The Indian postal department is jumping on the ecommerce bandwagon. This report in ET Retail says that the centuries old postal department is looking at tying up with Indian ecommerce sites. The postal department is already associated with players like Amazon for its logistics requirements.
The report quotes the chief postmaster general of Maharashtra circle, who says that the ecommerce industry is a big business opportunity for India Post, and it will handle the crucial task of delivering in remote areas. With this, the revenue collection of the postal department will hit the roof. The ecommerce industry is growing phenomenally, and the logistics sector is trying hard to keep up with it. Particularly in the Tier 2 and Tier 3 cities, there is great scope for the postal department, as courier facilities are limited. According to the report, tying up with ecommerce companies will pump up the postal department’s revenue Rs. 900 to Rs. 1,000 crores in FY16.
The growth of logistics
As an important driver (pun intended) of the ecommerce sector, logistics is steadily picking up pace. They are racing against time to keep up with the delivery commitments. The growth of the logistics sector is directly related to the growth of the ecommerce sector. While Flipkart has played it smart and safe by operating their own logistics (Ekart), others have associated with logistics companies. Everybody’s focus is now on the Tier 2, 3 and 4 cities, and rural areas, where much is left to be desired in terms of connectivity.
Investors are also seeing the opportunity, and are putting their money in logistics firms. Recently, US based Warbus Pincus invested in Ecom Express, and Tiger Global invested in Delhivery.
Other logistics companies like SSN, Pristine, TVS, Mahindra etc. are also getting support from investors.
Role of India Post
Perhaps the new wave of commerce will also help redefine the post and telegraph services, which is a part of ancient India. By involving the postal department in ecommerce, it might be possible to bridge the generation gap.
In the process of revival, the Indian ecommerce industry would probably benefit more considering the major advantage that the postal department brings with it, ie. storage facilities. As an established logistics giant with several years’ worth of experience, India Post has a chance to put up good competition. However, it will have to overcome the typical stereotypes associated with a government department. Indian online sellers should look at exploring this new (or old) logistics provider.
The ecommerce industry had approached the postal department as early as in 2014, for help with its logistics needs. Amazon, Snapdeal, and Shopclues have spoken with the postal department for their delivery needs. Last month, we heard about India Post’s ecommerce centre in Delhi. Is the ecommerce industry finally going to get the logistics support it needs?