SINGAPORE: With demand for traditional mail on a steady decline, SingPost is shifting its focus to e-commerce and logistics.
Domestic letter volumes dropped to 260 million in 2022, down from roughly 490 million in 2015, due to the global coronavirus pandemic, said Li Yu, CEO of SingPost’s international business, in an interview with Singapore Business Review.
Mr Li explained that SingPost has strategically shifted its focus to logistics to remain adaptive to changing market dynamics and capitalise on emerging trends.
According to Singapore Business Review, for the fiscal year ending March 2024, logistics made up 69% of SingPost’s revenue, amounting to S$1.17 billion out of a total of S$1.69 billion.
Despite a drop in overall revenue from S$1.87 billion the previous year, largely due to lower sea freight revenue, the company’s net profit more than doubled to S$81.5 million.
Mr Li stated that by focusing on the growth of the e-commerce logistics sector, SingPost aims to establish market leadership and enhance long-term shareholder value. “Our transformation will position us well to scale our logistics ambitions and deliver sustainable growth,” he added.
According to Statista, SingPost’s global e-commerce market has experienced significant growth, reaching US$5.8 trillion in 2023, up from US$3.4 trillion in 2019, with projections suggesting it could hit US$8 trillion by 2027.
Mr Li noted that the expansion is not just about value due to the large and growing opportunity. He explained that it reflects shifting consumer behaviour. He said, “As more people buy diverse products online through various channels, supply chains have to adapt.”
As part of this strategy, SingPost has expanded its international presence through partnerships with global postal services. It has collaborated with Lithuania Post and Kazakhstan’s QazPost to extend its network into the Baltics and the Middle Corridor.
SingPost also acquired Border Express, Australia’s sixth-largest pallet and parcel distribution operator, to strengthen its presence in the Australian market. “Revenues generated overseas now contribute over 85% of our total revenue,” Mr Li said.
The company has enhanced its logistics capabilities by offering return management and customised delivery options. These services are becoming increasingly important for e-commerce.
Mr Li pointed out that an easy return policy is crucial for consumers and online sellers, as it can significantly impact purchasing decisions.
The company invested in various technologies, including optimisation algorithms, Internet of Things (IoT) tracking systems, and data analytics with generative artificial intelligence (genAI).
These technologies help streamline delivery routes and reduce errors. To minimise human error, the company also uses Document AI to convert handwritten data into structured formats.
SingPost is also focusing on employee development through its “Future of Work” initiative. The digital upskilling programme is designed to enhance employees’ skills and proficiency in their roles, supporting the company’s shift to a technology-driven logistics model.
SingPost has over 4,900 employees and operates in more than 220 global destinations, with offices in 14 markets worldwide. /TISG