Speed Post

Speed Post

Time bound guaranteed delivery Letters, Documents & Parcels can be

sent Started in August 1986 POD Facility Weight Limit – Maximum 35 KGs Types

DomesticInternational

Speed Post

Free pick up facility Insurance facility BNPL Tracking Facility Monitoring of MIS Special discount for Bulk Mailers Compensation

For DomesticFor Delay - Speed post chargesFor loss/total theft/total damage – Double the speed post charges or Rs.1000 whichever is less

For internationalFor Delay - Speed post chargesFor loss/total theft/total damage – 30 SDR

Courier Industry Trend, FY 2005 to 2012 in India

source:IMRB survey

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-120

1000

2000

3000

4000

5000

6000

7000

2790

3232

3633

4079

4784

5629

6338

1939

22472498

2876

3189

3947

4444

306 355 454 471613 585 658

Transport,Storage & Communication

Transport,other Means

Railway

All Values in Billions source: IMRB survey Report

Growth in courier Sector, FY 2005 to 2012

In 2010-11, Transport, Storage and Communications continued to have the highest growth rate amongst services sub-sectors.

The growth is estimated to be ~14 % in 2011-12 and this sub-sector has a share of ~10.6% in real GDP.

The courier industry is a sub division of the transport sector.

Transport, Storage & Communication Sector at current prices has grown at a CAGR of 14.2% in the period between FY 2005 to FY 2012.

Indian Courier Industry

The Indian courier industry is highly fragmented with more than 500 companies operating currently in the market.

The major players are Blue Dart, The Professional Couriers, First Flight Couriers, India Post, AFL, DTDC, Overnite Express.

Share of Major Players in the Courier Industry, 2011-12

25%

20%

10%6%

5%4%

3%

27%

Blue Dart

India Post

First Flight

DTDC

Professional Couriers

AFL

Overnite Express

others

source: IMRB survey Report

Share of Major Players in the Courier Industry, 2011-12

It is estimated that the total courier industry in India is valued at around Rs. 4,950 Crores for 2011-12 and has grown by ~10% from 2010-11.

India Post’s Speed Post has a share in the range of 16.7 to 19.8% . This is an increase from the previous year (15.1% to 18.3%).

SEGMENTATION OF COURIER INDUSTRIES IN INDIA• High charges per consignment (> Rs. 100 per letter)• Focus on corporate segment, especially large companies.• Focus on value added services like tracking, delivery before noon

the next day, credit period etc.• Network presence mainly in metros and large cities.• Examples: Blue Dart, AFL (FedEx)

SEGMENT 1

• Medium charges per document. May vary between Rs. 15 to 70 per letter depending on destination.

• Focus on individuals as well as Small and Medium Enterprises.• Not as strong in value added services; delivery next day or in 2 days, basic

tracking, limited credit period etc.• Usually strong in one region of the country and presence in all major cities

in other regions.• Examples: Professional Couriers, First Flight, Ovenite Express etc.

SEGMENT 2

• Low charges per document. May vary between Rs. 10 to 50 per letter depending on destination.

• Focus on individuals and select loyal corporate customers.• Not good in providing value added services.• Usually strong in one city or state. In all other places, they would typically

tie-up with another service provider for delivery, acting mainly as a collection agency.

• Example: Fly King, Madhur Couriers, Shree Anjani, Skylark etc.

SEGMENT3

SEGMENTATION OF COURIER INDUSTRIES IN INDIA

Speed Post is in a unique position in the market and as such cannot clearly be classified in a particular category. The reasons are: In 2011, the charges were very competitive compared

to Segment II players and even Segment III players in many cases. With the current tariff revision, Speed Post would be competing with tier II players in terms of price.

Speed Post has focus on individual segment like Tier II and III players.

Speed Post also has a corporate base especially in public sector organizations. Typically Tier II and III players are not strong in B2B segment

SEGMENTATION OF COURIER INDUSTRIES IN INDIA

Speed Post has a nationwide setup unlike Tier II and III players who are typically strong in 1 or 2 regions only.

Speed Post offers value added services like tracking which are offered only by Tier I and the leading Tier II players only.

Speed Post, Domestic Market

0

200

400

600

800

1000

1200

1400

1000

220

450

250

25

175

749

1300

190

525

330 330

170

890

FY 2011FY 2012

REVE

NU

E IN

CRO

RES

TIER 1 TIER 2

PLAYERS IN THE INDUSTRY

In the case of Tier one players, Blue Dart has grown rapidly. The other tier one players have also grown in the past year.

The major players in Tier-II have grown significantly in the past year. This is the main reason for Tier II share increase.

The share of India Post has increased and is in the region of 16 to 19% (15.1% to 18.3% in previous year).

Why focus on speed post business ?

Speed Post Revenue

2008-09 2009-10 2010-11 2011-12 2012-13 2013-140

200

400

600

800

1000

1200

1400

515.3

614.0

748.8

889.6

1261.51372.0

REVE

NU

E IN

CRO

RES

Why focus on speed post business ?

Standardized processes at Speed Post operations have led to streamlined operations, better monitoring and enhanced productivity.

Speed Post is contributing 12.5% revenue for our department total revenue.

Speed post business is growing between 18% to 20% every year.

One of the Trusted service.

Why focus on speed post business ?Customer Ratings on image of SP source:IMRB survey

1 2 3 4 5 6 7 8 9 100

10

20

30

40

50

60

70

80

90

100

87 84

7579 82 81 83 80

76 7883 81

6874 77 79 81

7571 7373 73

51

7466

74 74

6560 62

71

62

INDIVIDUALTOTALCORPORATE

MONTH

MARKS

Why focus on speed post business ?Trend setter

Speed Post is a leader in the market. It has the fastest delivery. Offers the services at an economical/

competitive price. Excellent facilities like Track/Trace, and

Insurance Reliable service for sending valuable goods Offers a competitive discount structure.

Why focus on speed post business ?IMPACT ON CUSTOMER LOYALTY-INDIVIDUALS source:IMRB survey

DELIVERY PROCESS 32%

POST OFFICE 23%

POST OFFICE STAFF 22%

BOOKING PROCESS 21%

PACKING 2%

TOTAL 100%OBSERVATION We need to improve our booking process and queue

management. We need to improve our customer service level up to

the customer’s expectations. We need to give more importance for speed post

delivery efficiency. All these factors will accelerate the growth rate of speed post

business in the coming years.

Why focus on speed post business ? IMPACT ON CUSTOMER LOYALTY-CORPORATE source:IMRB survey

DELIVERY PROCESS 56%

POST OFFICE STAFF 41%

FACILITIES-BNPL & PICK UP 2%

BILLING/INVOICING 1%

TOTAL 100%

OBSERVATION We need to focus more on our ability to deliver speed

post articles as per our committed timelines. We need to focus on 100% updating of delivery status

of speed post articles in time. We need to adhere to the special instructions (if any)

for BNPL customers and must be quick in responding to the queries.

Go to market with this weapon

Your understanding of your marketplace. Your competitors, geographical

boundaries, Types of customers you sell to, existing

distribution channels, latest and most useful demographic data, any information on trends in your markets (both demographic and product-related)

Face threat with confidence

What trends in the marketplace favour you? Are the competitive trends working to your

benefit? Are the demographics of your market in your

favour or against you?

Grab the Opportunity

Extend or regain market for the existing products

Boost sales in a particular product, market or product range. Where will this business come from? Be specific.

Cross-sell (or bundle) one product with another.

Enter into long-term contracts with desirable clients.

Grab the Opportunity

Focus more on BNPL Customers. Target the untapped segment. Use available technology to reach the

end customer.

Speed post