Post Office eyes e-commerce for its future survival

South African Post Office. (Duncan Alfreds, Fin24)
South African Post Office. (Duncan Alfreds, Fin24)

Johannesburg - The cash-strapped South African Post Office (Sapo) believes its future survival lies in disrupting itself through e-commerce and turning the country into an international postal network hub.

On Monday, telecommunications and postal services director-general, Robert Nkuna, hosted Bishar Hussein who is the director-general of the Universal Postal Union (UPU).

The pair discussed how the embattled local postal industry could be modernised and benefit from e-commerce.

READ: Can the Post Office be saved?

Hussein said one of the envisaged outcomes of his visit was to implement a postal network hub for Southern Africa in South Africa, following the approval of UPU strategy that focusses on e-commerce, financial inclusion and postal reform

Hussein said they identified countries that have good telecommunications infrastructure as well as sea and air entry points.

He said South Africa was chosen as a starting country in the region and other countries are welcome to set up their own hubs.

Sapo chief executive, Mark Barnes, said the Post Office is already seeing an increase on its international mail business with volumes being 20% up compared with last year.

He said that Sapo was an ideal partner for e-commerce because it has the largest infrastructure, the largest database and clients.

READ: Post Office closes 221 outlets amid R1.1bn loss

Nkuna said the meeting was aimed at ensuring that the country emerges with a clear road-map of how it will work with the UPU to extract the most value from the increasing global trade that is driven by e-commerce activity.

“The postal services sector is very important in the successful implementation of the National Integrated ICT Policy White Paper.”

“It is not a stand-alone policy. It is part of the comprehensive policy overhaul to modernise the Information and Communication Technologies (ICT) sector for the inclusion of all citizens.”

“We are aligned to what the UPU is doing and have referred to it in finalising the White Paper,” Nkuna said.

Meanwhile, Hussein said that Africa has the potential to boost its e-commerce stakes.

“Africa is not well represented in the current global e-commerce map. The continent has one billion people who are mostly young and tech savvy.”

“They represent an exciting market. Global postal hubs are an idea whose time has come, only if they get off the ground,” said Hussein.

Hussein said the UPU postal strategy was presented and accepted by all the seven regions of the UPU and now the focus was on finalising delivery mechanisms.

SA Post Office (SAPO) Chairperson Dr Simo Lushaba said the UPU proposal was aligned to the turn-around of the post office.

“The proposal gives us mechanisms to implement our turn-around. It also enables small and medium companies to be global players,” said Dr Lushaba.

READ: SA Post Office launches app that tracks parcels

Sapo recorded a R1.1bn final loss for the year ended March 31 2016 with 221 post offices around the country closed.

The state-owned company saw 9% drop in revenues from R5.12bn to R4.68bn.

Results for the 2015/16 period mark yet more losses for Sapo as the state-owned company recorded a R1.4bn loss for the previous financial year.

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