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1 billion Turkish lira investment goal

Publication: Milliyet Gazetesi

Announcement:1 billion Turkish lira investment goal

Spokesperson:Aras Kargo Managing Director Utku Ayyarkın.

Could you elaborate on Aras Kargo"s growth rate in 2020 and investment goal for the upcoming period?

As a pioneering and innovative shipping company in Turkey, we currently provide our services through 28 transfer centres, over 1,000 branches, around 16,000 employees and a fleet of over 4,500 vehicles. Over the past few years, we have achieved a double-digit growth rate on the back of our technology-driven investments, operational experience and expertise. We realise our investments with the goal of implementing digital transformation in every step of our business processes. We have invested nearly TL 300 million in our transfer centre, IT infrastructure and operational processes in the last two years. In 2020, we achieved a growth of 65 per cent. Over the first quarter, we maintained this level of growth and continued to grow by more than 65 per cent.

Could you touch upon the projects that Aras Kargo has materialised in terms of digital transformation, a major agenda item?

We see ourselves encircled in a process of transforming from an operating company to a technology company. Recently, we have stepped up our operations processes by investing almost TL 300 million, thus setting an example for the sector. Our investments will open up in two areas: Branches and Transfer Centres. Amidst our investments for our branches, we launched our uninterrupted data security project to ensure that our operations are not interrupted even during times of natural disasters and earthquakes by securing our machines. Using our centralised data system project, we collected customer data previously kept in the branches in a single centre and prevented erroneous data. The self-service application we developed paved the way for our SMEs to enter the digital world. We expanded our mapping infrastructure to manage the increasing address and data operations and launched the courier route optimisation project. We made investments in our handheld terminals for instant access to data. We developed our self-service applications and renewed our voice response system and mobile application.

In an attempt to protect the health of our employees and customers, we have also diversified how we deliver shipments. We have adopted contactless delivery with ID card reading and SMS code. With a view to making this process as health-friendly as possible and ensuring that our customers can reach us at any time, we have completely improved our call management and increased our call capacity by two and a half times. The automation investments we have made in 8 transfer centres have increased our capacity by more than 300 per cent allowing us to better manage the time and capacity for our transfer centre investments. We managed the increasing business volume with technology investments and new hires. Throughout this process, we have provided new employment opportunities for more than 1,000 people. We achieved all these changes in solidarity with our nearly 16 thousand teams working on the ground every day. By tripling our hourly processing capacity, we have thus become the most important player in the industry producing work with automation.

What can you say about the impact of the pandemic on Aras Kargo"s business cycle?

We have seen an unprecedented change, both socially and economically, unfold with the arrival of the pandemic in our lives. On a global scale, there has been a significant change in the way all sectors do business. We are witnessing in particular the relevance and rise of e-commerce and the shipping sector in the supply chain both globally and domestically. The e-commerce sector in Turkey recorded very rapid growth in 2020, including the pandemic period. The volume of e-commerce in Turkey increased by 66 per cent compared to 2019, from 136 billion lira to 226 billion 200 million lira. This situation was echoed in our business volume and resulted in significant changes in our business model. It honestly felt like trying to change all 4 wheels of an Aras Kargo vehicle whilst it"s on the move at a speed of 100 kilometres on the highway. The number of parcels that our marketplace and e-commerce customers required us to carry almost tripled in the first days of the pandemic in our country and during the campaign period. Reciprocally, the number of parcels from our B2B customers shipping from facility to facility decreased. Whereas before the pandemic we went to one location and delivered more than one product (e.g. 5), deliveries to households increased under the impact of the pandemic and our business model has completely changed so that we now deliver one package to each location. Under this new business model, we have started visiting many more addresses and carrying much smaller parcels. The number of addresses we visit every day has increased from 500 thousand to over 1 million. By the end of 2020, we visited 200 million addresses, which means we visited the population of Turkey more than twice. Although we faced some difficulties at the beginning of this process, which the whole world experienced for the first time, we continue to manage this process successfully thanks to the investments in automation and IT infrastructure that we started in 2016 and have accelerated every year, as well as our operational know-how and expertise.

Can you briefly talk about your 2021 vision? What was it like at the beginning of the year? Any upcoming innovations in the coming period?

Moving forward, we expect the shipping sector to continue to grow due to changing consumer habits, e-commerce developments, the global pandemic and investment in digital transformation. In the wake of the sector"s digital evolution, business processes will be simplified, risks reduced, with increased efficiency and capacity. Looking at these developments, we have set quality as our priority for 2021. Correspondingly, we plan to further improve our quality with our investments in integration, route optimisation and integrated management systems. We have set a total investment goal of TL 1 billion for the coming period. It is our intention to create a unique customer experience through step-by-step customer information, buyer convenience, CRM and customer service management. Through our ongoing investments in transfer centres and IT infrastructure, we will maintain our leading and innovative position in the industry. We will focus on our courier route optimisation project and technological investments in our transfer centres in Anatolia after the 4 major cities. In 2021, we aim to consolidate our market leadership with these projects.

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