At the World Mail Awards 2014 SingPost won the e-commerce category for its low cost e-commerce delivery model. Post & Parcel discovers how the model was developed and how it enables businesses such as Adidas and Toshiba to not only conduct business online in Asia but to expand in the region as well.
In 2013 SingPost developed an innovative way to enable businesses to enter the Asian market. “Under the threat of disintermediation and faced with an explosive growth in e-commerce globally SingPost had to reinvent its postal business,” explains Dr Wolfgang Baier, SingPost’s Group CEO. With the e-commerce logistics market in Asia Pacific expected to hit US$175 billion by 2016 the company decided to seize the opportunity and develop a new set of e-commerce models.
The B2B4C Monobrand solution serves large businesses and brands across Asia Pacific. The solution includes e-commerce web services, warehousing and fulfilment, last mile delivery and returns, as well as freight, customs and regulations management. This fully localised model results in easy and fast deployment for businesses and a transparent user experience for consumers.
Adidas was the first global brand to take advantage of this low-cost e-commerce solution by setting up shop.adidas.sg. Today SingPost is supporting about 600 clients from small start-ups to global brands including levis.com.au, shop.jrunway.com, shop.toshiba.com.sg and many more.
The main business aims to enable brands to enter the e-commerce market across the entire region. SingPost also offers a shipping service for consumers to forward purchases from international online retailers who do not ship to their home country via vPOST, as well as “Omigo”, a marketplace platform for small and medium sized enterprises (SMEs) to present their products and access the Asian market quickly and at low cost. “This three tier business model has revolutionised the e-commerce business in Asia,” says Dr Baier.
SingPost has enabled other postal organisations to use its vPOST technology and business model including New Zealand Post, Malaysia Post and several European posts. This has enabled them to generate the initial customer base of e-commerce shoppers in their respective countries. Likewise, SingPost has made its B2B4C Monobrand e-commerce platform and its Omigo marketplace available to other postal organisations.
In addition, through its vPOST experience with 600,000 customer base and regional customer care centres in Chennai, Philippines and Singapore, SingPost has enabled businesses to access the Asian market at low cost enabling them to scale up fast at the same time.
Dr Baier explains why companies often struggle to crack Asia in the past. “Asia is a very disparate market with different buying behaviours, fulfilment operations, data laws and payment systems which in general makes it difficult to seamlessly penetrate Asia. Fulfilment and payment are major challenges. Regional disparity in infrastructure also adds to the complexity of cross border trade.”
He adds that SingPost have the capacity to address both these issues: “Our strong branding, secure payment systems, e-fulfilment capability, local knowledge and regional presence in Asia have created a value preposition of trust and reliability for us to grow our e-commerce business,” he says.
Best of breed technology
In order to get new model up and running SingPost had to find the right people with skills to develop enterprise grade e-commerce solutions from scratch. It recruited an e-commerce team made up of experienced professionals and regional start-ups to keep the atmosphere both grounded and cutting edge.
SingPost purchased a core e-commerce platform that has been in development in Silicon Valley for over 10 years to ensure the scalability and robustness of the system. SingPost’s Senior Vice President for e-commerce Mr Marcelo Wesseler says one of the reasons they chose this platform is that the system has the ability to manage orders from multiple storefronts using open application interfaces. This enables SingPost to provide flexibility in managing complex orders, e.g. split-shipments, drop shipments from multiple suppliers, and seamless real-time status updates for the call centre and email systems.
Mr Wesseler explains that these enhancements translate directly into lower customer service costs and higher customer satisfaction. As an indication of the scalability of the system, the Adidas e-commerce website has experienced 99.9996% uptime since its launch. An example of the speed of the system is the processing time from order receipt to warehouse receipt is 15 seconds.
Gaining recognition and moving forward
Winning the award for e-commerce at the World Mail Awards was a great moment for the company and a well-deserved bit of recognition for the work of the employees. Dr Baier comments: “This award affirms our transformation strategy on e-commerce logistics and is a boost for Singapore as well.” He adds: “We have been working hard to establish a regional e-commerce logistics value chain, and we can only achieve that by working closely with our postal friends across the world.”
E-commerce is of course a huge and growing market and SingPost recognises that it needs to keep moving to remain at the top. Dr Baier comments on the company’s ambitions. “Our focus is to be an e-commerce enabler and provider for Asia businesses as well as US and Europe businesses. To bolster our position and take advantage of the e-commerce potential in Asia, we will continue to scale up our investments in e-commerce logistics infrastructure to serve regional needs. At the same time, we will also focus on helping local small medium enterprises grow their businesses in domestic market as well as expand into the region,” he adds.