Hello. Good afternoon. Good morning from, bond to wherever you are to our, IR virtual tutorial as announced today on a DHL Express And Profitableecommerce. So I'm Martin Singh by cutting the IR effort you see us today, in a format that we, had chosen already a couple of weeks ago for a different tutorial. We would have lost to broadcast today out of a fancy little studio in our innovation center.
However, recent travel restrictions have, made it necessary that we go back to this, type of setup where we have John Pearson, joining us, from his, London home office and, our colleagues, Nikhil, Greeven, at Landups in Belvft, out of the Netherlands. So a very warm welcome nevertheless from from my side. As you can see on page 2 of the slide deck that you have in your webcast, we have had a couple of, I think very well received, drill downs in this virtual format today on expressprofitabilitycommercegrowth I'm pretty sure this was planned to be the substitute for physical site visits, but I think going forward with or without COVID being around business format, I really would like to continue for the topical deep dives like the one we have today. So, what I would like you to take away from this, after the next, I don't know, 60, 70 minutes or something. Is a very clear, a a key message.
1, ecommerceandbtoc type of shipments are an ideal fit to the TBI network that, expressed is operating globally. The very popular rationale is this good or bad news to the margin, I think we have a very clear answer to that. As you can see, ever since we've seen need to see the volumes growing. This hasn't done any harm to to our margin situation. And the third factor is, how do we approach this from the sales from the customer point of view?
How do we play this vertical? So we're gonna spend most of the time today on that one, for the regular followers, you should be familiar with the Q and A type of setup. Where you are right below the window that you're looking at right now, you will have a a field where you can punch in your questions, and those will then be forwarded to me. And we'll deal with them later on the Q and A session. Okay.
On the topic, maybe before I hand over to John, just on slide number 5, a very, brief, categorization on what are we talking about? In within the group, you know, we have, various business models in the global world of logistics and transport today, we are talking about the very top end product, the fastest available, around and, therefore, also for one of the priciest. So this is not today about how we're dealing with the domestic parcel business or how we deal with the international air freight and, clearly focused on time definite as in as fast as possible to your doorstep. So with that type of intro, John, I'd like to hand over to you.
Thank you, Martin. And, hi there, everyone, and hope you're all keeping well and safe. So, yeah, pleasure always to talk about ecommerce, and I'm just gonna cover up three three slides that, perhaps set us up well before I pass over to Linda and Michil, the guys that have done all the work with, commercial teams globally because this is really a global initiative. It's no longer just US UK and Germany and a few other countries that it is right across our across our our network. So firstly, the, the the the focus strategy, 4 pillars, 3 letters in a in a passport, we like to keep that simple.
That's very much the, the beats of the drum we'll work to across the Express division. You'll see in the middle of the slide, seed, I guess, 4 things that I've, brought out of the focus strategy. They were in it before, but they're They're more accentuated now and more central to the next 2 to 3 years, supervisory, ecommerce, efficiency, and digitalization. Which form part of our overall focus strategy. And ecommerce is right at the heart of everything we're doing.
If we move on to the next slide, perhaps talk more generally to it. It it illustrates the percentage of, retail that has moved online. When I say talk a little bit more generally to it, I think we hear this anecdote and we hear this phrase that we've seen for years of equal most growth. With 3 months. And I think that's sort of what we have seen.
In February, March, we saw a rapid acceleration of all of our e commerce aspects right through, the division, right through the group, but certainly through the express division, And while this slide talks to domestic and international situations, it doesn't matter because the illustration is that we've seen so much acceleration because of, the lack of ability to attend trade fairs, the lack of ability to get on to, planes and cellular products overseas and the ability in the last few months not even to get out of your, get out of your home. So I think that's the catalyst and and the sort of nitrous oxide we're we're dealing with on this topic at the minute. And then the last slide, I'd like to talk about them For those of you who have been following us a long while, 2016, Charlie, Dolby and I spoke about, ecommerce and how it fitted in with our TDI network. And, at that point, the percentage of, TDI shipments in our network was sort of 10 or 15%. Depending on when we when we caught you and when we talked to you, and that's now, somewhere between 45.48% of our shipments, are from e commerce.
You can imagine that varies a lot by country. And then as you can see that the margin has moved, you know, onwards and upwards during that time. And I think we're in a position now where we can almost put a lid on this topic in the sense that, The the first mile has very high origin shipment density. We may be picking up 500 or 5000 shipments. At any one point, the shipments whiz around are automated, are increasingly automated salt systems that are built for North of 30 kilos in ecommerce is at the low end of that.
Obviously, they fit in the corner of a shelf vehicle. They fit in the corner of ULD. And then the last mile, which was always the, you know, the point of discussion now with the on demand delivery and more, receiver options for where they would like to take delivery leave with they, but leave in safe place, pick up at pack station, now, obviously, during, sadly, in one sense, obviously, during the last 4 or 5 months leave with door has become the accepted form of delivery. So the point there is that the last mile is more efficient than ever before. Really now you can start to imagine in your minds how, premium cross border international TDI is very treated to our network, our our margin fits in with our TDI capabilities, and we continue to, as the guys will talk about, add value to what we're able to do for our merchants, which thereby allows us to keep our price point up.
So as I say, thank you for taking interest in this topic, and now I'll now pass over to Leonard.
Yes. Thanks a lot, John. It was indeed mentioned on the previous slides. So now on slide page number 9, previous slides was mentioned indeed how we manage e commerce as a vertical. So before we go into the topic of how we add value to the customers and how we help our customer to grow resulting in profitable premium e commerce shipments.
First, have a look at, how that vertical actually looks like. So on Page 9, you can see how, how we manage B2C e commerce as a vertical. And if we look in terms of size and growth, we can see how it's not only the fastest growing vertical, but it's also right now the biggest vertical, where you're on this page, yellow bars represent revenue size and the red dots represent the growth, which you can see there on the right hand axis. One point I would like to make this is not about forgetting about B2B, and we do a lot of various things, how we manage all those other industries and how we manage B2B as well. But in this session, we will go into, how we manage B2C as a vertical.
