Capitalising on SA’s e-commerce growth
• Convenient parcel management solutions are key, writes Lynette Dicey
Over the past few years, SA’s courier, express and parcel (CEP) industry has experienced some consolidation with larger entities acquiring smaller or niche players. This consolidation trend has contributed to reshaping the competitive landscape within the sector, says The Courier Guy CEO Craig Pitchers.
The Courier Guy, a leading
courier service with an extensive network of delivery partners including a fleet of about 2,000 last-mile delivery vehicles nationwide, kiosks and more than 1,200 pudo smart lockers across the country, was recently 100% acquired by private equity firm Adenia
Partners. The Mauritius-based firm says the acquisition is aimed at capitalising on the growth opportunities in the country’s last-mile delivery sector, driven by the exponential growth of e-commerce and the introduction of global marketplace giants such as Amazon Marketplace to SA. SA ’A s e-commerce RationalStat Report market says is expected to reach $16.3bn by 2030, with an annual growth rate of 15%. Statista’s Digital Market Outlook estimates by 2027 there will be 37.9-million consumers using e-commerce services, up from 27-million in 2022. A Statista survey revealed that more 70% of respondents mentioned “direct delivery to my home” as the main driver behind online shopping.
Pitchers says the exponential growth of e-commerce, particularly in the business-toconsumer segment, has positively impacted The Courier Guy, aligning with the business’s strategic objectives and contributing to sustained growth and expansion.
“We expect that the imminent launch of Amazon will intensify competition in the e-commerce sphere while catalysing further growth in online transactions. This heightened market activity is projected to result in increased parcel volumes, particularly within the business-toconsumer space,” he says.
As demand grows for a fast and reliable online shopping journey, the importance of trust and reliability at the last mile — the final step in the delivery journey — is critically important. Pitchers says The Courier Guy’s operational model focuses on localised services, leveraging in-depth knowledge of small service areas to ensure exceptional customer experiences and high service levels.
The evolving landscape of consumer preferences emphasises convenience and instant gratification which, in turn, significantly influences the strategies adopted by retailers and last-mile delivery providers, says Pitchers. “The introduction of innovative solutions like electronic parcel lockers — also known as pudo lockers — addresses the growing demand for smart and convenient parcel management solutions, catering to evolving consumer needs.”
In addition to the pudo locker network, the company also introduced one-time pin (OTP) delivery methods to enhance security, efficiency and environmental sustainability.
However, despite the persistent demand for online convenience, shifts in consumer purchasing behaviour, influenced by economic variables, pose significant challenges for the industry, says Pitchers.
“Macroeconomic factors such as fuel prices, inflation and rising interest rates exert considerable influence on consumer discretionary spending, directly impacting the frequency and scale of online transactions.”
Pitchers says addressing these challenges requires a concerted effort towards enhancing operational efficiencies while maintaining service excellence with lean operational structures.
“To safeguard both our own and our customers’ assets in an environment of increasing crime, we have introduced a number of risk mitigation measures. These enhanced security protocols include surveillance, tracking and escort services, which are essential components in minimising operational vulnerabilities.”
The Courier Guy serves diverse geographical regions from urban centres to remote areas. Pitchers says the way its routes are structured and organised are also crucial in terms of catering to the needs of business-to-consumer clients.
The industry has not witnessed an influx of new entrants in recent years, arguably due to the fact that there are considerable existing barriers to entry. Pitchers says these include the high cost of establishment for prospective new players, particularly considering the expansive geographic coverage required in SA. It’s also exhibiting varied growth patterns across different market segments. “The business-to-consumer (B2C) and consumer-to-consumer (C2C) sectors are demonstrating robust expansion, driven by the surge in online shopping. Conversely, the business-tobusiness (B2B) segment exhibits a slower growth rate. This divergence can be attributed to the burgeoning adoption of online shopping, marked by an expanding user base, larger basket sizes and repeat purchases.”
Despite a tough operating environment, Pitchers says the business recorded substantial growth over the past year, with revenues and targets exceeding expectations.
“We remain committed to navigating industry challenges, delivering exceptional service and embracing innovation to meet the evolving needs of customers in an increasingly dynamic marketplace,” he says.
IN ADDITION TO THE PUDO LOCKER NETWORK, THE COMPANY ALSO INTRODUCED ONE-TIME PIN (OTP) DELIVERY METHODS