New Post Office CEO Mark Barnes recently said that e-commerce should be a big revenue driver for the company in future.
This follows comments from Telecommunications and Postal Services Minister Siyabonga Cwele that getting e-commerce players to use the Post Office will be a key objective for Barnes.
The Post Office’s mail revenue, which makes up 60% of its income stream, is decreasing.
“When you talk about e-commerce, his vision is to do partnerships with major online shops like Amazon and Alibaba,” said Cwele.
The problem is that the Post Office has a reputation problem, and that its processes are not customer-centric.
Other problems include the Post Office’s cumbersome systems, theft, and a lack of door-to-door services.
MyBroadband asked some of South Africa’s largest e-commerce players what they think the Post Office should do to win the trust of online shoppers and companies in South Africa.
Parcelninja: To use the Post Office, it needs to have customer-centric and automated systems, and combat the theft of parcels
Parcelninja CEO Justin Drennan said they do not use the Post Office, partly because there is no easy way to make use of its services.
“In our experience the Post Office is not geared towards businesses, which leads to service delivery and quality-of-service problems,” he said.
Drennan said there is no clarity on whether the Post Office has the technology to support bulk sending and the accurate tracking of items.
“When we tried to work with the Post Office, there was limited automation and many manual processes. This will not work for any large e-commerce player,” he said.
Drennan said theft remains a big concern to shops and online shoppers in South Africa – an issue which the Post Office needs to address.
Takealot: We do not use the Post Office because they have not been able to meet the standards we require
Takealot founder and co-CEO Kim Reid said they place their customers at the centre of all their decision making.
“If we were approached by the Post Office to evaluate an opportunity, we would use the same methodology to evaluate if they were able to provide a service to our customers that meets our standards at an acceptable cost,” said Reid.
“At present, we do not make use of the Post Office as they have not been able to meet the standards we require.”
Raru: We do not use the Post Office because of delivery problems, poor reliability, and high prices
Raru founder Neil Smith said they do not use the Post Office, which was decided when they started the company.
Smith said they had a few reasons for this decision:
- The high rates the Post Office charges for Speed Services delivery with a tracking number, and the hefty annual increase in these rates.
- The service reliability factor – you never know when Post Office staff will be striking again for months at a time.
Smith said their current to-counter partner, Pargo, is more reasonably priced and offers far better services levels.
Loot: The Post Office needs to improve its parcel tracking capability, and have better rates
Loot CEO Gary Hadfield said they use the Post Office’s Speed Services for some parcels, which shoppers see as a convenient option.
For the Post Office to make inroads into the e-commerce space, Hadfield suggested the following changes:
- Dramatically improve parcel tracking capability.
- Rates are not competitive when compared to leading courier service operators.
- Be more flexible on the back end, like the ability to re-route a parcel based on a post-transaction customer request.
- Increase the convenience factor for both parties and make it cost effective for the online shop to consider pushing the Post Office as an option.
“The UK is an excellent example of where the Post Office still plays a significant and reliable role in the e-commerce ecosystem,” said Hadfield.