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Tuesday, June 16, 2015
India Post readies for more tie-ups with e-commerce firms
For India Post, the new-age business is going to be a key revenue driver with phenomenal rise in daily mailing volumes as it is increasingly looking at associations with entities such as Amazon, Flipkart, Snapdeal and YEP.
MUMBAI: When did you last remember a postman knocking at you door? Even though it's hard to recall such an incident, your friendly neighbourhood postman may now appear at your doorstep more often, delivering a book or a gadget bought on an e-commerce portal.
The department of posts now delivers more than two lakh e-commerce parcels daily, double of what it used to a year ago, according to a national estimate.
"E-commerce fulfillment (shipping) is a big business opportunity for us," said Ashok Kumar Dash, chief postmaster general (Maharashtra Circle), India Post.
"Associations with e-commerce portals are likely to go up in the coming days, and the quality of delivery in farflung areas will be crucial." For India Post, the new-age business is going to be a key revenue driver with phenomenal rise in daily mailing volumes as it is increasingly looking at associations with entities such as Amazon, Flipkart, Snapdeal and YEP, a move aimed at revenue generation for the 200-year old straggler.
For instance, in the Mumbai region of the Maharashtra circle, daily Amazon parcel deliveries have risen to about 7,000 a day at present from a mere 200 shipments in November, two people with the direct knowledge of the matter told ET.
Flipkart too has started shipments to its customers using the postal services. In the Mumbai region, it has been sending around 700-800 parcels daily since the past three months, said one of the persons in the know of things.
Two years ago, the e-commerce revenue was below Rs 200 crore, and it was estimated to be about Rs 400-500 crore in the year ending March 2015.
All-India revenue from e-commerce is expected to be Rs 900-1,000 crore in FY16 for India Post, according to PN Ranjit Kumar, postmaster general (Mumbai), India Post.
"Revenues are likely to rise in this segment," he said. Both, however, declined to share further details. The e-commerce sector in India has grown by 34% (CAGR) since 2009 to touch $16.4 billion in 2014, and is expected to be about $22 billion in 2015, according to a recent report by PwC. This in turn has triggered a growth in the logistics business.
India's logistics business is estimated at $100 billion, and India Post is hoping to cater to the growing demand in this sector, especially in tier-II and tier-III cities where the presence of private courier companies is limited. The postal department is trying to use its post office network of over 1.5 lakh branches.
One of the advantages the department is its huge land bank which is crucial for logistics business, according to a senior government official.