Central, Eastern Europe express market ready for double-digit growth
The express and delivery markets within the EU 10, the Central and Eastern European countries that joined the European Union in 2004, are set for double-digit growth rates over the next five years, according to a report from Datamonitor.
Datamonitor’s “Eastern European Express and Parcels Delivery Market Report 2005” forecasts that the express delivery market in this region will be worth 2.7 billion euros ($3.25 billion) by 2010.
The countries that joined the EU in May 2004 are: Cyprus, Estonia, Latvia, Lithuania, Malta, Slovakia, Slovenia, the Czech Republic, Hungary and Poland.
“Borders between and among the EU 15 and the 10 new members have been effectively eliminated,” said Emilio Pedrinaci, express analyst at Datamonitor. “This combined with Central and Eastern Europe’s large pool of skilled, well educated and less costly workforce, and the fact that accession states labor costs will remain below those in traditional EU member states, offers an enticing opportunity for pan-European express and parcels delivery firms to establish low cost operations in the region,” said Pedrinaci.
Datamonitor said Poland has the largest current share of the Eastern European express and parcels market in value terms. The Czech Republic and Hungary are the second and third-largest markets, respectively.
The London-based analysts said companies wanting to move into the region must do so quickly, as global integrators are already making their presence felt.
According to the report, the major players in Poland’s express and parcels market control nearly 80 percent of the market, with DHL Express Polska being the largest with an estimated 31 percent share. Stolica, acquired by UPS at the beginning of 2005 is the second-largest player with an estimated market share of 18.6 percent.
“The favorable costs and skilled readily available workforce certainly make the new 10 EU states ripe for the picking,” Datamonitor said.
Datamonitor also reported that the Western European express market is consolidating, and that all the major players are moving towards standard global product offerings with minor regional differences.
“Most players in the parcels delivery market are moving towards express products with time-definite/faster delivery times and complex value-added features. In addition, express or faster delivery times are spreading to heavier volumes, and the weight-based segmentation between services is becoming increasingly blurred,” Datamonitor said.
“The elimination of export duties and trade barriers, as well as the ensuing liberalization of markets in Europe, has made international trading between member states easier. This is reflected by the proportion of international services in the European express and parcels market, which is growing at a much faster pace than domestic services.
“However, players need to secure strategic partnerships and enlarge their geographical coverage; otherwise they stand no chance of competing with the integrators and the larger pan-European postal houses, some of which have already established a presence,” Datamonitor said.