Trends in the Postal and Courier Sub-Sector

By Richard Tonui

Competition, Tariffs and Market Analysis Communications Authority of Kenya

Introduction

Postal & Courier sector continue to be a critical actor in delivering solutions that foster inclusion in socio-economic developments for Many countries

Source: www.google.com

Introduction

In line with the United Nations Millennium Development Goals, the postal sector's financial, electronic and physical network can

make a significant contribution towards reducing poverty

Source: fpif.org

Disruption by ICT’s

Postal mail is facing major challenges from modern instant messaging media

among others

Source: www.gaminglawtech.com

Leveraging on ICT’s for Growth

The Internet, together with the Postal & Courier subsector can address new business opportunities

The new NEEDS are movement of goods/parcels from one person to another

The postal/courier operator can provide the vital link between the sellers and buyers

Many businesses are able to reach a wider market. The Bulk of business relies on COURIER!

The challenge is for the subsector to move out of traditional business to new frontiers

Opportunities in E-Commerce

The rise of e-commerce in many countries is leading to large increases in the volumes of parcels and small packages

With decline in letter-post ( mainly social letter) volumes

Growth opportunity lies with Parcel and small packages market afforded by emerging e-commerce

Postal &Courier/E-Commerce in Kenya

• Kenya just attained middle income status

• Middle Income population is increasing

• Internet penetration (64.3%) is growing, especially using mobile phones.

• The demand for goods and services is increasing

Source: en.wikipedia.com

E-Commerce in Kenya…Cont

Despite having enabling factors E.g.:

relatively good Internet connectivity compared to most countries in sub-Saharan Africa ;

very high take-up of mobile payment services;

rapid growth in the number of electronic payment cards in services.

E-commerce in Kenya is relatively low by international standards;

The e-commerce sector in Kenya was estimated to be worth around USD50 million in 2012, or around USD1.20 per head of population;

In comparison, the e-commerce sectors in South Africa, Egypt and Morocco were worth USD624 million (USD12.20 per head), USD200 million (USD2.50 per head) and USD110 million (USD3.40 per head) respectively in 2012

E-Commerce Leveraging on ICT’s

Trade and services is a growth area, with opportunities for home deliveries picking up in cities and across the borders.

Businesses are concentrated in cities

Young population with appetite for ICT Services

Source: www.lovekept.co.uk

Internet penetration, electronic payment and addressing systems, and increasing income expected to drive/facilitate e-commerce

Why the Low Uptake of E-Commerce in Kenya?

Inadequate reliable, low-cost delivery services for e-commerce items and, to a lesser extent, the inadequacy of services to enable consumers to return unwanted or defective items;

The lack of a national addressing system;

The high import duty and taxes on items from other countries (The total duty and tax paid for an incoming item amounts to almost 50% of the value of the item);

The lack of a cyber security system that allows merchants to verify the identity of their customers and manage potential fraudulent usage;

A lack of trust on the part of consumers on items ordered online.

Innovation & Partnerships for Growth

Supermarkets and restaurants on local deliveries. Schools and training institutions on deliveries of learning materials Creation of digital villages / Resource centers for local communities Government agencies Cooperative societies Bridging E-commerce divide for SME’s Logistics Solutions

Apart from Parcels, can the sector

explore providing solutions emerging

needs????

Recommendations

Need for collaboration among players in the supply chain;

Need for operators to be innovative;

Integration with efficient and secure payment and physical delivery systems;

Need for Supportive national and international regulatory environment;

Enhance Cyber security framework.

Conclusion

The postal & courier subsector will be a catalyst for economic growth if the business:

i. Is aligned to the emerging needs; and

ii. Leverages on emerging trends in ICT

Innovation and integration is critical.

Thank You!