India Post best suited for e-commerce delivery services: govt

Communication and IT Minister Ravi Shankar Prasad today said India Post with the world's largest postal network is best suited to offer delivery services to e-commerce firms.

Prasad, who today met Probationers of the 2013 batch of the Indian Postal Service here, said there is a need to expose young officers to the latest developments and emerging trends in the postal and logistics sectors.

The Minister highlighted that the Digital India project, which aims to make broadband facility available in every village across the country, would drive up e-commerce business in villages.

With its unparalleled rural reach, India Post would be best suited to offer delivery services to e-commerce players, he added.

India Post has over 1.55 lakh post offices of which more than 1.39 lakh are in the rural areas. On an average, a post office serves an area of 21.21 sq. Km and a population of 7,175 people.

According to market analysts, last-mile delivery of products ordered by online shoppers will figure as one of the major deciding factors for e-commerce firms like Flipkart, Snapdeal, Amazon, etc.

Firms are already offering one-day delivery and this will further intensify with firms investing hugely in logistics to ramp up their delivery system.

The opportunity in back-end logistics for online shopping segment is estimated to be about Rs 3,500-4,000 crore, a major part of which is last mile delivery.

According to a joint study by consultancy firm PwC and industry body Assocham, the size of the e-retail industry is poised to touch $10-20 billion by 2017-2020 and e-commerce firms are expected to spend up to $1.9 billion by 2017-2020 on infrastructure, logistics and warehousing.

Another report by consulting firm Technopak pegs the $2.3 billion e-tailing market to reach $32 billion by 2020.

Prasad said Post Office can also become a focal point for delivering not only government services but also e-services to the people as in e-service centres, apart from commercially remunerative services for corporate/private players including conducting market surveys, information dissemination, etc.