CEE and CEE(Communication E-commerce E-customer and CEE)

SEF on Parcel IPC, October 26-27, 2010

Levente Laszlo, Magyar Posta

� Changing of communication habits

� Changing of purchase habits

� Changing of postal business � Changing of postal business

� Case Study – cross-border e-commerce

� 1998 – internet penetration on the world

� 2008 - internet penetration on the world

� 2010.10.26 (14:59) e-commerce = 449 billion EURO

� World e-retail spend 2009 = 485,4 billion EUR

� Changing of communication habits

DO YOU KNOW YOUR CUSTOMERSYOUR CUSTOMERSCOMMUNICATIONHABITS ?

� CEE EU-countries market size (inhabitants)

An average of 60-75% of the population is living in urban areas - except Romania, where the partition lies by 50%

COUNTRY POPULATION

Bulgaria 7’700’000

Czech Republic 10’200’000

Hungary 10’000’000

Poland 38’200’000

Romania 21’700’000

Slovakia 5’400’000

Slovenia 1’990’000

TOTAL 95’190’000

source: Study from PriceWaterHouseCooper, 2008

� 2009 - Internet penetration and users in CEE

Internet penetrationInternet penetration (average) reached the EU average in most of the CEE countries.

Penetration is above 80% in the TOP 20 cities (60% of inhabitants)

Internet usersInternet users vary between 10 – 40 million inhabitants on country

Increase of internet users is accelerating – average increase is about 30%

Source: Gemius, CEE internet 2010

� 2009 – Internet broadband penetration CEE

Broadband penetration

There is still a difference in broadband penetration among the European countries- 37% (average) Western Europe- 11% (average) CEE

Source: Gemius, CEE internet, 2010

� Changing of communication habits the real problem

� Booming of social media -> Facebook, Twitter, YouTube, LinkedIn, Xing

� Traditional letter mail is no longer sexy for the young longer sexy for the young generation

� How to remain attractive ?

� Changing of purchase habits

DO YOU KNOW YOUR CUSTOMERSYOUR CUSTOMERSPURCHASEHABITS ?

Multi-taskers: those who use / access the Internet whilst also watching TV , listening to music, speaking on phone

� Multi-taskers – change of buyers habits

Source: Media Meshing: Meet Europe’s media multi-taskers, 2010

TOP multi-taskers� 77% Denmark and UK� 73% Germany� 71% Belgium

� What are multi-taskers doing ?

� 34% of Internet users are searching a product with purchasing intention

Source: Media Meshing: Meet Europe’s media multi-taskers, 2010

Purchase-driving effect of aTV and internet/mobile Ads.

� Two in three say that Internet ads have driven them to make an on-line purchase

� Where are the purchases realized ?

Source: Media Meshing: Meet Europe’s media multi-taskers, 2010

The 21st

century consumer is changing its

� Be consumer centric (but how ?)

changing its purchase

habits!

� Changing of postal business

YOUR CUSTOMER IS CHANGING - ARE CHANGING - ARE YOU FOLLOWING HIS NEW HABITS ?

�European Parcel market 2016 volume of B2C

� Total market: 3.1 b parcels, EUR 8–11b by 2016

Source: TNT, 2009

� The Hungarian on-line market 2001 - 2010

� The Hungarian on-line market is estimated to reach by the end of 2010, EUR 450 million (+35%)

� The Hungarian on-line buyers profile

55% of the on-line buyers are males – with 21% more than the females.

By 2012 male vs. female will be 50-50%

12% = 1,075,000 Hungarian citizens

above 12 years have purchased goods in the

last 12 month on the internet

� Average value of a purchase order (2009, Hungary)

The average purchase order in 2009 was of HUF 11,000 (EUR 40,- )

15000

20000

25000

0

5000

10000

2003 2004 2005 2006 2007 2008 2009 2010

exclusive on-line traditional webshop average purchase order

�Reasons for shopping from home (Hungary)

49% - save time37% - less expensive

Future shoppings will increase by 1,3 times

Source: GKIeNet., Hungary 2009Source: Gemius, Hungary 2009

� Reasons for shopping from abroad (EU vs Hungary)

55%

64%less expensive abroad

domestic not available

� Convenience and lower price is the main reason for online shopping� 35% see home delivery as important reason to shop online

2%

1%

2%

13%

16%higher product quality

no large product portfolio

no reason

easier to order

not know

Source: Websurvey France, 2008Source: GKIeNet., Hungary 2009

� Case study – cross border e-commerce

FROM ABROAD TO CEE VIA BUDAPEST

.

