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December 15, 2016

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Asian postal firms turn to e-commerce

WITH the pre-Christmas rush at its peak, a serpentine network of conveyor belts at Singapore Post’s new logistics center 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 US$1.9 trillion this year and top US$4 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 launched its e-commerce 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 e-commerce technology provider Jagged Peak and e-commerce firm TradeGlobal.

“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 falling sharply, e-commerce offers hope for national postal firms in Asia if they adapt quickly and do battle with giants like FedEx and DHL.

Asian postal firms “are doing some very innovative things to take advantage of e-commerce”, 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 e-commerce provider, Buhler said.


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