Asian postal ser­vices adapt to post-mail era On­line shop­ping weighs on tra­di­tional de­liv­ery com­pa­nies

Kuwait Times - - BUSINESS -

With the pre-Christ­mas rush at its peak, a ser­pen­tine net­work of con­veyor belts at Sin­ga­pore Post’s new lo­gis­tics cen­tre moves parcels des­tined for ad­dresses across the world in time for the fes­tive sea­son. It is a scene re­peated in sort­ing of­fices around the globe in De­cem­ber, the busiest time of the year for postal firms with armies of work­ers toil­ing to get presents de­liv­ered on time.

But times are chang­ing and the ex­plo­sion of on­line shop­ping is forc­ing tra­di­tional de­liv­ery com­pa­nies such as SingPost to adapt or be damned. The growth of web­sites such as Amazon and Alibaba means cus­tomers can avoid crowded high streets and buy any­thing from mo­bile phones to sports equip­ment on­line and send them straight to loved ones. US-based re­search firm eMar­keter said on­line sales are ex­pected to reach $1.9 tril­lion this year and top $4.0 tril­lion by 2020.

And tra­di­tional firms are mak­ing moves to keep up. The nearly 200-year-old SingPost, which is partly owned by China’s Alibaba, last month in­au­gu­rated its ecom­merce sort­ing of­fice ca­pa­ble of handling up to 100,000 parcels a day.

It also now pro­vides a ser­vice set­ting up re­tail web­sites for clients and al­lows for on­line pay­ments while it has teamed up with brands in­clud­ing Adi­das, Tim­ber­land and Xiaomi to help ex­pand their on­line re­tail sales in the re­gion. And last year it ex­panded its US and Euro­pean pres­ence by buy­ing ecom­merce tech­nol­ogy provider Jagged Peak and ecom­merce firm TradeGlobal.

‘Change or die’

“In this new dig­i­tal age, the lives of the tra­di­tional postal com­pa­nies are com­ing to a turn­ing point: change or die,” said Cris Tran, an an­a­lyst with con­sul­tancy Frost & Sul­li­van. With tra­di­tional mail vol­umes drop­ping dra­mat­i­cally, ecom­merce of­fers hope for na­tional postal firms in Asia if they adapt quickly enough and do bat­tle with giants like FedEx and DHL. This year’s “Sin­gles Day” ecom­merce pro­mo­tion by Alibaba on Novem­ber 11 grossed 120.7 bil­lion yuan ($17.8 bil­lion), smash­ing last year’s sales record of 91.2 bil­lion yuan. Asian postal firms “are do­ing some very in­no­va­tive things to take ad­van­tage of ecom­merce”, said Brody Buh­ler, global manag­ing di­rec­tor for post and par­cel at con­sul­tancy Ac­cen­ture.

Ja­pan Post has part­nered with con­ve­nience stores to pro­vide 24-hour de­liv­ery, while Pos Malaysia is boost­ing its ware­hous­ing, lo­gis­tics and other ca­pa­bil­i­ties in a bid to be­come a full-ser­vice ecom­merce provider, Buh­ler said. “Pos In­done­sia in­vest­ments in ca­pa­bil­i­ties such as lock­ers and faster ful­fill­ment from China are great ex­am­ples of postal or­ga­ni­za­tions in­vest­ing to take full ad­van­tage of the op­por­tu­nity ecom­merce pro­vides for growth,” he added. In the year ended March 2016, ecom­merce-re­lated rev­enues ac­counted for 35.8 per­cent of SingPost’s turnover which crossed Sg$1.0 bil­lion ($707 mil­lion) for the first time, and that is tipped to rise fur­ther.

Teo Chung Piaw from the Na­tional Univer­sity of Sin­ga­pore’s Business School said Asian postal firms must also com­pete with do­mes­tic star­tups and de­liv­ery spe­cial­ists such as Ja­pan’s Ta-Q-Bin and China’s SF Ex­press. Reg­u­la­tion of state-owned postal firms is also slow­ing cru­cial re­forms that will al­low them to com­pete bet­ter, he added. Gov­ern­ment-owned Aus­tralia Post needed reg­u­la­tory ap­proval to raise the cost of a ba­sic postage stamp, a move it said was nec­es­sary to ease losses in its tra­di­tional let­ter business. — AFP

SIN­GA­PORE: A worker places in­bound parcels on a con­veyor belt for cod­ing at the sort­ing sec­tion of the Sin­ga­pore Post (SingPost) ecom­merce lo­gis­tics cen­tre in Sin­ga­pore. — AFP

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.