India Post posts profits on e-commerce boom

In August 2015, the Reserve Bank of India had granted in-principle approval to 11 applicants to set up payments banks, including India Post.

Written by Aanchal Magazine , Anil Sasi | New Delhi | Updated: January 11, 2016 11:09 am
India post, India post news, India post e commerce, India post digital, India post news, Ravi Shankar Prasad, India Post, Digital India, India Post profit, e-commerce, Amazon, Snapdeal, Flipkart, Myntra, Ravi Shankar Prasad, India postal service, RBi, Indian express India Post has set up 57 modern delivery centers to handle the e-commerce traffic, with a big centre at Parel, Mumbai.

For India Post, the boom in e-commerce deliveries is proving to be a big money spinner, especially the surging cash-on-delivery consignments of the country’s top online sellers — Amazon, Snapdeal and Flipkart-Myntra. The postal department’s revenues by ways of COD consignments from e-commerce majors have more than doubled in the first nine months of this fiscal at Rs 1,000 crore, up from Rs 500 crore during the whole of 2014-15, and just Rs 100 crore in 2013-14.

The deliveries are primarily directed at tier-II towns, and parts of the rural heartland, where India Post has unparalleled reach. The incremental e-commerce revenue boost, said Minister for Communications and Information Technology, Ravi Shankar Prasad, are at the heart of his plans to revive the fortunes of India’s postal service.

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Average monthly consignments from the department’s top six e-commerce customers is up over six-fold in the first nine months of this fiscal, primarily on account of a big surge in Amazon’s deliveries, which have sharply jumped to 3 lakh consignments until December 2015 from an average of 50,000 in 2014-15.

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Average numbers of consignments from Snapdeal had reached 80,000 until December 2015, as against 35,000 in 2014-15. Flipkart-Myntra have clocked average consignment numbers of about 80,000 so far this year.

“The new facet is cash-on-delivery. India Post has become the premium courier service for e-commerce, so that is a definite improvement. (India Post’s revenues from) cash-on-delivery is going to be Rs 1,500 crore by the end of this year (fiscal ending March, 2016),” Prasad told The Indian Express.

With 1.56 lakh post offices, 1.25 lakh of which are in rural areas, India Post is also seeing a sharp uptick in the parcel business, including the e-commerce business of Speed Post. Revenues have risen to over Rs 165 crore till November this fiscal, as against Rs 172 crore in 2014-15, and Rs 80 crore in 2013-14. “… There are local products such as Madhubani paintings of Bihar, so they (India Post) are also going big on these deliveries. They are getting good money for handicrafts and artisans. About 65 per cent of the catchment area is small towns for e-commerce,” Prasad said.

Over the last 24 months, India Post has entered into tie-ups with online retailers, introducing COD facility, and offering e-commerce companies credible last mile connectivity outside of large cities. India Post has set up 57 modern delivery centers to handle the e-commerce traffic, with a big centre at Parel, Mumbai.

Prasad said the other key aspect in the postal services’ turnaround plan is for India Post to enter into banking services with the launch of a payment bank that is likely to commence operations by March next year. It would be a “game changer”, Prasad said: “It will be a big platform for delivery of subsidies, third party delivery in banking.”

He said a total of 62 players had approached India Post for partnership for banking products. The domestic players include NABARD, HSBC, Allahabad Bank, Indian Overseas Bank, Kotak Life Insurance, HDFC, PNB Metlife, ICICI Lombard, ICICI Prudential, and Bajaj Allianz, while the international ones include Deutsche Bank, Barclays, Transport USA for renting solutions, Western Union, ClearSecurity and Japan’s Hitachi.

These companies have approached the postal department for partnering on banking products, banking solutions, consultancy, banking correspondents, physical security products, ATMs and digital payment services. “I have given them full permission to hire as many as possible so that good competition takes place,” Prasad said.

In August 2015, the Reserve Bank of India had granted in-principle approval to 11 applicants to set up payments banks, including India Post.

