China: E-commerce goes postal

E-commerce is breathing new life into postal services, by AARON CHAN

When e-commerce started revolutionising the way we shop, fulfilment was very much integrators’ terrain. They provided global coverage, local final mile delivery expertise and track and trace that consumers, anxiously awaiting their goods, valued. Among the parties left at the gatepost were post offices, whose systems were no match for the demands and volumes of e-commerce consignments.

Move forward a decade or so, and post offices are enjoying a renaissance in the second boom of e-commerce.

Morty Langslow is chairman of Linex Solutions, a Lenton Group company whose products include Linehaul, which is Cathay Pacific’s wholesale GSA for courier shipments. ‘Post is coming into its own again as the final delivery expert,’ she says. ‘It is the most connected platform and is used by e-tailers.’

And ‘e-tailers’ is an important word here. Whereas the first wave of e-commerce was about big online presences like Amazon, the second wave and increased volume is about peer-to-peer selling from sites like ebay and cottage online stores – many managed by online giants and their affiliates.

This has created two fulfilment markets: courier for high-value goods and business to business, and post for cheaper and less urgent goods that people buy online. After all, why pay more for delivery than purchase?

Southern China is one of the boom zones for this new growth, with Alibaba and its e-tail affiliates, such as Taobao. Mainly, the market has been outbound, but that too is changing, as Aaron Chan, manager cargo sales PRD and Hong Kong at Cathay Pacific explains: ‘China itself is a big market for e-commerce consumption, especially healthcare supplements and children’s products. Hong Kong is an ideal gateway to Southern China, the biggest outbound and inbound market. We have a dedicated section in the Cathay Pacific Cargo Terminal dedicated to serving its mail.’

Langslow adds: ‘Customs clearance for post is the most simple and, even as personal and wholesale e-commerce is blurring, postal shipments are treated as personal.’

Linehaul has relationships with post offices worldwide. It ships general cargo or courier items, uses its commercial customs clearance before processing them at hubs for the post system. In Hong Kong, shipments are trucked to a warehouse in Tuen Mun for processing on behalf of Hong Kong Post. They are then injected into China Post.

Langslow says: ‘This is a growing business. Our hybrid e-Express product is designed for packages of up to 10kg, which enter the origin warehouse as a courier shipments carried by Cathay Pacific and leave as post for final mile delivery.’

A first class return to business for post.