December 10, 2012

India Post eyes e-commerce venture

New Delhi: The Department of Posts (India Post), plans to develop a business structure for selling postal and postal financial products online. It also plans to sell non-postal products, particularly village industries and small and medium enterprise products, online. Pegged at an initial cost of around R100 crore, India Post has kept the roll out of e-commerce services as one of the top priorities under the 12th Five Year Plan period.
India Post will also create an e-market place consisting of e-shops set up by suppliers chosen through a comprehensive selection process, involving quality testing. “Tie-ups with one or more e-commerce majors would be put in place, which would help India Post manage the portal on a day-to-day basis and to market the same,” a senior official said.
But this comes at a time when less than 1% of its own 155,000 post offices are connected to broadband internet.
Overall, only around 8% (12,604) of the 1.55 lakh post offices in India are computerised, while only around 6% (9,300) are connected to a dial-up internet. Also, the Indian postal department is staring at a revenue loss of around R6,000 crore while its gross expenditure has virtually doubled to around R14,000 crore in the last four years. In its submissions made to a parliamentary panel last year, India Post conceded ‘negligence’ on the part of its officials and termed ‘managerial failure’ for the sharp shortfall in the revenues realised from the sale of postage stamps in the country.
However, in a recent proposal sent to the Planning Commission for the 12th Five Year Plan period (2012-2017), the department said that with its network of 1.5 lakhs post offices and proven capabilities in mail and financial services, it is ideally poised to establish a strong presence in the e-commerce sector in India.
“A pilot project was launched in March, 2011 under the brand ePost Office. This project will provide valuable learning in the operational, financial and management aspects of e-Commerce,” India Post said.
It also said that the India Post will also develop its full-fledged e-commerce IT platform under the technology transformation project.
In the first phase, India Post will make available its the entire range of postal products to customers online. This will include mail, express, parcel service, banking and insurance products, money order and cash on delivery. The postal department said it will create an adequate back office structure to manage the operations and accounting, and a front office structure for marketing and sales.
Source : The Financial Express, 10 Dec, 2012

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