1. E-commerce growth
transforming declining state of Indian Post to world’s leading E-Commerce delivery organization.
By......... Mr. Vaibhav Patil
Introduction
: INDIAN POSTAL SERVICE (Indian Post)
Indian
postal service is the most widely distributed postal system in the world. The
postal service is under the Department of Posts, which is part of the Ministry of
Communications and Information Technology of the Government of India. As of 31
March 2011, the Indian Postal Service had 154,866 post offices, of which
139,040 (89.78 percent) were in rural areas and 15,826 (10.22 percent) in urban
areas. It had 25,464 departmental Post Offices and 129,402 Extra-Departmental
Branch Post Offices. On average, a post office serves an area of 21.23 square
kms (8.20 sq mi) and a population of 7,114; It is true that 90% of India Post’s
post offices, nearly 140,000 of them, are located in rural India which are
barely serviced by private logistics providers who prefer to operate in urban
centers.
Online
Retail in India:-
The country's e-commerce segment is
expected to grow from the current $13 billion to $137 billion by 2020 says
Morgan Stanley. online retail is expected to see three-fold growth this year.
Objectives
of Research study:-
1) To study factors responsible for transforming Indian post into the
market leader in e-commerce deliveries
2) To study the growth of the Indian post in terms of its revenue through
E-commerce.
Advantages
for Indian Post:-
India Post,
the world’s largest postal system with 154,882 post offices staffed by 5,50,000
employees handling over six billion pieces of mail annually. India Post’s wide reach, its well-entrenched
network and a huge team of 150,000 postmen are proving to be reliable delivery
partners in a logistics-starved country. India Post’s zip code coverage of tier
3 and tier 4 locations is unmatched.
Future
Plans of Indian Post to get maximum profit from E-commerce:-
India Post
is exploring a separate entity under the department of posts in the next couple
of years for e-commerce. The department is working on transforming its
infrastructure from document handling to merchandise handling. The government
has approved an IT modernization project in the Department of Posts for the computerization
of all post and mail offices, administrative and other offices, establishment
of IT infrastructure and software development. The project includes supplying
rural ICT hardware and peripherals to branch post offices in rural areas,
developing of scalable, integrated and modular software covering all postal
operations and establishing an IT infrastructure; including data centers and
Wide Area Network (WAN)-based networking.
Infrastructure
to support E-commerce GROWTH:-
Goverment
is transforming India Post into big hub of e-commerce, delivery and digital and
banking services. With 27,500 Post Offices, mail offices and administrative
offices networked into a country-wide WAN making it the largest
single-organization WAN in the country. India Post will transform its
functioning by inducting computers, renovating post offices and acquiring
vehicles for transporting parcels. The department had asked the finance
ministry for a non-plan fund of Rs 1,000 crore in the upcoming budget. 25,000
departmental post offices (out of 25,464) have been computerized from 2006–2007
to 2011–2012. A plan (costing Rs.1877.2 crore) has been formulated to
computerize rural post offices. About 35 road routes for parcel transmission
will be operational in the next one year. Shifting to a road network will
ensure secure and speedy delivery. India Post is planning to buy 250 vehicles
by the end of this year and the existing fleet of 1,300 vehicles will also be
deployed for this purpose. 48 integrated
state-of-the-art parcel centres have been created for booking, processing and delivery
of e-Commerce parcels. Nine (9) more such Centres are being established in
2016. Indian post plans to invest Rs 300 crore in upgrading and setting up
automatic parcel centres apart from the two it has in Delhi and Kolkata. Indian
post is also setting up integrated
parcel centres at Mumbai, Chennai, Hyderabad and Benglore. Indian post has set
up e-Commerce Parcel Processing Centre at Parel in Central Mumbai Spread over
12,000 sq feet, the e-Commerce Parcel Processing Centre at Parel is fully
mechanized and computerized using conveyer belts, scanners, computers and
electronic weighing scales. It has also been provided with a dedicated
transport facility to dispatch parcel bags to Mumbai Airport. Currently, the
centre processes around 7,000 e-Commerce parcels per day and has an installed
capacity to handle 30,000 e-Commerce parcels in a day in three shifts. The
quick delivery of E-Commerce parcels is done through four dedicated mechanised
nodal delivery centres which cover 21 delivery post offices in Mumbai. Soon
remaining post offices in Mumbai would also be equipped with mechanized nodal
delivery system which will ensure that parcels could be delivered on Sundays as
well as holidays and customers can track their parcels in real time on Indian
Post website. India Post has set up dedicated E-commerce facility in Safdarganj
area, New Delhi. The facility has a capacity of handling 30,000 shipments per
day.
Problem
Statements:-
Private
logistics providers do not serve rural areas like Tier 3 & Tier 4 towns and
prefer to operate in urban areas. Now a days most of the orders placed on
online retail platform is from Tier 3 & Tier 4 cities. so E- commerce
companies are searching option to serve these customers. A lack of reliable
logistics infrastructure in rural India is proving a challenge for many online
retailers. Building infrastructure from scratch to serve vast geographies is
economically non-viable. Online retailers are taking help of Indian post in
this regard. Indian-Post needs to
enhance its last-mile delivery capabilities as well as its payment systems.
example Snapdeal gets 70 per cent of its orders from towns, which are not in
the top 10 list of cities in India.
