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Parcel business Opportunities for

India post

Brainstorming

• What are the parcel products available in Indiapost and explain their features

• Trainer to consolidate the features

Parcel services offered by DoP

Ordinary Parcel Registered parcel VP Parcel

Unregistered Up to 4 KG Unaccountable Presented at

the counter only

Accountable Can be Insured Up to 20KG Tracking Facility

Sender collects the value of consignment from the addressee through post office

Ins Parcel Business Parcel Express Parcel

Accountable Tracking facility BOs up to Rs.600/- POs up to

Rs.100000/- In case of currency

notes Rs.20000/-

2KG to 35KG For corporate

customers Surface

transmission Credit facility Discount facility COD

0.5 KG to 20KG For corporate

customers 35KG For BOs 10KG Credit facility Discount Facility COD

Growth outlook for the Parcel industry in India

2011-12 2014-150

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

10870

17450

Revenue in crore

Revenue in crore

Source:- crisil survey report

Growth outlook for the Parcel industry in India

Parcel industry in India is expected to grow at a CAGR of about 17% over the next three years to Rs 17,450 crores (USD 3.5 billion) in 2014-15 from Rs 10,870 crores (USD 2.2 billion) in 2011-12.

The growth of the industry will be driven by the current major customer segments

auto components banking & finance Garments & pharmaceuticals IT hardware and mobile phones.

New segments like organized retail, e-commerce and others are expected to emerge as major customer segments in the medium term.

Source:- crisil survey report

Structure of the Parcel Industry in India

Fragmented with a large number of small and medium-sized players operating with local and regional networks.

Increasingly consolidating with the growth of a few large players who have nationwide reach.

Document shipments provide the largest volume while non-document shipments have higher share by value.

Domestic market contributes to a larger share compared to the international market.

Source:- crisil survey report

Shipment profile – share of documents & non-document

31%

69%

VOLUMENon-DocumentDocument

Source:- crisil survey report

Shipment profile – share of documents & non-document

Non document shipments account for a smaller share of the shipment profile by volume, but in value terms (revenue) it accounts for approximately 64% of the value.

Source:- crisil survey report

Distribution of Domestic Shipments

Source:- crisil survey report

Source:- crisil survey report

Business parcel

• It is a contractual service• Minimum weight 2Kg and maximum weight• 35Kg.• Surface transmission facility available• Door to door delivery available.

Business parcel

• Advance deposit facility and credit facility available.

• Cash on delivery facility available upto Rs. 50000/• insurance of Cash on Delivery articles shall not be

compulsory irrespective of amount of recovery from addressee;

• Corporate customers are given free pickup service

Business parcel

.• Insurance is optional• No redirection facility• Article can be booked in any office• Articles will be delivered at the doorstep

Business parcel

Weight Slab Upto 2 Kgs Every additional 1 Kg upto 5 Kgs.

Every additional 1Kg above 5 Kgs.

Distance Local Rs.45 Rs.12 Rs.14Within State Rs.80 Rs.20 Rs.22Neighbouring State Rs.100 Rs.25 Rs.28Other State Rs.115 Rs.30 Rs.32Between Metro and Sate Capital*

Rs.105 Rs.25 Rs.28

National capital Region-Delhi/ Ghaziabad/ Noida/ Greater Noida/ Faridabad

Rs.70 Rs.15 Rs.18

*provided it is not covered under within state or neighbouring state.

Express parcel

• This facility available for both retail and corporate customers.

• Minimum weight is 0.5 kg and maximum weight for retail 20kg and corporate 35kg.

• Free pickup facility is available• Door delivery available irrespective of weight

Express parcel

• Redirection facility not available• Can be returned to sender• COD facility available and limit 5000/ for retail

and 50000/ for corporate customer• Insurance is not compulsory irrespective of

value

Express parcel

• Article will be delivered in specified locations• For corporate customer postage payment

available through advance deposit credit facility and payment at the time of booking

Express parcel

Weight Slab Upto 500 grams Every additional 500 grams upto 5

Kilograms

Every additional 500 grams above 5

Kilograms

Distance Local Rs.30 Rs.8 Rs.10Within State Rs.50 Rs.14 Rs.16Neighbouring State Rs.60 Rs.18 Rs.20Other State Rs.80 Rs.20 Rs.22Between Metro and Sate Capital*

Rs.70 Rs.18 Rs.20

National capital Region-Delhi/ Ghaziabad/ Noida/ Greater Noida/ Faridabad

Rs.40 Rs.10 Rs.12

*Provided it is not covered under, within state or neighbouring State.