Then going on to page number 10, We see customers in various segments and all different type of products. So it's definitely not only the, let's say, high value fashion goods or we see it in all different product categories, etcetera. We see it in luxury and fashion, of course, yes, we see it in consumer electronics, sporting goods, but also local brands and products, which we help to bring them to a global stage. We are supporting marketplaces and platform sellers of course, also those niche customers, customers who come up with an innovative product of a new and trending products, which can go very quickly from 0 to 0. An important question, of course, to answer is why are all these customers choosing to work with us?
Things a couple of points. One is we truly help to develop our customers, and we will explain in a minute how we're doing that and really help them to bring their brands to a global stage. Second point is all related to our fast and reliable product because consumer demand today is fast delivery. The days that consumers who are willing to wait a week, 2 weeks, 5 days for that product. Those days are far behind us, and everybody wants their goods now as quickly as possible.
It's also related to the tools we are offering. John mentioned ODD already on demand delivery, which is something I will explain in a minute in a bit more detail. If we then go to Page number 11, so if you indeed look at the various industries and the various product categories, Here on this page, you can also see how it's not only about fashion and retail, but how we see e commerce volumes in all different product categories. So you can see here also how we are adding e commerce volumes in the consumable sector. So an example, the products you eat, etcetera, but also the technology sector, service industry, finance industry, and also life science and health care.
What you see here on this page as well is the impact of COVID nineteen on the whole e commerce industry. Because what you can see here is for the different product categories, whether it's retail, whether it's fashion, weathers consumables, you can see how the share of e Commerce in that overall sector for us increased during COVID 19 because on the left hand side, you can see the full year 2019 figures. And on the right hand side, you will see our year to date 2020 figures enhance the impact of post COVID nineteen. What you see in brackets are the is I am is the growth year to date based on revenue And here, you can also see one point, which I'd like to point out is if you look at the life science and health care industry, right, before e commerce was not really growing the e commerce element of life science and health care right now with direct to patient volume really, really growing can now see on the right hand side how that volume is also really growing in that sector and there's definitely more growth expected in categories like that. If we go to page number 12, yes, you can think about the common products.
On the previous slide, you could see some of common products already, but it's also those products, which are less known to the most losses, which are currently going through our network. Here, you can see some examples. This is definitely supporting to diversify our customer base, but here on on the page, you can see some actual examples of customers of DHL Express, where the customers are having that express delivery needs and where they want to choose where they want to receive their goods as fast as possible. So whether that is glittery gummy bears from Korea, Viking, including from Norway, or a very smart legging, which is invented in Israel, which the ladies amongst us can use to automatically measure the size of that, of their ideal fitting jeans. There's really a wide variety of products where customers are really requesting that express delivery option and again, where we are supporting the customers to do so.
Then going to Page number 13. This is what John also already touched upon his intro. And this is a slide for those who have joined back in 2015. This was a slide which we showed back then as well already. Because this is showing how indeed e commerce is a perfect fit and how e commerce shipment categories fit within our existing EDR network.
And also how our e commerce B2C strategy remains simple. So here you can see several characteristics when it comes to shipment per day, when it comes to weight per shipment etcetera. And those who might remember, and John mentioned it in the beginning, the last mile element. In the past, that little arrow was actually yellow or orange and slightly bending down. But right now, we definitely have this as a green, and that comes due to various investments we have done into our lost mile and optimizing our residential deliveries via on demand delivery, but also an example, increasing our drop off locations to make that loss mile as efficient as possible.
And again, what it was mentioned, we keep treating B2C E Commerce at a vertical. I would also good to mention that we are applying exactly the same yield principles as we have done always, and that is why we continuously keep emphasizing internally as well to salespeople, that it's about profitable premium e commerce. Then zooming into that last mile and the reason why that arrow is now actually turning green or is green already. That has to do with, couple of things. And one of those is on the non delivery.
So on Page 14, you can see some of the, let's say, comments about on demand delivery. One point I would like to point out here is I start at the bottom. So let's say 68 percent of millennials, they are choosing a retailer purely, purely based on the delivery options offered. And that is something what we're offering our customers through on demand delivery. And when we speak about on demand delivery, we always like to talk into a win win win situation.
So first, very briefly on on demand delivery, for those less familiar with the platform, it's a platform via which we offer consumers the choice or receivers the choice to take full control of their delivery. So they can choose and that's regardless of where the shipment is in our network. But upon the moment of pickup, they can take control and they can decide how, when and where they want the shipments to be delivered. They can do that through a very easy platform. The reason why we call it a win win win situation is, first of all, it's very easy for our customers they can offer a global platform to all their receivers and offer that piece of flexibility to their customers and also communicate it as such.
The second win is for the receivers of the goods because as mentioned, for them, it's about getting the flexibility, getting the delivery option and always choosing and delivery options on their own terms. What is also a good effect is, for our customers, because for our customers, what we're also seeing is via on demand delivery, we continuously keep the receiver of the goods up to date about where the shipment is in our network, when is the expected delivery date, when is the the delivery time, etcetera. And it's also having a benefit for our customers, when it comes to, in example, receiving customer service queries, receiving inbound calls, etcetera. And the last win, and definitely not least important, is also for us because via on demand delivery, we can improve and we have improved first time delivery attempt. And with this, we make sure that the first time delivery attempt is as successful as possible.
Then going on to page number 15. Page number 15, you can see some of the statistics around on non delivery. So first of all, it's a global platform. It's also a market leading platform because there's no other solution out there in the market. Which is covering this many markets.
It's currently active in 165 countries globally. You can see the volume here going through the platform on page number 15, 68% of the delivery requests made nowadays are signature release and that is related also to the COVID 19 pandemic because one of the delivery options which is offered is that signature, the release delivery option, by which a receiver can sign all online already in order also to support a non contact delivery. And we've seen a significant increase of that chosen delivery option during or when the COVID pandemic took off as well. But with the biggest effect of happy customers and happy receivers. And then going back to what we mentioned about optimizing residential, residential delivery.
