UPU News : Partnerships could be key to e-commerce success

07.09.2016 - Postal CEOs from around the globe discussed harnessing e-commerce opportunities at the UPU World CEO Forum in Paris on Tuesday.

UPU Director General Bishar A. Hussein discusses the competition with the CEO of Correo Argentino, the chairman of the Indian Postal Services Board and the CEO of NIPOST (left to right)

The forum first focused on leveraging the Post’s strategic position in the competitive e-commerce landscape.  

During these discussions, participants debated whether e-retailers and e-marketers should be treated as friends or foes, with several CEOs sharing their models for collaborating and competing with private companies. 

Correo Argentino CEO Jorge A. Irigoin explained that, while online marketplaces are partners of the Post now, they are likely to expand into logistics in the future. 

“There is a threat, but, at the same time, an opportunity for us to be more competitive, have a better cost position and deliver higher quality,” he said. 

For its part, India Post revealed that it has close partnerships with e-retailers, including Amazon. 

Indian Postal Services Board Chair Boyapati Venkat Sudhakar said the Post’s reach in semi-urban and rural areas, where demand for e-commerce goods is high, made them an attractive partner to e-retailers. 

“It makes no business sense for them to develop these networks now,” said Sudhakar, adding that the Post currently has more than 1,000 e-commerce partners.

 

Leading with this advantage meant the Post was in a better position to work with e-retailers and tailor services to their needs.

Across borders

Many CEOs agreed the Post’s expansive network and reputation as a trusted entity for customers provide an important vantage point in the logistics industry.  

However, some concluded that facilitating cross-border exchanges in the postal community remains a challenge. Some Posts still partner with private companies for international delivery and others lack direct connections with each other. 

While it may be easy for countries such as France and Germany to exchange parcels quickly, La Poste de Djibouti CEO Bahnan Ali Maidal said the same quality network doesn’t exist for developing posts. For instance, an item from Morocco will likely travel through four countries before it arrives in Djibouti, he said. 

“When we talk about a postal family, it must be a real family, otherwise certain members will be left out. We have to work together... Some African Posts need help from their big brothers,” said Maidal. 

UPU Director General Bishar A. Hussein noted that it is precisely the UPU’s role to facilitate global postal interests.  

“The Post visits almost every single household on this planet on a daily basis. No other single network has this capacity,” the director general remarked. 

“I think our network is good enough - we just need to strengthen it,” he said.

Engaging stakeholders

As Posts make the transition from the traditional letter-post business to innovative e-commerce solutions, Australia Post CEO Ahmed Fahour reminded postal leaders not to leave customers and other stakeholders behind.  

“The deciding factor for all of us … is not how smart we are in predicting the volume rate decline in letters, or critically investing in e-commerce or the trusted identity of financial services. It is about how we deal with the transition of these [historical] institutions [such as the Post],” Fahour remarked.  

For instance, customers in rural China are relatively unfamiliar with e-commerce, according to China Post Group Vice President Li Xiong. Li said this designated operator is trying to change this by explaining how e-commerce can help such customers trade goods with urban centres.