India Post, a trustable service for e-commerce but challenges ahead

  • M Rajendran, Hindustan Times, New Delhi
  • Updated: Aug 26, 2015 23:02 IST
File photo of India Post office. (HT Photo)

Yangchan Dolma gets excited every time she receives a parcel from Amazon or eBay at her office in Leh though it’s not necessarily meant for her — the 59-year-old is just one of many female postmasters employed by India Post.

Business has been good lately, as the government-run postal agency has beaten competition from private courier companies, thanks to e-tailers’ growing preference for its wider reach and a well-entrenched network.

The shifting mix of postal volumes in favour of parcels has come to its rescue after India Post lost market share in the past few years to courier companies in the letters segment, its revenue mainstay over decades.

“We have the ability and experience to reach far-flung areas and the well-established credibility of our employees that makes us the first option for e-commerce companies,” Kaveri Banerjee, secretary, department of post, said.

The huge opportunity thrown open by the e-commerce boom has got India Post’s 155,000 employees, including Dolma, duly excited. But the agency needs to ensure it remains competitive in service delivery and tech-readiness while it rides the new revenue train.

Banerjee is bullish, and has challenged her team to achieve 150% revenue growth in 2015-16. In the last four quarters, the company has made steady gains from express/business parcel traffic.

India Post recorded R105.51 crore revenue in 2014-15 and R30.59 crore in the first quarter of 2015-16. However, its traffic has fluctuated and that may be a cause of concern.

E-commerce companies are choosing India Post for its reach and efficient workforce but complain of its inability to accept large volumes.

“The reach that India Post provides is unmatched and has helped us reach new destinations with this partnership,” Vidmay Naini, director & business head, eBay India, said.

Minister for communications, IT and post Ravi Shankar Prasad told HT that in the area of e-commerce shipments, 36% growth was achieved by India Post in the past year.

“I have asked all the circles to achieve consistently higher growth in e-commerce cash-on-delivery collections every year,” Prasad said.

In 2013-14 India Post handled cash on delivery of about R100 crore while in 2014-15 the figure was R500 crore.

“We deliver more than a million orders a year through India Post… service has markedly improved in the past six months with better delivery timelines. The overall delivery timelines have improved by over 25% in the past six-eight months,” Ashish Chitravanshi, VP-operations, Snapdeal, said.

India Post has tie-ups with various e-commerce players such as Flipkart, Myntra, Snapdal, StarCJ, etc, to provide distribution and cash-on-delivery services. A pilot project has been started in Mumbai and Bangalore with Amazon for providing next-day assured delivery of Speed Post articles through identified post offices.

The minister has directed India Post that e-commerce should become the focus area of postal operations.

“…through the reach of India Post we are enabling artisans/entrepreneurs to start selling their goods not only across India but 206 countries where eBay buyers are present,” Naini said.

Another major player, Shopclues, is satisfied with its year-long association with India Post. But it would like India Post to upgrade its logistics.

“We have customers coming from tier III and IV towns and India Post has the reach. While we would like to increase the load (business), the challenge is the inability of India Post to pick up load in a fragmented and distributed environment,” Vishal Sharma, vice-president, operations, Shopclues, said.

E-tailer Amazon is optimistic about the prospects of its partnership, too.

“We are focusing on opportunities to improve customer experience through the use of new technology initiatives. We have integrated Amazon and postal systems to electronically enable information sharing,” Samuel Thomas, director transportation, Amazon India, said.

Banerjee is conscious of the growing demand in rural and semi-rural markets. “We are in the process of augmenting technology, pick-up vans, warehouses and clearing systems — Delhi, Mumbai and Hyderabad have such systems and other major cities will get them soon.”

A more hi-tech environment and improved logistics could enhance India Post’s competitive edge to drive revenue growth, experts feel, and boost the feel-good factor for employees like Dolma.

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