Here, you have the statistics. Here, you can see how between 93% 95% of first time delivery rate is now successful. And that's a 20% increase versus the baseline in 2015. So you can imagine also the impact on our network, the impact on our successful delivery shipments and all as an effect of on demand delivery. We keep investing in on demand delivery as well, and we keep divesting in our delivery solutions, which you can see on Page number 16.
On Page number 16, you can see some of the recent ODD developments the left hand side, you can see something which is currently in pilot in multiple countries as we speak, which is something called follow mark my career. Via which we do not only keep the receiver of the goods continuously up to date via messaging and giving them the other options to adjust the delivery via that. But also showing visibility on where the courier exactly is in his route and how many stops he is away from that specific However, if you received many or many positive comments, both from the receivers, but also from our couriers who were saying that the moment that this was offered to a receiver, that the receiver started to follow the courier on the map. You could see how many stops he was away. And the moment the courier turned his then into the right street, the receiver was already walking outside with a smile because he knew that, Hey, my courier is here just around the corner, and I can receive my goods And again, which not only results in happy customers, but also again speeds up to time to execute that actual delivery, make that last mile delivery as successful as possible.
We also keep investing in our service point network, and here you can see the growth as of 2016. 2016, we had approximately 37,000 service points globally, where right now we are covering the world with 86,000 service points which can be chosen via on demand delivery if a receiver prefers to not wait at home for that shipment, but prefers to pick it up at a nearby service location to make again, yeah, that delivery experience as smooth and as easy as possible. Then going on to page 17, I think one of the most valuable points in our e commerce strategy and also one of the most impactful in our success rate is actually how we are supporting our customers to grow their business. Because what I previously explained was mainly about network characteristics and elements we're offering to the receiver. But one of the most valuable things is how we are really facilitating growth for our customers.
So let's have a look how we're actually doing that. And also the program power of your potential, which we have rolled out globally in order to speak in that way to customers all around the world and to have that way of consulting our customers globally. On page number 18 bit of a timeline. Here, you see the acronym POIP, which we will be seeing coming back a couple of more times in this presentation. So it stands for power up your potential, which was the name we've chosen when we rolled out a network wide approach to talk and sell profitable premium e Commerce.
And it all dates back to, let's say, 2013 between 2016 when we saw various initiatives happening in countries, where countries were successful in consulting customers on how to be successful in e Commerce. It was also during that phase that actually in the UK, something, a very simple concept was born, which was called the website health check, which was, at that point, a very simple 6 point checklist how we could consult our customers, how to optimize their website and how to optimize their customer experience. So during that phase, we learned a lot. We spoke a lot internally to, to understand, okay, what works well? What doesn't work well?
And then back in 2017, that is where we officially launched Power Rock Your Potential 1. Again, a network wide approach, John mentioned in the beginning, it's a global program. I'm still impressed by the way how quickly it was picked up globally, and we rolled out I think, around 100 countries within a matter of months. And it was an extended training program for all of our sales reps all around the world. In order to learn and understand the role of e Commerce, to learn and understand about the opportunity for us as a company also for our customers when it comes to cross border e Commerce.
We were explaining elements, an example, how cross border e Commerce is growing twice as hard as domestic e Commerce. And all the benefits which we, as a company, can bring to the table to consult our customers. It was in that program that we formally introduced the website health check as a global methodology to console customers and where we also introduced similar web as a methodology to analyze the opportunity and also to emphasize the importance of adding an express delivery option. Also during that phase, it's when we launched the 21st century spice trade, which of you might have seen, and we're more than happy to share copies as well because the study is still relevant today, which was a study we have done to to, yeah, to investigate the cross border e commerce landscape and to analyze what makes, retailers successful in that area. If we go to page number 19, so this is related to the research, which we have done ourselves, but also third party research we have used because what we saw is we spotted various e commerce trends but at the same time, we saw how not all merchants out there were actually using those facts and using those insights in, as our advantage in order to create a competitive edge over their competitions.
Because what we saw is how shipping and delivery options really place and is still through today, how it plays a crucial success in a retail or in an e commerce brand's success. We look at some of the steps which are mentioned here on page number 19, an example, 91% of online shoppers, they are looking for available delivery options before reaching the checkout. And every time we mention that stat, we always see people nodding, like, yeah, actually that's true. Because me as well, if I'm shopping online myself, what I want to know is when will the goods be delivered, how will be delivered, and when will I receive them? That's the first question I have in my mind.
What we saw, and we still see today how a lot of retailers are not using that information at an as an advantage to create that competitive And they can create that competitive edge because here, again, the status was mentioned earlier that 68% of the millennials, they are actually choosing one retailer over another purely by the delivery options offered. But again, a lot of retailers who are hiding that information in the footer of the website, which is the all bottom part of the website, or an example, only, it's only showing those details upon checkout while the consumer has that question in the head, the moment they end up on a home page of a retailer and where they want to spend their money. So in order to support our customers with that, we came up with something, or we launched this website health check methodology. And that is something which you can see on page number 20. So the website health check is something how we are facilitating growth for our customers And, it's a 10 point checklist where we analyze how well a website of a merchant is speaking to the cross border consumer and how well they are using shipping and delivery options in a clear way in order to create that competitive advantage And some points on this checklist are about localization because if you're shopping on a cross border site, it's all about creating that localized experience, whether that is having a website in multiple languages, applying currency conversion, offering localized payment options, but it's also about clarity on shipping and delivery options and clarity to the cross border consumer because if you end on a website for the very first time, does this customer or does this company ship to my home country, and can I spend my money here?
That is why I want to highlight one element of this website health check, which is actually the second one on the left hand side, which is do you state your shipping options on your home page? And do you mention that you sell Internationally? And what we mean with that is something which you can see on page number 21. This is all about creating clarity, the moment a consumer and sub on a website. And this is something what merchants can easily fix by having this very simple banner at the top of their homepage, which is saying, yes, we ship internationally, yes, we offer express delivery.
And in example, we offer free shipping for orders over USD 150.00. So over a specific amount, We have seen multiple examples how customers did not have that information before clearly communicated on their homepage. They only had it in their footer, in the checkout as mentioned. And the moment they implemented a simple element like this, they really saw an increase in their conversion rates. And we have multiple examples where customers called us back after we explained these elements to them.
