Efficient postal networks critical to e-commerce success

24.03.2015 - New UNCTAD report includes home postal delivery as indicator in new global e-commerce index

A United Nations report says postal networks are critical elements of the e-commerce chain and includes home postal delivery as an indicator in a new global index to measure countries’ readiness to carry out business-to-consumer (B2C) e-commerce.

The United Nations Conference on Trade and Development’s report, Information Economy Report 2015: Unlocking the potential of e-commerce for developing countries, says the reach of the national postal network makes it a cost-effective method for connecting all citizens and businesses to the global e-commerce economy, especially for consumers and producers outside urban areas and in underserved communities.

For Bishar A. Hussein, director general of the Universal Postal Union (UPU), this report comes at a critical time, as postal services worldwide try to meet the e-commerce needs of consumers and businesses. The report, he says, underlines the need for Posts to get ready quickly for the growth of B2C e-commerce, which is expected to double from 1.2 billion USD in 2013 to 2.4 billion USD in 2018, according to the research firm e-Marketer.

“Posts are seeing the mail makeup changing, with more merchandises making their way through their networks,” says Hussein. “They must prepare for this growth by adapting their products and services, processes and infrastructure.”

The new UNCTAD index enables countries to compare their e-commerce capabilities with that of others. The index comprises 130 economies with all available indicators using data for 2013, or the latest year available. It will be updated annually.

Universal access important

Aside from home postal delivery, the index also includes credit-card usage, secure Internet servers and Internet use as key indicators. The report finds that rates of population covered by postal service and secure Internet servers are higher than individual access to the Internet and credit cards. But it also highlights significant inequalities in access to home delivery of mail. “While over half the countries cover more than 90 per cent of their population with home postal services, around a third provide coverage to less than half their population,” says the report.

While some online vendors are increasingly offering their own courier services, the report points out that these services need to be cost-effective to be accessible. “The proliferation of private, proprietary, closed-delivery networks, whilst initially providing a catalyst for e-commerce growth, also introduces limitations of scale for universal access, especially for underserved communities. This is where a national infrastructure, such as the postal network, is particularly important,” states the report.

The report also includes logistics, trade facilitation and universal address and postcode systems as key policy areas that should be considered in any national strategy to foster domestic and cross-border e-commerce. According to Hussein, Posts could certainly address several other challenges pointed out in the UNCTAD report, such as providing effective and secure payment solutions, trade facilitation support for micro, small and medium-size enterprises, logistics and easing access to online marketplaces.

The UPU has recently taken several steps to help Posts, e-tailers and customers prepare for global e-commerce by delivering a new programme to its membership complete with specifications for a new e-commerce parcel service and a merchandise-returns service. “This programme will foster the network’s global development and prepare it to support the growing e-commerce business,” says Hussein.

Between 2011 and 2014, global deliveries of small packets, parcels and packages by Posts worldwide increased by some 48% to achieve some 357 million items. In Asia and Oceania, where there are some reported 460 million online shoppers, the share of related exports rose from 25.5 to 32.9 per cent during the same period, while its share of imports rose to 23.9 from 15 per cent.

In industrialized countries, as well as in Latin America and the Caribbean, more than one third of a Post’s total revenues come from parcel post.

Fast growth

According to the UNCTAD report, the fastest B2C e-commerce growth by 2018 is expected in the Asia and Oceania region (market share to rise from 28 to 37 per cent), while the Middle East and Africa will see its share of the global market rise to 2.5 per cent from 2.2 per cent. The combined share of Western Europe and North America is expected to go down to 53 per cent from 61 per cent, it adds.

The report also points out that for most developing countries, enhancing payment methods and parcel delivery are important for improving e-commerce usage, especially when Internet penetration has reached a certain threshold.

According to the UNCTAD report, many Posts need to increase their efficiency and develop products and services that meet rising e-commerce needs.

The changing nature and role of postal services will be discussed extensively at the UPU’s upcoming World Strategy Conference in Geneva on 13-14 April 2015, where e-commerce, trade facilitation and social, financial and economic inclusion will feature prominently on the agenda.

Press release
 

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  1. Dirk at 19.01.2016
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