Australia Post focuses on e-commerce

Australia Post focuses on e-commerce

Some 70 per cent of parcel business is driven by online shopping

The internet might be blowing over Australia Post’s letter business but it is turning out to be the saviour of the parcel division, according to CEO, Ahmed Fahour.

Speaking at a CEDA event in Sydney, he told delegates that while Australia Post was moving five billion letters and parcels per year, there were 400 billion emails sent within Australia in 2010.

“Communications is exploding but unfortunately for us at Australia Post, we’ve gone from 100 per cent market share in written communication 10 years ago to one per cent today,” he said.

“The other 99 per cent of communication is now sent digitally either through a mobile device or computer.”

However, the company was experiencing a boom in its parcel business with an estimated 70 per cent of revenue generated by online shopping equalling more than $1 billion.

“Our parcel volumes were up 10.9 per cent in the past 12 months and there is no question that the boom in our parcel business is being driven by the internet and online shopping,” he said.

Its latest estimates are for a 12.5 per cent annual growth in parcel volumes over the next five years. According to Fahour, this was because the majority of e-commerce spending was coming from domestic Australian retailers such as Grays Online, rather than international websites.

To win its share of the parcel business, Fahour said it had adapted its stores to suit the busy lifestyle of Australians. In November, the company announced that it had extended its opening hours from 8:15 am to 5:30 pm at 300 outlets across the country on week days. In addition, 2400 outlets are now open on Saturdays.

In October, the company released its annual report for 2011 which showed its results were up 31 per cent to $332.2 million from $253 million in fiscal 2010.

However, its letters business made a loss of $90 million. Fahour said the company did not expect to make a profit in that division but it was trying to minimise losses.

The changes were part of Future Ready, an Australian Post program which began in April 2010. The program involves building digital capability and positioning the company as a major player in digital communication, e-commerce, mobile commerce and the delivery of trusted online services.

Also in October, Australia Post announced it had extended the operating hours of parcel pick-up points and would trial 24/7 accessible parcel lockers. Customers would receive email and SMS notifications when their parcel arrived.

In addition, the company launched an Australia Post smartphone application in December 2010, which, according to Fahour, had been the number one business app in the country based on download numbers.

“We’ve had 500,000 Australians download this app which tells customers where the nearest post office is, where the nearest street post box is and tracks parcels after the customer has entered their parcel tracking number,” he said.

The app also allows customers to pay bills online and calculates the cost of parcels based on weight and destination.

Follow Hamish Barwick on Twitter: @HamishBarwick

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Tags e-commerceaustralia postsmartphone appsAhmed Fahourparcels

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