And after they put a simple banner in place, that they called us back and saying, Hey. Well, actually, I do see an impact on my conversion rates and more customers are clicking on products, going to the checkout, and buying the goods on my website. So this is one very simple example. What is also good to know is while we are looking at all of our customers, we are managing in our portfolio, We also see that those successful, fast growing customers, they tick almost all of the boxes, if not all the boxes, of the website health check. So there's also a clear correlation between that website health check and the growth of a customer, which is also something we can explain and discuss with our customers.
If we go to Page number 22, Part of our PowerUp potential narrative is also offering multiple delivery options. So we are not advocating that a customer should offer only an express delivery option, but it's about giving the consumer the choice of delivery options. And we See, here on this page is, in analysis we've done together with our partners, similar web, to which I will come to on the next page, but we have analyzed what is the impact of the number of delivery options offered on an e commerce site in their conversion rates. So what this mean is, okay, if a customer is offering 1 delivery option, an example, a postal solution, so you can only choose a postal shipment, which will take a between 5 10 days deliveries. While we saw as the average conversion rates, and this is where we analyzed 80 different websites, the average conversion rate here was 1.9%.
However, for those websites who are offering multiple delivery options, and the ideal number seems to be between 34 which can be example, yes, and to offer a postal delivery option, yes, to offer an express delivery option, yes, to offer a signature release option and an example, the option to pick up the goods at a nearby service point. If for in those multiple delivery options, we saw an average a conversion rate between 4.85%. So this means that merchants and e commerce retailers, they can actually almost double their conversion rate by going from 1 delivery option to multiple delivery options. And you can think that, those percentages are small from 1% to 4% or from 2% to 5%, but you can imagine the the overall impact this will have on the revenue of a merchant because this will mean that 2% or 3% more of all the visitors of their website will actually end up buying on their page. So this is really something, again, how we can help our customers and facilitate growth.
Then if we go to Page number 23, and I mentioned the name already, similar web. So in power of potential, One element what we've launched was the website health check about the value of adding express option, about localizing your websites, about being as open as possible for the cross border consumer and about, yeah, using shipping and delivery options as an advantage What we also find a way found a way via similar app to consult our customers about the potential growth they could achieve by going cross border. So very briefly, what similar web is doing, via similar web, we can have insights about any website in the world and have insights on the website traffic and the website traffic behavior on that website. So we can type in any URL. We can type in any website of or a potential customer and see an example, what is the total number of traffic on that website?
So how many visitors does that website have? But also where is traffic coming from. And this is something which we found as extremely valuable in our conversations with customers because in a lot of cases, we came across examples where a customer was saying, oh, well, actually, I only sell domestically, and my business is growing very well, So no, I'm not interested in Cross border e Commerce. Of course, we had various facts and statistics to show to our customers how to opportunity is cross border. And as mentioned before, how cross border ecommerce is still growing with twice rates as compared to domestic ecommerce.
But via this, we could also calculate the potential uptake in sales. So this is a real case example, a company called DujBags, So, no, I did not make up the name. It's an actually company based out of Norway called douchebags. They make very fancy backpacks. And I had the honor to personally meet with this company, And while we were speaking with them and while we were talking with them, we were talking about the website health check, and then I told the guys, okay, let's look at your website data.
So I went to similar web, tightened their website, and I could see there how a significant amount of that traffic around 12% was coming from the U. S. But the guys were not yet selling to the UBS because they were focused mainly on the Nordics and mainly on Europe. And they were very pleased with that business while growing, etcetera, etcetera. But I said, okay, let's calculate some numbers.
I said, imagine you have 1,000,000 website visits per month on your websites. That means that that what, let's take 11% of website traffic from the U. S. Represents 110,000 visits from the U. S.
If we then take a low conversion rate to sales, 2%. The guys at Deutsche Bacs at that time actually said no, our conversion rate is 3.1%. Said, no, let's be careful. Let's take 2%. Said that means that 110,000 website visits represents 2200 potential sales transactions to the US.
I then asked the guys, what is your average basket value, which was $100 at that So, okay, multiply that 2200 sales or sales transactions times $120,000 per month in sales only to the U. S. If we s, if we multiply that times 12 to come to an annual amount, that 2,600,000 increase So at that point, I asked the gentleman, I said, okay, are you interested to increase your sales with 2,600,000? And as we've shown, I've shown you multiple ways how we think we can optimize your websites file to even increase your conversion rates. So at that time, the guys picked up their phone, and they immediately request tested a meeting with DHL Express in a way.
And our literal words was that they never had such an insightful meeting with a supplier and they want to meet with DHL as quickly as possible because they want to hear more and they want to transact more. And couple of days later, a couple of weeks later, they actually switched to DHL, started shipping results, and resulted in a very happy customer. With that, I would actually like to hand over to Mikhail, who will explain what the impact of all this was from our customers, what else we did for our sales teams, and customers as well in the next phases and also what future opportunities are looking like.
So thank you very much, Layneux. So if you could please go to Slide 24, you know, this is actually, Lynn that was talking about the website health check and similar web And we developed that in a program called PowerUp Potential that, you know, between developing it and actually using it, from, in our sales rep point of view, that's step number 2. And, this is a picture that I took Personally, when I was participating at the workshop with a customer called Sonos, they are making, audio systems you can see in the back. And when I was there and I saw on the left hand side, our DHL sales rep talking with the customer, I thought, okay, this is exactly what we meant. This is how we had envisaged this program to be.
Because if you look at our sales rep, you see the passion in his eyes you see that he's talking about something new and exciting. And I think you can see also on the on this photo that he's making clearly an impact. On the right hand side, you see the customer And for us, this was also like an ideal situation because normally when sales reps of DHL expressed visits their customers, then quite often they speak to the logistics manager, and the logistics manager is also in this picture. But more importantly, also the marketing manager of, Sonos Europe is in this picture, and he's looking really interesting and interested in, in what is, being talked about. So we are providing really insights and our sales rep is acting as a trusted advisor and is really helping our customer to develop And you think Sonos is not a small company.