� Classical mail order company assisted by Magyar Pos ta

The business model� Germany based mail order company is entering on the

Romanian market with the purpose of selling goods

The services offered� Local distribution of unaddressed items (flyers)� Local distribution of addressed items (catalogues a nd DM)� Local distribution of parcel with COD � Local distribution of parcel with COD � Cash collection + bank transfer of collected cash� Return logistics management (RLM)� Postal payment services linked to the returns

The contractual parties� Mail order company and Magyar Posta

� Conditions of the business model

� Sales channels used by the distance seller � Flyers, DM and Catalogues incl. order forms� Call center (telephone order)� Home page

� Bank account opened at a local bank

� Return management� Normal returns are managed by the subcontractor / distribuitor� Reverse Logistics Management (RLM) by the local postal operator (DO) � Payment of the returned goods is managed by the DO

� PO Boxes � Letter mail items� RLM

� The procedure

Distance Seller

ReceivingPost

Deliveringoperator

End Customer

xml file

� Managing the physical and digital flows

xml fileTransferreport

Explanation:->24-48 h before delivery distance seller

is sending a pre-advice (xml-file)->Magyar Posta is processing xml-file->Magyar Posta is over-labeling the items

Main features of the process:-cash collection done by the subcontractor-collected cash transferred on the domestic

bank account opened by the distance seller at local bank

- Transfer report sent to distance seller

� The xml-file

� The content of the xml-file may vary from case-to-c ase <sorszam> 1<azonosito> CU1005NI0033508152510008990<alapszolg> A_173_EKP<iranyitoszam> 525100 | Covasna<suly> 370<tobb_kuld> 1<kulonszolgok> K_UVT,K_ORZ<uv_osszeg> 89.90<eny_osszeg> 0<kezelesi_mod> 2<alapdij> 9.45<tobbletdij> 0.50<címzett> MARIA-GYOPARKA BENKO<cimzett_hely> Baraolt<cimzett_ertcsat> 0745163465

<cimzett_ertcim> bgyoparka@yahoo.com<orz_ido> 5<díj> 9.95<kozelebbi_cim> KOSSUTH LAJOS | 249 | BL / ANL AP / 2<megjegyzes><ugyfadat1> 56201419<ugyfadat2> 2187754

� Before the handover at Budapest OE of the parcel (s hipment) the electronic xml-file is sent (48 hours)

� Based on the xml-file the parcel are over-labeled� The xml-file contains all the necessary details inc l. COD amount

� Critical problems encountered

� No reliable local databases => GIS (geomarketing sol utions)� Wrong / incorrect addresses => correct addressing

Insufficient data collection on the home -page => corrections

Main Reasons on Return Parcels Total

Wrong address 570

consignee not responding after being notified three times 547

refused by consignee 4748

Total 5865

� Insufficient data collection on the home -page => corrections � Customer habits: ordering on-line (not from catalog ues)� Uncert customers ordering products with COD = no res ponses

about their orders� Too long processing time from the order to the deli very causes

refuses at delivery

� Next steps

Improving the digital process (database, tracking, reporting)

� Magyar Posta = sending e-mail messages to the recip ients tracking the events -> leaving the warehouse; leaving Budape st HUB; entering into Romanian HUB

� Subcontractor = sending SMS to the recipients for h igher � Subcontractor = sending SMS to the recipients for h igher distribution rates

� FTP-server server based automatic (2x daily) trackin g communication

� Database procedure based on html surface instead of e-mail

� Communication is not a letter mail anymore

� „E-shopping” is different type of postal business

� Cooperation and alliances for reliable „e-shopping” services-> developing cross border solutions

� Conclusions

-> targeting the buyers

� „Last mile” delivery staff can be „first mile”sales force by identifying the „e-customers”

� Be prepared -> future is here !

� Alternative future of communication ?

� Thank you for your kind attention !

Please feel free to contact us ����

e-mail: sales.international@posta.hue-mail: sales.international@posta.hu