E-commerce shipping a great business opportunity for India Post

After Amazon, Flipkart and Snapdeal are planning to join hands with India Post for a one-day delivery system to areas where private courier services are yet to reach. So, is e-commerce shipping becoming a great business opportunity for India Post which has seen tremendous loss in this digital age?


What is in it for e-tailers is crystal clear to all. India Post being one of the best in the country enjoys a very high confidence of the consumers. So it will solve a really big problem for most of the companies who are not able to find a good solution to reach out to the smaller cities of the country.

India Post has been there in the business for more than 100 years now and they are present physically in more than 47 pincodes in the country. Indian e-commerce is shifting from Tier A cities to Tier B and Tier C cities and district places. Thirty percent queries are coming from Tier B and C cities. But e-commerce shipping is done through courier services or private delivery services now which are not available on all pincodes. So one can imagine the growth this industry will enjoy by such penetration.

“This year the economy is not good. There would not be much growth in e-commerce business this year. But with this penetration, the business is going to be boosted in double digit or triple digit mainly because new customers will be added,” said Nitin Lodha, e-commerce consultant, Chitrangana.com.

But let’s have a look at what is there for India Post.

“The basic services of India Post like delivering letters and parcels, money transfer are going down. So in most countries in the world the Government owned postal offices have converted themselves to full-fledged logistic companies. So this step will generate new revenue streams for India Post,” said Arvind Singhal, chairman of retail advisory firm Technopak.

The profit would be great compared to that of courier services though India Post will be competing in a market where specialist delivery firms like Ecom Express, Delhivery and Go Javas are raising venture funding to expand operations. The main reason is their infrastructure. India Post enjoys the privileges of the Indian Railways which would cut down heavily the transport cost as compared to courier services who deliver via road and through air.

There is more to it.

“It is going to be an additional revenue boost for the people. Employment by India Post would increase,” said Nitin.

But there is a slight hitch to all the merriment.

“The only problem is India Post’s poor mechanism of tracking lost parcels. If some parcel is missed, claiming that parcel and getting insurance for the product are going to be very difficult and expensive too,” he added.
(image credits: stechies.com)