It's like a medium sized company, and they have really good knowledge. But for us, it was quite often eye opening to see that we could always give them some insights, some stuff that they did not know about and that could actually lead to business growth of our customers, which is a great situation to be in. If you can go to the next police, which is Slide number 25. So we said after the successful launch of power of your potential part 1, we said, okay, now we need to do 2 things. First one is to enhance the sales program with the latest insights because we could see that many sales reps they were really hungry for information, and they wanted to learn more.
But also, we were learning more. And, you know, this e commerce market is developing constantly. So it was really important to keep pace with what is going on to translate that again into new trainings and insights. And feed our sales reps with that. And the second point that we looked at was B2B E Commerce.
And in our view, that's really the next big thing. And this includes actually the B2B marketplaces. And we did research with a consultancy firm in London, MR, on the B2B marketplaces, but we also created a white paper with the Cranfield University. So two conclusions there. So B2B, yes, it is growing quite dramatically, and it would reach $1,200,000,000,000 in 2021.
And maybe that number is actually even higher today. And the second point is that if, as a traditional B2B company, you want to get into the sustainable growth for the long run, you really need to think and act more as a B2C company and especially around the customer experience. So moving to Page number 26. This is this first part, the next part of PowerPU potential PowerPU potential 2, new insights, new information. So we developed sales training, new sales training, but another thing that we did which was proven to be very practical and successful was that we started to establish our internal e commerce councils So we did that regionally.
So every country, delivered like an ecommerce champion. And within the countries, every region delivered a e commerce champion. And from that, we really started to spread the world and, you know, educate our people on these 2 simple, tools like the website health check and the similar web. We developed a little black book of e Commerce. We taught our people how to talk and speak to ecommerce merchants, talk their language.
That's very, very important. And obviously, we were sharing lots of, you know, case studies, successful things that happened within the network where we can learn from each other. And obviously, we, we continue to do the research. Moving on to Page 27, Here, you see an example of a market insight pack that we distributed over our sales force it was really important that we, thought our people that markets are different. You really need to understand what is happening with the de minimis values in certain countries?
What are the delivery preferences of customers generally in those countries? And what are the most popular categories within the market. And with that information, you really could, you know, give a benefit to our customers to share this information and to be better prepared when they go into a certain market. So moving on to Slide 28, of course, it is a journey. And in a journey, you learn.
There's nothing basic about the basics, we say. There were 3 main lessons that we learned. First of all, when you roll out such, nice, exciting, fancy program, which is also very successful, you automatically might think, okay, so yeah, everyone will pick this up because, you know, you can really generate new volumes and profitable volumes in your portfolio, but we also noticed that, you know, we would say 50, 60 percent of the people They really got it immediately, but it's not that all people get it immediately, and you need to take them by the hands. And you need to make to you make them feel comfortable. And, you know, we are sharing our lessons and we were sharing experiences and we were taking the less comfortable people with us, to see how it works with customers.
And then gradually, you can change the people into e commerce specialists, and they start to enjoy this new way of selling. A second point was that you know, salespeople, by nature, are hungry for volume. But, you know, we, we set guys, it's not only about the volume. It's actually about taking on the profitable premium e commerce volume. Quickly, when you start engaging with customers, customers would ask, do you have more economy service cheaper, easier.
And we said, you know, our focus is really the express site, the international express, and not so much the economy, let's say, for, Holland to Germany, for example, and this is what you call focus, and this was a very important lesson that we learned. A third point that we learned was that we noticed that our customers are within a maturity curve. So they start and then they start quick and it's all like a discovery and they open up new markets and, we help them and assist them to go and enter into these markets. And then it goes very quickly, and it goes very quickly up to a point that people or companies start to get mature. And they're sometimes looking for an IPO.
And then, you know, the dynamics are actually changing because then it might be that the focus shifts to more like short term profitability, a lot of focus on cost on costs, a lot of focus on prices, and maybe less interest for a top notch service, So we came into these discussions, and, obviously, we were guiding also our customers into that journey, but it could also end up to a situation where we would say, okay. Yeah. So this part will become like an economy service, with longer lead times, but we are in Xpress. And you might think like okay, does it mean that at the end of the maturity curve, we were losing our customers to competition? And the answer is actually no.
And I show you that on the next slide, which is Slide 29. And this is a graph that was published in an article of a lay leading, a fashionista lady, Lauren Sherman of a business of fashion, in which he actually talked about the online market of luxury and session that started, you know, we could say in London around 2000 with the NetAppporter. And you can see that, the spend in the online luxury in fashion markets was increasing and is still increasing quite significantly and it's still growing, but it's interesting to see that, where you see the ticks to the, to the names of the, of the companies that we are still around with the ones that actually started this business but we are also quite often the main provider of the ones actually emerging in this business. So that is really interesting to see. Were there some changes?
Yeah. I think there were some changes, but the only thing that really remained is our core. We always focused on the premium express international delivery, and that is where we still play and continue to play a very important role So moving on to B2B E Commerce, because that is actually the next big thing, as I mentioned, so we are really on that. And it's interesting to see when you start to investigate what's actually happening in that business. So this is an example on page 31, an example of a traditional B2B player and you could say, is this ecommerce?
But at least this is something that is published on this website, and the far it gets is actually, just a contact us button on the right hand side of your page. That's it. So you contact you push the button and you will be contacted by a sales rep of that company. Is that B2B E Commerce no, it's actually not. But I think, you know, many customers are a little bit struggling on how their future distribution model will look like?
You know, will it be a part traditionally with, distributors and wholesalers? And will it be partially, like B2B E Commerce? You know, we think that there you can, as a company, reach a equilibrium in the traditional part and some part of, B2B E Commerce. And that is, you know, that is a fundamental question and every customer or company needs to needs to answer that, but that they need to answer it, that is absolutely clear. On the Slide number 32, you see actually an example of a B2B E Commerce player that is taking it very, very seriously.
