Sri Lanka Post looking to modernize? That could help local eCommerce

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Of the many countless government departments that exist in Sri Lanka, the Department of Posts (better known as Sri Lanka Post) is one of the oldest. Its origins can be traced back to 1798 – the Dutch colonial era. Over its long history, the postal service has had a few notable achievements. One of them being it was the first in Asia to use trains to deliver mail. Yet, while the organization itself has grown islandwide, the way it delivers mail has hardly changed in decades. But that might change soon. 

Recently, Lakshman Yapa Abeywardena – State Minister of Information and Communication Technology, made 2 announcements at a press conference. The 1st announcement was that the government would work towards providing electric bicycles to postmen. Currently, much of the mail is delivered either on bicycles or foot. 

Sri Lanka Post | eCommerce
Lakshman Yapa Abeywardena – State Minister of Information and Communication Technology (pictured) announced 2 initiatives towards modernizing the Sri Lankan postal service (Image credits: BOI Sri Lanka)

To change this, postmen would be provided with low-interest loans and tax concessions to purchase electric bicycles. Additionally, charging points would also be established at post offices and sub-post offices islandwide. The goal of these measures the Minister shared was to not only enhance the postal service but also make it more environmentally friendly. 

The minister’s 2nd announcement was that the postal service will be launching an app for package deliveries. This would be done in partnership with SLT as per the President’s vision of more efficient public institutions. Through the app, you can have a postman come to you and collect your package or you can visit the post office to hand it over. Both you and the recipient will get updates via text message. Interestingly, the minister added that this app can also be utilized for packages you order through eBay, Alibaba and Amazon. 

The promise of Sri Lanka Post adopting technology

It’s no secret that globally eCommerce is a growing industry. According to Shopify, the eCommerce industry is projected to, “nearly double by 2023 to more than $6.5 billion.” Having identified this growth, postal services across the world have developed solutions catered to the eCommerce industry. 

Sri Lanka Post | eCommerce
The growth of eCommerce is reshaping postal services across the world (Image credits: Strait Times)

In the US, the United States Postal Service (USPS) has dedicated shipping solutions for businesses both large and small. These include desktop software to manage shipping, a service to manage package returns and even a web API that eCommerce companies can use to get real-time data on shipping costs, real-time tracking, etc. Singapore Post takes things even further with a suite of eCommerce solutions that cover technology, warehousing, operations management, and even customer support. 

The challenges of local eCommerce logistics

The importance of logistics in eCommerce cannot be understated. Yet, this is one of the biggest challenges faced by many local companies. Thamara Kandabada- cofounder of Bear Appeal, gave a first-hand account of this in a LinkedIn post. He stated, “reliable companies that provide B2C logistics services are exceedingly rare.”

Sri Lanka Post | eCommerce
Finding a reliable partner for logistics is easier said than done for local eCommerce companies (Image credits: Gotero)

Thamara went onto share how Bear Appeal partnered with a company that advertised itself as, “the #1 e-commerce delivery network in Sri Lanka.” In practice, orders went undelivered for weeks with calls and messages being ignored. At one point, a rider argued with a customer over accepting card payments upon delivery – despite their website saying otherwise. 

Describing the experience, Thamara shared, “One thing to note here is that the customer does not care at all about the fact that we have no control over the delivery company and the riders they employ. The customer deals with us, not our partners, however important they might be in the fulfilment process. In the customer’s eyes, we had screwed up. He didn’t want to come back.” 

The necessity of adopting technology

But while criticising third-party logistics companies, Thamara praised the services of Sri Lanka Post saying, “The service is low cost, and works pretty well; well enough that it allows us to ship to anywhere in the island within 5 days.” He went on to share that even today, Bear Appeal utilizes the postal service as a means of shipping their products to customers outside Colombo. 

Sri Lanka Post | eCommerce
While 3rd party logistics partners may not always be reliable, Thamara praised Sri Lanka Post as a low-cost reliable option for deliveries (Image credits: Daily News)

Taking this example, one can argue that we have a reliable postal service. Granted, it’s not infallible as everyone has stories of lost packages. Nevertheless, while reliable, like many government departments, Sri Lanka Post is low-tech operating on books and paper. Looking at the examples of SingPost and USPS, we can see there are opportunities by adopting technology to support eCommerce. 

Increasingly, it’s becoming necessary to seize them. Analysing the 2018 performance report of Sri Lanka post, we can see it’s annual revenue increased by 10.2% from LKR 6.9 billion to LKR 7.7 billion. However, the report also notes a decline in the quantity of physical mail. This trend has also been experienced by USPS and SingPost. 

Sri Lanka Post | eCommerce
Globally, volumes of physical mail are decreasing in several countries. Hence, many postal services are evolving to embrace eCommerce to sustain themselves (Image credits: Daniel Delaney)

In it’s latest annual report, SingPost reported a 4.1% increase in revenue by its Post and Parcel business due to the growth of eCommerce. Paul Coutts – Group CEO of SingPost added, “Amid the downward trend of traditional mail volumes, eCommerce volumes coming through the postal system continues to grow rapidly.”

Similarly, the USPS too reported an increase of $514 million in operating revenue. This growth is attributed to its Shipping and Packages business, despite a decline in overall mail volumes. 

Based on the above examples, one can further argue the need towards Sri Lanka Post adopting technology to support eCommerce. To that end, the plan for the adoption of electric bicycles and an app for package deliveries are positive steps forward.

Of course, it’s still only an announcement and it’d be premature to celebrate just yet. It’s difficult to forget that Sri Lanka has a murky record when it comes to e-government. If this administration wishes to do better, then it’d do better to learn from its predecessor’s failures

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