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  1. K
    Kris
    Jan 11, 2016 at 7:26 am
    The UPA government was run by mediocre ministers who never had any intention nor the capability to turnaround central government organizations like India Post (former PandT), AIR, Doordarshan; to name a few. It was mainly due to their misgovernance that several of the PSUs are loss making and are on the verge of closure. This move by India Posts is very good. Like all government departments, India Posts have a very distinct advantage of cross country presence covering the entire length and breadth of the country. In fact, Posts and Telegraphs services and Indian Railways are the best set up British had made in India during their rule. Ministers like Ravi Shankar Prasad are very honest and hard working. Congratulations to India Posts for this excellent turnaround and hope India Posts will give a run for their money to their compeors which sprouted recently on the inefficiency of IP.
    Reply
    1. B
      Balraj
      Jun 6, 2016 at 3:23 am
      How misleading is the headline of this blog; the headline suggests that the India Post has turned corners and has become profitable, which is in fact far from truth. Indian Express is a responsible paper and must not publish such misleading headlines.
      Reply
      1. M
        Mukesh Mukesh
        Jan 29, 2016 at 1:50 pm
        Let the government measure efficiency of the postal staff by tracking special letters and consignments to see if they get delivered or thrown in the nullah. Then skeletons will tumble out of the closet. Our ic postman has suo moto changed pin of my area from 560062 to 560108. My address verification mail from blogger(adsense) has not arrived twice. I am losing precious dollars something which i had toiled hard for. Minister will not do anything.
        Reply
        1. K
          Karunakaran
          Jan 11, 2016 at 1:26 am
          It is fairly evident the PDP has seen the terrible consequences as a result of partnership with BJP. The Central Government is entirely run by the PMO, and not by the parliament. The Parliament, where all matters should be discussed, hardly knows what is happening. Because, the crouching, dokhla-eating Gujjubhai, cannot speak. The crouching, dokhla-eating Gujjubhai, only knows how to do the drama-queen acting for the invited cheering supporters (mostly Gujjus), but he cannot speak. So the Central Government is run by the PMO, not by the Parliament. PDP has seen the result of Delhi elections, the result of Bihar elections, the result of Gujarat elections, and the result of even Madhya Pradesh elections. Most voters have deserted the BJP and the drama-queen, crouching, dokhla-eating Gujjubhai. So PDP's future can only be with the Congress party. Congress party is sincere. No false promises like those of the crouching, dokhla-eating Gujjubhai.
          Reply
          1. C
            chandru sharma
            Jan 13, 2016 at 3:27 am
            This is very nice to read.Today's central government doing well their job i think... congratulation Keep go ahead.... Thank you..! Chandru from Ecbilla - Leading ecommerce portal
            Reply
            1. R
              Raj
              Jan 11, 2016 at 7:22 am
              Parliament does NOT run the country - it is the Prime Minister and his Cabinet that runs the country. Why don't you read a basic 6th cl civics text book before commenting and understand the basic structure of our government - Executive, Legislative and Judicial - before posting foolish comments ? Ignorant people should keep their mouth shut - otherwise they only expose themselves like you.
              Reply
              1. N
                Narayan
                Jan 11, 2016 at 3:42 am
                A good move by India Post. They lost telephony as a spun off department, bank transfers killed money order, courier services took away the major chunk of big city packet deliveries, and then telegraph died. As the public communication medium shifted from paper, their base was lost. Their current strength is their presence in every nook and corner of India. They are where bank dread to go, and courier traffic is low. They should keep competing for the big city business too. It is easy for this segment with higher efficiency potential to be poached by others with better service.
                Reply
                1. T
                  Tomar
                  Jan 11, 2016 at 9:09 am
                  This is great news. The small towns are going to be the growth engines for the next couple of decades I think. Soon courier services will also reach these small towns. India post should also setup online banking services so people can make payments online instead of COD. Look forward to several years of growth in this segment. All the best.
                  Reply
                  1. M
                    madhusudan
                    Jan 11, 2016 at 3:33 am
                    Really Heartening India Post is evolving to a new avtar. All the best. Let it bring to mes a dependable service provider. We are a great nation which takes care of the ordinary citizen.
                    Reply
                    1. S
                      Siva
                      Jan 11, 2016 at 7:24 am
                      Hats of to the Postal Department. There is location called 'Nelang' in UP, way beyond Uttarkashi going on to Gangotri. It is about 40 odd kms short of the border with China. There is Post Office there catering to civil as well as the security forces. There is no road connectivity. All stuff travels on ponies or man pack. But the Post Office is a huge help to people though the volume is low. PO should not close down any of their units but find innovative ways to keep in touch with rural potion.
                      Reply
                      1. M
                        mjr
                        Jan 11, 2016 at 5:43 am
                        PAN Card issuing department does not believe in India Post, they do send the PAN cards by private courier. See the confidence in India Post.
                        Reply
                        1. S
                          Shatrunjay
                          Jan 11, 2016 at 1:11 am
                          Wonderful
                          Reply
                          1. V
                            Vns
                            Jan 11, 2016 at 3:05 am
                            Are you drunk ?
                            Reply
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