And and the great thing that you see here is that it looks almost like a B2C E Commerce website. And this is what we are seeing now. This is an example of one of our Italian customers meets the worker. But the interesting thing is that, many of the millennials now are in core are getting into core positions with our customers, and they are running the procurement And they want actually this online experience more and more, and they want a very good experience not the one that you saw before, like you will be contacted by a sales rep. So that is in a development that is ongoing and that is very important.
And this is where we are going and are already educating our B2B customers on what is happening in the market, sharing experiences, but also sharing the learnings that we got through the power cube potential on B2C. So very interesting journey to go. And, you know, I think a lot of you during the COVID periods, were watching more than the usual, all kinds of Netflix series, and you were always curious to understand what's next. We are in the, in the same boat now, we are working on this B2B E Commerce. We have a lot of ideas.
We are working on education with material for sales reps. And, this is the next phase of our journey. We are working on new episodes. So we're working on technical developments, as Lane had explained in ODD and follow follow my parcel, follow my courier. And we are learning every day in this, you know, fast moving e commerce world.
And we really are convinced that we can support our customers in their journeys to grow their international business and at the same But in the meantime, I think it's important as a sales leader to say that we are instructing our sales rep on, for us, the most important ingredients for long term success, and you will see that on Slide 30, 5. So it is about focusing on the express volume on the international, international express volume that we want. It's unprofitable and premium ecommerce only. You know, it's not only the focus on volume. Volume doesn't really matter.
It really matters that you have the right volume with a profitable core. We really want to add value to our customers. As we have given certain examples on the, on the douchebags, or on the Sonos it's great that you can really make a difference and you can add value to the business of our customers, and we will continue in that consulting approach. Selling at the right price, I think that was, probably very clear from this, presentation. It's really about selling at the right price.
And this is something that, you know, you need to coach your sales reps, that, that is the most important thing that really matters. Always having a long term view, as a sales rep, think about when you are preparing an offer, is that offer, does that offer still holds when they are growing exponentially? Are you then also still happy with, with, the terms and conditions. I think in DHL Express, we have a really solid foundation for pricing and, controlling mechanisms. So that's, I think, very, very solid.
And last but not least, you know, continue to develop, on ecommerce innovations, and because in the end, we need to improve the customer experience, and we really need to make sure that our customers are happy and continue to be happy. So with debt, Martin, we have concluded our journey on the ecommerce within DHL Express?
Well, definitely, you led us, very nicely through the through the slides and, helped us a lot to understand on how you're working this vertical, how it all started, where we are right now, And, obviously, we wanna look at, where this is gonna be in a couple of years' time. So let let's go into Q and a, and we received a number of questions already. So thank you very much for that. I will start with those that we already on hand. However, I don't want to discourage you from further placing questions.
Maybe to start with some more, more of a definition question, because, obviously, particularly our US peers are also talking about, ecommerce to some extent, and there we hear about a shift from deferred to priority and how to deal with all that. John, I remember Ken saying if it's deferred, it's not express. So, do you have any any view to share on how we we see that in terms of travel time, are we focusing only really on the as fast as possible shipment, right?
Yeah. I think in the early stages, I'll try and be concise in the early stages. We, definitely kicked off with as fast as possible. And then I think as some organizations and merchants had their margin squeezed a little bit. The obvious thing was to say, can I pay a bit less even if I get it a bit slower?
I think we went through that cycle, and then we've come back, you know, to a a pastor's possible service. But a fast as possible TDI service because we're moving the things that can carry the cost of transportation. I think it's fair to say, though, that there are merchants that that require that deferred. And, you know, there's a lot of sharing and discussion going on with my colleague, Kenneth Allen's commercial team to make sure that the the European connect product, delivers those things in a sort of 3 to 5 day transit time. So it's horses for courses.
I think you know, after 5 or 6 years in this, we've landed with the right products and the right merchants who have, sort of, need for speed if you ex excuse the pun. And and other ones are finding their natural, service providers, some of which in different countries around the world is is frankly the worst of this. And, that's why we didn't want to compete price wise with another service provider. I think we could all coexist quite happily. On the customer's laptop and front page of their screen.
Okay. Thank you, John, for that. And, well, actually, that was something that was asked by Christian Lydeco from from UBS and, others as well. Let's continue with the question that we already had discussed a couple of times. And Andy Chu from Deutsche Bank, among others, asking this.
So you you mentioned that in volume terms, the B2C share is now somewhere in the mid to high forties. How do you see the balance between b to c and b to b, or should I say e commerce versus non e commerce driven volumes. How do you see that balance go going forward? Is there something like an sweet spot ideal balance?
I think, it's a good question. The one we need a crystal ball for, I'd, you know, I I think a little bit, we might normalize around 48% to 52% for the coming year. You know, because passenger aircrafts will be largely on the ground rather than up in the air, and we know this this pandemic situation is as much progress is being made on vaccines and things. We know this has got a little bit to run. So rather than, you know, the the the end of the beginning, from the beginning of the end, it's it's a sort of start of another wave of opportunity on ecommerce.
But, you know, as I've said, you know, B2B is started to come back over the last, 3 or 4 months as quite some form of positive growth now. So I think maybe we found found a number that we're gonna sit on for a while. And I I think things will normalize again in e commerce, you know, not necessarily grow as fast as the last 3 months, wherever. So I think we might have found some, some happy sort of compromise at the minute.
Okay. And that that would then probably also mean. And, again, Andy from Deutsche asked, so post COVID you think we are simply then, working from a higher absolute level of shipments and growth rates from there on should be more similar to what we experienced pre COVID, or is that something that can be isolated?
No. I think the growth rates will moderate. I think what I would say is that the, the windfall gains, as I've used this phrase, the things that have fallen into our lap a little bit will be quite enduring. And I say that in the sense that merchants have had to put an express offering this on their site by necessity as some organizations, you know, postal organizations that were relying on commercial air space, commercial airlines, and and belly space, put literally express offerings on their site, and I don't see those offerings coming off their site. I think there's an enduring nature of some business that has come our way, but I would expect some moderation, in terms of the overall growth rate in a sort of, you know, post 9 or or post 12 months.
And right now, we're 100% focused on delivering a great peak for our customers because everything at the minute says that peak defined as normally November 1 till the end of the year. But right now, we're saying peak is come early and we're already in it. The peak will be, you know, the hockey stick. So to speak, we'll be more acute even than last year.