Turnover
of Indian post with respect to E-commerce:-
Cash on
delivery from e-commerce is expected to touch Rs 1,000 crore by March 2016 from
Rs 500 crore a year ago. India Post is aiming for a revenue of Rs 200 crore by
2015-16 from e-commerce. The five-year target is Rs 5,000 crore.
Achievements
of Indian post in E-commerce business:-
Amazon was
the first e-commerce player to pilot deliveries with India Post for cash on
delivery back in 2013. A pilot project has been started in Mumbai and Bangalore
with Amazon for providing next-day assured delivery of Speed Post articles
through identified post offices. E-retailers like Amazon India uses Indian Post
as a delivery channel. Many companies tie-up with India’s National postal
facility including major players like Amazon, Snapdeal, Flipkart, E-bay,
Telebrand India, TVC network, Quick Services and Red Box.Indian post has
commercial agreement and tie-up with 46 ecommerce companies in Mumbai region, 7
in Pune and 6 in Goa. Ámazon services over 19,000 pin codes through 140,000
post offices across all 35 states and Union Territories in India. India Post
has tied up with more than 400 eCommerce agencies including Flipkart, Amazon
and Snapdealfor delivering eCommerce pre-paid as well as Cash-on-Delivery
orders. Amazon is the largest business partner of India Post’s eCommerce
division. The department is working on transforming its infrastructure from
document handling to merchandise handling. A pilot project has been started in
Mumbai and Bangalore with Amazon for providing next-day assured delivery of
Speed Post articles through identified post offices. 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. Of the 1.55 lakh
post offices in the country, around 24,000 district offices may be ready to
offer banking services in the next two years. The DoP is in process of setting
up 1,000 ATMs. there were over 26 crore operational small savings accounts in
post offices as on March 31, 2012, having deposits worth Rs.1.9 lakh crore.
The
revenue India Post got from delivering parcels of e-commerce companies through
the country
|
Revenue
|
E-Commerce
deliveries
|
Total
Revenue
|
|
2013-14
|
Rs. 80 Crore
|
10750
|
|
2014-15
|
Rs. 172 Crore
|
NA
|
|
2015-16
|
Rs. 200 Crore
|
NA
|
|
2020-21
|
Rs. 5000 Crore
(estmtd.)
|
NA
|
|
Average monthly consignments through India Post
|
||
|
E-commerce company
|
2015-16
|
2014-15
|
|
Amazon
|
3,00,000
|
50000
|
|
Snapdeal
|
80,000
|
30000
|
|
Yepme
|
60,000
|
40000
|
|
Myntra
|
50,000
|
35000
|
|
Flipkart
|
30,000
|
15000
|
|
Revenue of Indian
Post from parcels (Prepaid
& COD)
|
|
|
Year
|
Amount
|
|
2013-14
|
Rs. 100 crore
|
|
2014-15
|
Rs. 500 crore
|
|
2015-16.
|
Rs. 1500 crore
|
|
2020
|
Rs. 5000 Crore (Estimated. )
|
The
following table shows income generated by the postal department.
|
Year
|
Net expenditure ( in crore )
|
Revenue (in crore)
|
|
2010-11
|
3075.0
|
6962.3
|
|
2011-12
|
2075.3
|
7899.4
|
|
2012-13
|
4676.4
|
NA
|
Findings
and Conclusion:-
Online retailer wants to expand and receiving many
orders from tier 3 & tier 4 towns and rural areas. It is very difficult to
deliver products at these places. Private logistic companies do not have
services at these places. It is very costly and difficult to set up such
infrastructure in remote areas. However Indian post has such infrastructure
already in place. Most of Online retailers are sending products to remote
places with the help of Indian post. Indian post is also investing in
technology & infrastructure. Indian post has huge potential to generate
revenue through online retail deliveries. Indian Post is reliable partner of
many online E-retail companies due to its widest reach of all the parts of India.
Indian post is updating itself with building IT infrastructure and investing in
technology. Government of India is equally supporting It through providing financial
resources. Indian post also has to enhance its last-mile delivery capabilities
as well as its payment system with the help of advanced technology. India Post
is gradually transforming into a big hub of e-commerce, delivery and digital
and banking services.
BIBILIOGRAPHY:-
1)
http://www.indiapost.gov.in/
2)
http://www.indiapost.gov.in/Report/AnnualReport2014-2015English.pdf
3)
http://www.indiapost.gov.in/Report/Annual_Report_2013-2014.pdf
4)
http://www.hindustantimes.com/business/india-post-a-trustable-service-for-e-commerce-but-challenges-ahead/story-Y5mgF0xUpQe30Y70ui0yEM.html
5)
http://yourstory.com/2015/07/indian-post-ecommerce-mumbai/
6)
http://yourstory.com/2015/06/india-post-ecommerce/
Date-30-01-2016
