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ON 19th, 20th & 21st JANUARY 2016

Painful Reality Behind India Post COD Services

india-post-COD-deliveryThousands of products from e-commerce companies such as Amazon, Snapdeal, Flipkart, HomeShop18, Shopclues, Naptol and Yepme are reaching the remotest corners of India everyday, owing to their last-mile partnership with India Post, the government-operated postal network. On its part, India Post transacted business worth Rs 500 crore in cash-on-delivery alone for e-commerce players in 2014-15. Its revenue from this business rose from Rs 20 crore in 2012-13 to Rs 100 crore in 2013-14. But that’s just one side of the story.
To reach as many customers as possible at the fastest pace, even if it means getting drones to do the job, online retailers are learnt to be coping with the infrastructure hurdles of India Post. In fact, many leading companies are said to be directly in touch with Union minister of communications, Ravi Shankar Prasad, as well as senior bureaucrats in the ministry, to resolve last-mile issues.

While e-commerce companies tied up with India Post to reach India’s interiors and access pin codes that no courier company could, this has helped them only in a limited manner. On bicycles, India Post delivery men hardly match courier boys on motorbikes, who are faster and are also able to carry heavier parcels. Some postmen have to walk on rough terrains to reach distant addresses with parcels containing anything from mobile phones and apparel to fancy accessories and kitchenware.
A senior Snapdeal executive told, “As most of the India Post team uses bicycles, we have ensured products weighing less than five kg are routed through them for delivery.” Against that, a courier delivery boy often carries parcels 10 times the size, according to industry sources. An Amazon spokesperson said, “We appreciate and understand that the last-mile delivery methodology of India Post is mostly on bicycles and we are in discussions with India Post to come up with a solution/delivery methodology for large-sized Amazon packages.”
Flipkart did not respond to a questionnaire on the issue.
An official at India Post said the department was gearing up for the challenges and infrastructure was being upgraded. The department has already generated substantial revenue from its tie-up with e-commerce companies. While there’s no word yet on replacing bicycles with motorbikes and on whether the current India Post delivery staff, typically much older than those employed by private courier companies, are ready for the change, the official said logistics could be outsourced to a third party for delivery of goods, depending on volume.
Currently, the slow mode of sending parcels via India Post to pin codes unheard of is upsetting the sales targets of top e-commerce companies, for which every missed delivery could translate into a lower GMV (gross merchandise volume) and valuation. Also, it could mean missing the next round of funding from a marquee investor.
There are other issues, too. For instance, a Bengaluru-based online retailer-cum-stylist had partnered India Post in 2013. However, according to its co-founder, the two-year-old company had to discontinue the arrangement after it was found postmen were seeking money from customers for deliveries to remote areas such those in the Northeast. “Such incidents are serious enough to malign the reputation of a company,” he said.
Another challenge is the India Post delivery team doesn’t get any volume-based incentive because it’s a government organisation.
On the other hand, private courier companies were often enthused by such offers, an official said.
The fact that 70-80 per cent of orders for companies such as Flipkart and Snapdeal are from non-metro areas shows how critical it is for them to compete in the remotest parts of India. Amazon, for example, took pride in saying it had delivered a parcel to pin code 790002 — a destination called Balemu in Arunachal Pradesh’s West Kameng district.
The dark side of the e-commerce revolution is equally real. A recent Wall Street Journal report had highlighted the plight of courier boys carrying parcels weighing 23-46 kg in large backpacks day after day, all for a monthly salary of less than Rs 10,000. “This low-tech army of urban sherpas hauls bags of online purchases down narrow alleys and up flights of stairs, lugging everything from laser printers and kitchen appliances to cans of Coca-Cola for their country’s burgeoning consumer class,” the report had said.
Source: The Business Standard

Know about Rural ICT for GDS in India Post

Launch of the Rural ICT project of the Department by handing over the solar powered, biometric hand-held devices with connectivity along with the application software to Gramin Dak Sewaks from three pilot Circles viz Bihar, UP and Rajasthan on 28th Dec 2015

Benefits of Hand-held device to the rural citizen 

  1. Electronic transactions- Booking and delivery of Speed Post, registered mail, money orders, sale of stamps and postal stationery will be done through these devices and paper receipt shall be generated 
  2. instantaneously thereby eliminating chances of overcharging and other problems associated with manual transactions. Savings Bank deposits & withdrawals, PLI/RPLI premium deposits and loan/claim payments will also be done electronically on these devices. 
  3. Immediate uploading of transaction data and financial reconciliation- Using mobile connectivity, data pertaining to all transactions done on the hand-held devices shall be uploaded onto the central server. E-Money order will reach the destination post office instantaneously unlike present day where the money order is digitized at the nearest computerized Post Office and leads to delay in delivery. All financial transactions shall also be reconciled immediately without any manual intervention and Cash on Delivery amount collected in the village shall be immediately credited to the account of e-Commerce Company. Similarly the artisans would be able to fulfill e-commerce orders and receive immediate payment for their sold products online. This will have a positive impact on the overall economy of the villages. 
  4. Automatic track and trace- Speed Post and Registered letters/parcels and money remittances will be trackable at the Branch Post Office level and booking/delivery information will also be uploaded to central server immediately. 
  5. Fraud and leakage elimination- As Savings Bank and Postal Life Insurance transactions will be done on a real-time basis and through immediate generation of receipt and voice message, chances of fraud would be eliminated. Biometric authentication of MNREGS and social security beneficiaries at the time of pay-out would also reduce leakage in the schemes 
  6. Post Offices as Common Service Centres- Branch Post Offices shall be able to work as Common Service Centres and offer services such as Railway Reservation, online bill payment for electricity and water utilities, mobile and DTH recharge, insurance policy premium payments & transactions for partner banks/insurance companies/mutual funds etc

Achievements and Success of India Post

Average business provided by major players is as follows:
  • Amazon: ~3 Lakh articles per month (peak 6 Lakhs)
  • Snapdeal : 80000 articles per month
  • Myntra : 50000 articles per month
  • Flipkart : 30000 articles per month
  • Yepme : 60000 articles per month
  • Parcel Revenue : Rs. 92.35 Crores till Nov 2015
  • Speed Post revenue : Rs. 1023 Cr till Nov 2015 (~10% eCommerce business) 

Revenue Growth 

  • Speed Post revenue growth in the current FY is more than 16%. CAG report laid in Parliament on 8th May 2015 highlights that Speed Post is far better than private couriers, in terms of reach, assured delivery and delivery time. 
  • Department has tied-up with more than 400 e-commerce agencies including Flipkart, Snapdeal, Amazon, YepMe, Shopclues etc for delivering e-Commerce pre-paid as well as Cash on Delivery (CoD) orders. Amazon is the largest business partner in e-Commerce. Rs 1000 Crore COD collection by Department of Posts so far and this figure this likely to cross Rs 1500 Crores by the end of the current FY. 
  • Parcel revenue which registered 2% decline in 2013-14, registered 37% growth in 2014-15. 117% growth in parcel revenue till 31st October 2015 in the current FY. 

Digital India 

  • Core Banking Solution (CBS) rolled out in 12441 Post Offices along with 300 ATMs. CBS shall be rolled-out in all 25,000 Departmental POs along with 1000 ATMs by 31st March 2016. 
  • Core Insurance Solution (CIS) rolled out in 23,792 Post Offices and shall be rolled out in all 25,000 Departmental POs by 31st March 2016. 
  • Supply of solar powered, biometric hand-held devices with connectivity to about 20,000 rural Branch Post Offices shall be completed by 31st March 2016. All 130,000 rural post offices would be provided with hand-held devices by March 2017.