Alright. Well, let's continue with a couple of more questions trying to figure out what the size and the dynamic in the overall market is. So Carolina from from Morgan Stanley asked, for example, how how do do we have a feel on where we stand in terms of mark share when it comes to ecommerce TDI like products or other way around And that's also something that we heard, from, Bank of America asking, where do we see our international peers competing in this field? Are and do we have any feel for something like a a market share situation?
Yeah. I think, the two comments I would make is that, the 38% global market share we have in TDI, I would expect us to be quite considerably north of that on international cross border, ecommerce share and had some estimates that know, put us 10 or 12 percentage points above that. But I think, you know, rather than rather than that, because we've done such a good job, that's not my point at all. I think you know, the thing is we were 1st in best rest. We got into this topic in 2016.
We we we talked with investors to somewhat a great deal of authenticity that comment. So we've been pushing this now for 5 years. I always said to the commercial teams, read a little bit understand a little bit, and we've all got to become many experts in this. So I think, that's been the drive for perhaps a higher percentage market share. Than we have on our total business.
And I think our competitors have been very focused on doing a similar thing, but perhaps with more of a a US lens to it. When you are already in all countries with all channels in all industries, we're in a pretty good position just to flick a switch on ecommerce and really take the opportunity, not just in UK and Germany, but in Czech and PG and everywhere else where people are making products from their home and putting them on their website and, sending them internationally. So I think it's a an answer of focus and getting in right at the front end of this.
So in other words, with with the pizza growing so far, your top priority is not your such such slice of the pizza. That's yeah. It's making a pie and digest.
He's got 4 or 5 brothers, so he knows what it's like sitting around the dinner table, but, it's picking the right slice, honestly. And it's it's, I think, this he promised opportunity is growing so fast in so many different ways. It's it's continuing to focus on the bit that we want. And both Mikhail and Leander said, This is not all about volume. This is about picking the bit that we want.
I'm delivering, the normal service quality for that bit.
Perfect. Well, that leads us maybe to the next cluster of questions that are more on on the product itself. And particularly also on the pricing and our our view on on that. But first of all, maybe, Mikael, something that you are having on your records do do you track what's, the what amount of our ecom volume is from shippers who for the first time or who are basically very new. So you said it's going to be a very a a lively customer, composition.
So what percentage of volume do we see with new customers compared to already more established customers to do that at the field there.
I think, I think it's difficult to pinpoint to a, percentage, It is good to see that in most countries, we, we see, you know, merchants popping up and growing very fast, and they, they could run into a space of, 6 months as one of the biggest customers in the country, but sometimes they also go down, quickly. I think the share of, like, new, new surgeries in, in, in a year, maybe around 10, 10% or something from the total B2C. It's a bit difficult to pinpoint, but that would be my gut feeling.
Okay. Well, talk talking about, on onboarding new customers, is there something like a special pricing scheme or an entry pricing level we heard already, you you wanna be be careful in what what pricing level you start with. Right?
Yeah. No. We, we created very clear, let's say, pricing models for, customers when they start And, you know, it's, as I said, it's very important to start also with the right price. So when customers are really growing, and then you still have the right price. So, no, it's very clear.
The, pricing teams and the sales teams are very much aligned on, what is the right level for the specific customers?
Great. Another question, well, from the upper ops point of view. I don't know whether you you, John or, Michael, when it comes to actually producing the the last mile service, our B2B and B2C sort of mingled in all countries on all routes or are there some, special micro, clusters set up for for B2C?
By and large, it's all blended in with our normal cycles, which is what gives us the efficiencies, obviously. There are some specific, for some of our largest customers that will be one that services the fashion district in, you know, FIP Avenue or something. But on the whole, B2B and B2C are blended in, and there's the density a drop density. And as the density of b, b to c continues to increase, it fits in perfectly with what's in what's on and in every courier route, if you will, and there's less and less distinction between what is a battery, what is an office, and what is a home any way, as time goes by, especially at the current times.
Maybe to add John, the I mean, there In some countries, you also have like specific evening routes, specifically dedicated on ecommerce when the density is actually met and when it makes sense. And then you can really reach, a high level of first delivery degree. So that is added to that in the blend of the day.
No. That's a good point. And when people were at home in the evening, it's less it's less of an issue now, but in the early days, those evening deliveries were very important. And all these answers, we're giving just, at the minute, deal with that bottom arrow on the on the chart, moving it from a red downward arrow to a sort of green a firmly green last mile efficiency. Okay.
One further question more to the geographic split, are there any cluster geographies when it comes to where the consumers sit? Where do we see the most volume going into in in terms of countries? And is there a special focus on the European e vendors, or is this and Mikael talked about 160 plus countries where where we have that approach, So how how is the e vendor location sort of distributed?
I think it's pretty global now. We started off, in the sort of UK and Germany and the US and then rapidly, and I'm talking as long ago as 2017 18. There really is something in it for everyone. From a good product. In fact, one of the slides landed showed showed the sort of, you know, the far and wide nature of all the things that have been you know, all the innovative products that are being built and how they come from literally anywhere.
In terms of, lane destination and density, you know, right now, the US, Canada, Mexico, and Australia are up, you know, by far and away. Our largest destination. So that that that talks to network planning, it talks to the efficiency of, of ground ops and making sure that whilst our overall growth of ecommerce might be one thing, the the spread of that growth and the the the top end of that growth is obviously a lot higher. So we need to consider in all our network planning, the ability to move new material to those 4 hotspots and there's 4 or 5 more and be able to deliver last mile excellence especially during the week.
Alright. Good. Coming to a name that you used to be more prominent, and then I would cussions in the past, but still, Amazon, how how do you see Amazon playing in this specific field? Is it something where you see similar developments like in, the domestic markets where Amazon is starting to develop its own capabilities?
