ByVinodh Gopal

OPERATIONS MANAGEMENT

SINGAPORE POSTTransforming Mail Services in the Internet Age

15.02.2015

HISTORY – POSTAL INDUSTRY

The Most Lucrative Business – Monopoly over delivering of mails

Advent of internet

HOW DID MOST LUCRATIVE INDUSTRY FAIL

Liberalisation of market to enable more private entry

Forced to form a new business model

SINGAPORE POST

History of more than 150 years, achieving full autonomy on 1967 after country’s

independence in 1965

Revenue from Delivery of traditional mails

STRENGHTS

Designated licensee for domestic & international postal services

Went public in 2003

Door Warehouse Distribution Door

Largest retail distribution networks, online shopping & shipping portal vPOST,

good infrastructure

INVESTMENT IN GREATER EFFICIENCIES

1974 – Culler-Facer-Canceller could process 30,000 mail items per hour

1983 – Optical character reading technology that allow 40% of mail to be sorted

mechanically

2011 – Multi-purpose machine to sort bulky envelopes & parcels

Lower Manpower Cost

Satisfactory performance till 2007, after which profits started flattening

Sing Post began feeling the impact as

profits started to decline by 3.2%

Acquisition of Regional Logistics

Company

Acquisition ofTechnology Company for

global postal & logistics

solutions

More Concentration on vPOST (Online shipping & Shopping)

Combined Effect of all the above changed revenue composition

Revenue from Traditional Mail

Services decrease from 80% to 64.8%

Revenue from Overseas increased from 0.3% to

11.2%

Current strategy not good enough for sustained future business – 2012 net profit dropped

RTF Program

Mail

Digital Services

E-Commerce

Logistics

Retail & Financial Services

Core business & most integral part but internationally declining service

Key customers - Government agencies, banks, other corporations

STRATEGY UNDERTAKEN

Better Cost Management & Efficiency gains

Expanding regional network as domestic market is saturated

Mail

Digital Services

20.8% Stake

Direct Marketing Content (Mailing promotions etc.)

Wide range of printing services (Statements, bills in color etc)

Advanced Mail processing (Enveloping, Inserting brochures / leaflets through machines)

Data Archiving & Retrieval (Conversion into digital data, storage, indexing and retrieval for businesses)

Data Entry & BPO Services which is growing in Asia

Retail & Financial Services

Service Automated Machines (SAM) – Integrated

Financial Service

Government bills

Credit card bills

Utility bills

Loans

Hospital, Travel bills, etc.

Pay fines

Top up

Donations

Remittance

Retail & Financial Services Singpost’s Retail Partners

Customers Shop

Singpost NetworkCustomers Take Delivery

@ any station they want

INNOVATION IN RETAIL SERVICE

LogisticsEstablished regional logistics provider with

network of offices in 10 countries within the Asia

Pacific region with services such as Shipping,

Warehousing & other value added services

Deliveries to every Singapore address in three standards Speedpost Express (Within 2 hours of booking confirmation)

Speedpost Priority (Within same working day or next working day)

Speedpost Standard (Within 1-2 working days)

E-Commerce

More than 100 e-commerce clients

E-Commerce

Succeeded in establishing new partnerships, M&A, new hires

Revenue from overseas increased to 15.4% as of July 2012

2014 – ANNUL REPORT

Revenue Breakdown Revenue

Geographic Distribution

Mail

Logistics

Retail

E-Commerce

Operating Profit

Breakdown

578.5

182.9

821.1

178.6

0

100

200

300

400

500

600

700

800

900

Revenue Operating Profit

2011/12

2013/14

In Million USD

Drop in operating profit because of diversified business model with lower

margins and increased expenses for resource development in these new areas

Strategy has worked in saving the company, for improving profits continuous

innovation & exploration shall be required