India Post to modernise for e-commerce push

Buoyed by the surge in e-commerce, India Post will transform its functioning by inducting computers, renovating post offices and acquiring vehicles for transporting parcels.

The department had asked the finance ministry for a non-plan fund of Rs 1,000 crore in the upcoming budget, an India Post official told Business Standard. "Seeing the huge growth in e-commerce orders, we plan to modernise post offices and replace old hardware," the official added.

E-commerce players like Amazon, Snapdeal, Flipkart and Naaptol have tie-ups with India Post for delivery of parcels, mainly to small towns and cities.

"About 35 road routes for parcel transmission will be operational in the next one year. Shifting to a road network will ensure secure and speedy delivery," the official said.

India Post is planning to buy 250 vehicles by the end of this year and the existing fleet of 1,300 vehicles will also be deployed for this purpose.

India Post's parcel revenue, which registered a 2 per cent decline in 2013-14, grew 37 per cent growth in 2014-15 and 107 per cent in the first quarter of 2015-16, year on year.

Cash on delivery from e-commerce is expected to touch Rs 1,000 crore by March 2016 from Rs 500 crore a year ago. India Post is aiming for a revenue of Rs 200 crore by 2015-16 from e-commerce. The five-year target is Rs 5,000 crore.

The department is working on transforming its infrastructure from document handling to merchandise handling, according to a presentation by the postal department to Prime Minister Narendra Modi.

The delivery channel of India Post is used primarily for small towns and cities. It has a network of 150,000 post offices and an employee base of 550,000.

India Post is, in fact, exploring a separate entity for e-commerce. It plans to invest Rs 300 crore in upgrading and setting up automatic parcel centres apart from the two it has in Delhi and Kolkata. It is also setting up integrated parcel centres at Mumbai, Chennai, Hyderabad and Bengaluru.