No. I think I think, you know, my answer on Amazon and either of the guys can jump in obviously, we're a key TDI provider for them or, for Western foremost, a great customer, and a great partner. They've built up and established their networks in domestic environments and Germany and the US and a number of others, but, again, it's a little bit back to the size of size of the pie and the overall growth that everyone's experiencing. And you know, we're in a position now where we'll take lanes that are, are ripe for us and, a right price point, and they they look elsewhere for, in some occasions, maybe their own their own ability to deliver in other cases other providers. So I think we work quite well with them.
In that sense and don't see anything really changing there. Okay.
In in terms of market potential, Mikhail, you you you touched on B2B being the next big fund you're you're starting to to sail in with this. Do we have any projections that you may want to share on on generally speak the e commerce penetration into the big B2B market. Do do we do we have a feel how how that's gonna develop over the next number of years? And is that something you probably said? It is already accelerated now under Robert?
Yes. I can answer that question. So this is Lino speaking. If we look at the total market size of B2B eCommerce and if we look back at 2019, it was already estimated as a market with the value of 1,300,000,000,000. So that's an overall market size.
Already bigger than the B2C Ecommerce markets. So that's just to share some numbers. And of course, the estimation of that is that how that share will only increase over time in overall B2B ecommerce or in overall B2B sales, my apologies. And that's also on the back of COVID 19 because people now, they want to transact online. And as Michill mentioned, the traditional way of of doing sales, in some cases, completely came to a halt where before it was a lot of trade wars and events, sending salespeople overseas to do the deals, etcetera.
That is nowadays not happening at all anymore, but customers and B2B purchasers, they want to transact, which is why they turn to an online B2B's channel. So While it's already a big market and while it's already a very fast growing market, estimations are that the market will only grow bigger, but of course, Freedom will also get our fair share of by as well.
The, the really interesting thing on B2B online, and Leander is exactly right, is to how additive, this this becomes for company's sales and top lines and whether they're able to move revenue lines quicker, the obvious question is, well, are they simply selling something online that they would have before sold by a dealer network? And I think that's gonna be the case in some product but definitely, and we're learning this already. This is complimentary to existing level of sales and that they're selling to new was that otherwise wouldn't, be sent to the big brochure of all the parts. Wouldn't have a, a monthly trading level that would typically get them a field sales visit or get them on the customer list, but when they're able to see the shop now button just like anyone else is and purchase online and purchase much smaller order values. I think, what we're hearing from some industries, especially component, electronic components and things like that is that it's it's complimentary or additional to, existing sales levels.
I think opportunity and why B2B will ultimately be bigger be bigger than B2C, but, we're on one runway ahead of us.
Then I think it's also good to mention here is that, so we have gained a lot of experience in our B2C journey. And basically, you could apply the same mechanisms and dynamics in the B2B e Commerce It's also about, website health check, similar web, educating and, you know, supporting our customers to grow faster.
Okay. Very useful, sir. We got a couple of few more questions still to be covered, and we don't wanna overstretch your attention span out there. So, maybe just a quick one, John Brexit how do we stand there? Have we, equipped ourselves with the, right resources to deal with the various scenarios that are likely particularly thinking of, customs, clearance, expertise, etcetera?
It was Sabaden Powell said, be prepared. I think that's everything we've had quite some time to get prepared and there's been some twists and turns along the way in terms of what the preparation is, significant the interoperability of aircraft tails and customs people. And, I think we're in a very good position now. We're talking about customers as much as possible about, whatever we can, whatever level of detail and specificity we can, but, very prepared. And, thankfully, we've got the asset base, and we're able to get ourselves in a position whereby, whatever happens on January 1 will be ready for.
Excellent. To to Mikaela and Leonard, the if I look at the customer industry mix in commerce and you you shared with us that with us on, page 9 of the presentation. What do you see as being the strongest candidate for, above average growth or you think it's going to be a constant change in what customer industry is going to have a good time at a particular point in time?
I think one of the industries, which definitely now has potential, which was mentioned in the presentation as well as life science and health care with a direct to patient opportunity with people not being able to visit the pharmacy or go to a hospital, at least not as easy as it was in the past. I think that is one where it's definitely potential. And other than that, I think the opportunity is as big. We're not as extraordinary. The opportunities other than that is, is, it's similar size of opportunity for all the, for all the different sectors and for all the different products and industries, etcetera.
It's not as well specifically themselves besides that license and those
Yeah. Would have thought so. And, we also got a few questions, referring to our other white paper that we put out recently on sense and there's a variety of solutions to that, but I understand you are prepared to deal with that in in your field where where where appropriate. Excellent. Now, obviously, there's one question that we also get naturally in the other fields where we see a strong tailwind from e commerce growth and John, that's to you.
So if we assume that this was a faster than expected growth to the current level, what does this mean to your investment plans going forward? Any immediate changes to the investment mix, ground versus aviation, or you think you are capable of, dealing with the current situation without a dramatic change to overall CapEx levels?
Good question. The answer would be no particular shift in our 1,000,000,000 meat and potatoes, as I call it, annual investment. All of our hubs are none just about to be any of the completely retrofitted or replaced or sort of built again from scratch. Brussels is a great example of moving across the other side of the airport, but having a brand new hub there. So, certainly nothing, no big change in hub I think what it does place in is an acute need on additional routes and additional PUD capability in, in any one country, we're adding literally 100 per ounce at the minute in the U.
S. As a destination. But in terms of overall service center gateway, hub or aviation, I wouldn't say any shift in how that that 1,000,000,000 of our CapEx every year is proportionately distributed.
Alright. Perfect. Excellent. Yeah. Very good question.
And Mark, Barclays was the sender, so thanks for that. I I think that pretty much brings us to the end of the list of questions that we have. Again, thank you very much out there for the, a very good contribution, I think, in terms of topics and areas, we pretty much covered all the aspects that we what we thought would be worth covering when it comes to this particularly part of your business. So with that, we wanna keep it in the promised time frame. I thank you very much, John Pakeel, Leonard, for, really doing that deep dive deep dive with us and, the theme gonna be with us for longer and that's a tailwind.
And so with that, I'm looking forward to continue to exchange with you guys out there. You know, the the scheduled, events for the next couple of weeks months. So I'm looking forward to that. And in the meantime, I would say have a great rest of the day.