better than this, as the brand offers options as per franchisees' potential in terms of area and investment. For taking DTDC's franchise, a franchisee has three options. Beginning with the lowest, a franchisee can avail DTDC's franchise by investing Rs 75,000 with an area of 75 sq.ft. There are other options too, wherein a franchisee can partner with the brand by investing Rs 1 lakh to Rs 1.5 lakh. DTDC ensures that its franchisees start earning from day one and get monthly cash flow.

Franchisees' success is paramount

When asked about the substantial growth of the company and expansion plans, Suresh Bansal, Director, DTDC avers, “Our premier express business grew by 102 per cent last year, overall domestic business by 31 per cent and international business by over 40 per cent. We are present throughout the length and breadth of the country covering all the states, districts and many talukas and further plan to have pan-India presence.”

Having a strong presence across the nation via 5,345 franchisees, 78 super franchisees ( master franchisees) and 203 company-operated offices, DTDC is mulling expansion by opening branches or franchisee counters in 'B' and 'C' category cities in all districts and talukas. Internationally, DTDC has presence via subsidiaries, joint ventures, rep offices and franchises.

Train to gain

Prior to signing the agreement, besides investment and RoI, the important question every potential franchisee enquires about is, what kind of training and support will he get? For DTDC, training and support to the franchisees is one of the most significant attributes to have a quality franchise. The brand offers thorough training and support programme to assist its franchisees and staff.

DTDC has started 'DTDC Institute of Supply Chain Management' to bridge the gap between supply and demand for well-trained and experienced manpower.

Interview

A success laden package

Chairman and Managing Director Subhasish Chakraborty is the man behind DTDC's untiring success story. He talks passionately about the inception, growth and success of the brand.

Kindly tell us about you entrepreneurial journey.

My first brush with entrepreneurship began when I started a chemical distribution agency in Bangalore. Initially, I was using postal services and later moved on to courier services. It was during this period I realised that there was a major gap in express distribution services to the consumers in India and latent need for providing express services. Very soon, I availed this opportunity into creating an express courier company and DTDC Courier & Cargo was born on 26th July, 1990.

What is your new business concept?

Supply Chain Solutions, which includes logistics and warehousing, is our new division that we started one-and-half-year back. This is our Rs 500-crore expansion plan. In the last 21 years, DTDC has built some of the finest customer base in manufacturing, distributions, white goods companies, telecom, retail, automobile, pharmacy, engineering and textiles industry. Our SCS division is the fastest growing division within DTDC.

How do you modify your marketing strategies for different regions?

We follow different strategies for different markets and segments. For example, you cannot adapt same strategy for Patna and Gurgaon. Gurgaon demands a very different approach whereas Patna requires a different approach. We may do 100 per cent business through channels in Bihar whereas in Gurgaon, due to presence of large number of multi-nationals, we may go direct with high-quality sales team. Similarly, our marketing strategy for foreign markets differs from one market to another. For US, due to TSA regulations, we may have limited opportunities for franchise expansion but in UK, this is absolutely possible.

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Franchise facts

Annual turnover: Rs 317 crore  FY 2010-11

Franchise turnover: Rs 528 crore

Industry size: Rs 8,500 crore

Company Operational Since: 26th July 1990

Year of starting franchising: 1990

Number of cities present in: 2,070

Number of franchise units: 5,345

Percentage of total business from franchisees: 70%

Total Investment: Rs.75,000-Rs 1.5 lakh

Area Required: From 75 sq.ft to 300 sq.ft

Return on Investment: 30%

Expected break even time: 4 to 9 months months

No of franchises internationally: 50

International presence

US: 100% subsidiary with four offices, 15 franchises

UK: 100% subsidiary with four offices, 20 franchises

Canada: 100% subsidiary with one office, 10 franchises

UAE: 76% subsidiary with three offices

Qatar: Super franchise

Oman: Super Franchise

Saudi Arabia: Tie up with Saudi Post EMS.

Singapore: 50% JV. One franchisee

Nepal: Super Franchises

Sri Lanka: Tie up

Bangladesh: Tie up

Hong Kong: tie up

China: Tie up and franchises arrangements

Australia: Super franchises

Turkey: Tie up

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Franchisee speak

'In 12 years, I have achieved everything'

“Out of money and financially broken, that was my condition in 1996. I worked as an accountant on a meager salary of Rs 3,500 per month, sold fire extinguishers and then entered into leather exports business. None worked. Then I heard about DTDC and took up its franchise. In my 12 years of association with it. I have achieved everything, my brothers' educations, father's treatment and sister's marriage.”

Shiv Prasad Sharma, Karampura, Delhi franchisee,

'Whatever I am today is because of DTDC'

“In 1998 when I joined one of DTDC franchisee's office as a delivery boy at Rs 950 per month. It was impossible to run a family, leave alone medicine for my ailing father. In March 2004, I somehow managed to take up the franchise of DTDC. The beginning was humble but with the help of extremely cooperative Hyderabad regional office staff and zeal to succeed, I never stopped. I started my business with just Rs 2,100 transhipment billing per month, which has now grown above Rs 2.5 lakh per month and is growing everyday. Whatever I am today is all because of DTDC.”

Suneel, Hyderabad Franchisee

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Why associate with DTDC

æ Renowned for having largest delivery network

æ Is the biggest domestic Indian brand in Express Courier industry

æ Has state-of-the-art, best IT infrastructure

æ 50% of franchisees are associated for over a decade

æ 500 franchisees have completed 17 years with DTDC

æ Has KPMG as the auditors

æ Internal Auditors are E&Y

æ IT Partners Cap Gemini and IBM

æ Is 40% owned by Reliance ADA Group

æ Offers time-bound delivery and gives money back guarantee

æ Operates via all three modes i.e air, rail and road

æ Has a network of 22,000 employees who handle handling over 10 million parcels a month.

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