Businesses & Financial News

E-commerce will boost Postal Corporation of Kenya’s fortunes

By Dan Kagwe

The adoption of e-commerce has the potential to drive intra-regional trade and attract benefits such as opening markets to isolated rural communities, servicing Africa’s fast-growing consumer market, and offer citizens access to new business opportunities.

Africa’s early innovation and adoption of mobile payments has paved the way for it to become a pacesetter in e-commerce, with the market estimated to double in size to an estimated $75 billion by 2025.

The Universal Postal Union-International Bureau posits that the future of the Postal Industry lies in the world of online shopping – seeing that the volume of online sales has increased. The new frontier for the postal services sector is e-commerce and logistics, especially during the Covid-19 pandemic era where customers are keen trade with minimal physical contact.

Despite having an unmatched network of more than 600 branches countrywide and a large fleet of delivery vehicles, as the Postal Corporation of Kenya (PCK), we have seen our revenues dip, as mail volumes tumbled and private parcel delivery companies eat into our market share.

In an era where agile private entities are leveraging on e-commerce, social media marketing informed by technology advancement such as big data and artificial intelligence, we have had our Damascus moment and we are now angling our operations for a piece of the e-commerce pie.

Though the mail business has been a long lasting golden goose for the postal services industry, we are cognizant that the decline of mail services is “irreversible.” According to the United Nations Conference on Trade and Development (UNCTAD), the rise of e-commerce has led to an impressive increase in the parcel segment volumes, often referred as a “tsunami of parcels”.

To buoy our fortunes in a digitalized economy where mail volumes have plummeted, we are now leveraging on the advent of digital globalization through modern technologies and strategic partnerships. Working closely with the Ministry of Information, Communications, Technology, Innovation & Youth Affairs, we are rapidly implementing our strategy to leverage on initiatives such as the National Payment Gateway, the National Addressing System and Kenya Transport and Logistics Network for e-commerce business growth.

Unlike in the past where our systems were manual and one could not tell what was happening across our networks, we now have an Enterprise Resource Planning (ERP) system, having automated our business processes from the back end to the front office. In line with the National ICT policy 2020 that seeks to provide an enabling environment for the roll out of e-commerce and digital economy, the National Government is expected to play a key role in the modernization of the Corporation’s ICT infrastructure.

We have re-engineered the organization to become a formidable partner that will facilitate e-commerce by being the intermediary between the country’s SMEs and foreign and local online retailers. Kenyans will also be able to shop online and Posta will deliver the purchased items to peoples’ doorsteps.

Leveraging on our vast network, we have now rolled out state of the art e-commerce hubs in Nairobi, Mombasa, Kisumu, and Nakuru. This follows Kenya’s selection by the Universal Postal Union (UPU) as one of the countries to roll out regional e-commerce hubs in East Africa. The National Logistics Hub, located in Industrial area, Nairobi has revolutionized Posta’s e-commerce to become a first-class clearing and forwarding system in the wider sub-Saharan region.

In November 2019, Posta collaborated with Safaricom PLC to launch Mpost, a mobile-based innovation that allows users’ to receive letters and parcels from the Post Office. Through the service, subscribers have been offered virtual post office boxes linked to their mobile phone numbers. MPost comes in handy to those who wish to buy and ship items from overseas merchants and use postal services for last mile delivery. Through MPost, we hope to leverage on over 40 million mobile users to deliver parcels and postal items while tracking them through the value chain.

This is one of the reasons behind the Government’s formation of National Addressing System (NAS) National Steering Committee to develop a National Addressing System Policy, National Addressing Bill and County Addressing Bill to be submitted to the National Assembly for deliberation and enactment in due course.

The Government has also established Kenya Transport and Logistics Network (KTLN), a new agency that is expected to lower the cost of doing business in the country, through the provision of cost-effective infrastructure for the ports, rail and pipeline seamlessly. We are keen on being part and parcel of KTLN, under this arrangement, the Post Office will be critical in provision of last mile delivery services to the country particularly in the development of E-commerce.

In light of the fact that we are keen on growing Africa, Europe and US commodity and digital market linkages, we have entered into partnerships with international consolidators who offer express, warehousing, trucking, logistics and customs clearance services. Our partnerships with e-commerce players such as KiliMall and Jumia have now enabled online shoppers to use the national network of over 600 post offices as collection points and order placement branches.

We are now in the process of acquiring a National Payment Gateway system that will be the pivot for all forms of public payments in Kenya. We have already fully developed Posta Pesa, a mobile-money innovation that will make Posta the go-to payment gateway due to its many points of sale solutions. This new innovation is set to be rolled out to the mass market on or before June 31.

The public and private sectors are increasingly adopting e-commerce platforms; Governments deliver services through them while electronic marketplaces aggregate consumer and producer demand. Once the National Addressing System is fully developed, the Government will be able to generate dynamic data on the country and its population leading to the growth of e-commerce and national development.

The Corporation is gradually transforming into a paperless and cashless modern Agency capable of handling any Logistical and Payment solutions considering its vast network countrywide. Posta Kenya is now seeking to be the preferred Government logistics and payment services provider of choice.

The author is the CEO and Postmaster General of Postal Corporation of Kenya

 

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