Parcel Industry

• Small parcels and Freight will be shipped through Courier services, Express parcel services and Truck services

• Customer expects value added features– Track and Trace– Express service– Storage– Packaging and labelling

Parcel services (Below 35 Kg) - Classification

• Segment I – Large service providers with pan india operations. Ex: Gati, Safexpress, TCI XPS, ARC etc.,

• Segment II – Regional travel & transport companies. Ex: KPN, VRL etc.,

• Segment III – Smaller travel and transport companies, limited to few cities

Revenue of Domestic parcel service providers

Tier Company Revenue in Rs. Crore Revenue in Rs. CroreFY 2011 (L) FY 2011

(U)FY 2011 (L) FY 2011

(U)

I

Safexpress 20 30 22 35Gati 40 70 45 80TCI XPS 20 30 22 35Others (Blue Dart, AFL, DTDC etc.,) 50 100 55 115

II

Patel Roadways 15 20 17 25ARC 30 40 35 45VRL Parcel Service 15 30 17 35Trackon Couriers 10 15 11 17ABT 10 20 11 25Tier II Others (KPN, Praveen, Various State road Transport Corporations

90 185 100 215

III

Central Parcel Service 2 5 2 5Rathi Meena Travels 2 4 2 5Prakash Parcel Services 1 3 1 3Anant Parcel Service 1 3 1 3Fast Parcel Services 1 3 1 3On Wheels Parcel Service 1 3 1 3Tamilnadu parcel service 2 5 2 5Flyking 3 5 3 4Tier III Others 310 415 330 450

India post 53.5 53.5 72 72 Indian Railways 150 250 165 280 Total 826.5 1289.5 915 1460

Competition scenario – Market Share 2011-12

18.2-19.55 -7.2

5.2-5.7

3.3-3.7

2.4-2.8

2.3-2.5

61.8-62.8

Value

Indian RailwaysIndia postGatiARCTCISafexpressOthers

Competition scenario – Market Share 2011-12

Volume

Pattern of parcels sent (EPP)

• In EPP Maximum number of customers sent parcels below 5 Kg.

• The business in parcels above 5 kg is to be tapped

Reason for Customer loyalty (EPP)

• More than 41% customers used EPP because of high reliability.

• To sustain reliability, parcels should be delivered within time norms, to be handled intact

E-Commerce- Opportunity

• 25 million online buyers in a year• Expected to increase to over 100 million

online buyers by 2020• Expected to grow at a 25 per cent

compounded average growth rate• This growth in the industry is to be captured

Source: Business Today

Industry Expectation

The key characteristic of express delivery services are door-to-door one-stop timeline-defined service with global reach along with shipment tracking.

The industry players also offer services like call centres/customer service numbers to resolve queries

on bookings and shipments web-based track and trace system.

The industry also provides customized services to suit the needs of its various customers.

Industry Expectation

These are premium services guaranteeing delivery by a certain stipulated time

This industry is more customer responsive . The slabs are designed such that better rates

are offered to more voluminous shipments. Department of Post ready to fulfill all the

Industry expectation through Express Parcel and Business Parcel and with dedicated employees.

What else is stopping you ?

.

Activity

• Trainees to list out companies/organisations involved in ecommerce business in their area, who can be a prospective customers of Indiapost

• Trainees to list out prospective business or express parcel customers in their area who are engaged in professions like, weaving, handicraft items manufacturing, homeo/ayurvedic medicine preparations etc.,

Marketing tips

• Our staff should have thorough knowledge of all products and services.

• Bring awareness of our new products like business and express parcel among the customer.

• Propagate business in the market through other office staff and ME.• Maximize both internal and external marketing.

Marketing tips

• Identify potential customers in the locality• Maintain their profile• Keep in touch with corporate customers• Identify the products suitable to each customer• Identify the current service provider• Inform new customers about our products• Educate them about the advantage we have with

competitors• When new services are introduced intimate them

Marketing tips

• Keep continuous liaison with the customers to ensure satisfactory after sales service

• Maintain good relationship with all customer• Identify the need of customer to build

confidence in the customer about service.• Self advertisement is more effective in

marketing• Inform the customer about value added

services

Marketing tips

• Be aware of limitations in services• False assurances will have adverse effect on

marketing• Knowledge of products and services of

competitors helps in identifying the need of customer.

• Get well acquainted with latest changes and developments in market

Marketing tips

• Maintain liaison with head of institutions and bulk mailers.

• Identify and tap the potential in the your area.• Be proactive in interacting with customers

Key factors

• Provide after sales service• Ensure that articles are not delayed or

damaged• Ensure delivery within prescribed norms• Ensure customer delight to increase customer

base

Group Activity

• Teams to prepare SWOT Analysis for following products and present

1. Express parcel2. Business parcel3. Speed post4. Parcel5. Insured post

Group Activity

• Based on SWOT, trainees to prepare a strategy to be adopted to bring in new bulk and retail customers to the product and prepare a list of potential customers based on their business profile for products like speed post, Express parcel, Business parcel etc.,

Thank You