Thursday, February 4, 2016

Pakistan Post to Revamp to Become a Logistics and Mobile Financial Company

In the last decade, Pakistan Post’s usage and value has declined steadily over time. With the rise of courier services like TCS, Leopards and new entrants like BlueEx and their synergy with the burgeoning e-commerce industry, it’s become an increasingly tough market. Smartphones, apps, emails and mobile financial services have done the remaining damage to take Pakistan Post to almost an obsolete stage.

To effectively compete, the Pakistan Post service is aiming to do a complete revamp to cope with changing dynamics.

A presentation for revamping the Pakistan Post was made to the Prime Minister last week and has been formally approved.

Pakistan Post Reform Agenda:

The three major points of action are as follows:

  • Launch of mobile money transfer
  • Launch of logistic company
  • Rebranding of Pakistan Post

Mobile Money Solution:
For the mobile money solution, a significant investment has been proposed for the existing 3200 post offices and roughly 9,000 agents. It includes hardware, software, training of postal human resource staff, advertisement of the new product and connectivity charges. Within 2 years and hopefully a 20% market share, Pakistan Post is looking to earn up to 5 billion rupees in revenue through the mobile money service.

The strategy pursued in this regard is that of partnership. For a slice of the revenue, Pakistan Post would be provided with an end to end solution that maintains market standards and is run by the partner.

The private partner would also help the Pakistan Post to rebrand money remittance solution by providing hardware, software, training and advertisement.

Pakistan Post Logistics Company:
The local e-commerce market is currently worth around 80-100 million dollars per year. Within the next few years, it’s expected to number in the billions. In contrast, the courier market is worth 30 billion rupees as per Pakistan Post’s estimates. As e-commerce blossoms, so will the courier market and it’s piece of the pie the company is targeting.

For this purpose, Pakistan Post is aiming to launch a fully owned logistics company in partnership with private sector partners for investment on revenue sharing basis. An investment of 800 million rupees will be made in the following areas:

  • GPS enabled trucking fleet
  • Warehouse
  • Distribution channels
  • Information technology
  • Brand recognition

Rebranding Pakistan Post:
A much needed do over of the Pakistan Post is also part of the reform agenda. It includes the development of the brand as a center of technology and convenience. A subsequent upgradation of facilities and appearances will follow along with preparation and adoption of medium and long term postal policies.

The whole process is sought to be carried out in a transparent manner. For this purpose, expressions of interest will be invited for all three projects through the PPRA site as well as national newspapers. With the new reform agenda, Pakistan Post is aiming to double its revenue to 900 million per annum in 2 financial years. A growth rate of 15% is being targeted in the succeeding three years.

The comprehensive and wide ranging reform plan just goes to show how fast the business situation in Pakistan is changing. Traditional services like postal services have been caught out with emerging e-commerce industry and new players in the market. With business as usual on a steady decline, a transformation was in order and it’s going to help revive Pakistan Post and make it more competitive.



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