Australia Post is walking even further away from mail after posting a $222m loss for the 2015 financial year, and will instead look to Asia and an e-commerce-centric future for its salvation.
Despite saying its revenue was ‘stable’ at $6.37bn, the monopoly mail carrier turned last year’s $116.2m profit into its first full year loss in more than 30 years as the mail division lost $381m.
In a move that will no doubt irk printers across the country, Post is eying a parcel expansion into Asia, beginning with a joint venture to deliver Australian goods to China.
While its annual report will not be available until mid-October, Post says in a statement that addressed letter volumes fell 7.3 per cent, with ordinary stamped letters falling by 10.3 per cent.
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Despite its own research showing the effectiveness of direct mail and consumer preference for mail, chief executive Ahmed Fahour attributes the decline to Australians ‘switching to digital alternatives’.
"We continue to make headway with reforming our letters business and we are investing in the infrastructure and digital capabilities – vital to servicing the changing needs of our customers,” he says.
“We are confident we have the resources, infrastructure and support in place to manage the ongoing transition of our letters business as we become a more eCommerce-centric organisation.”
Post last week got Senate approval for its plan to introduce its two-speed delivery timetable and is waiting for ACCC approval increase the cost of a stamp to $1 and hike bulk mail prices by up to 48 per cent from January, with a decision due in December.
"We are grateful to the government and members of parliament for supporting our reform program as it passed the Senate last week, enabling us to get on with this critical transformation,” Fahour says.
Post will unsurprisingly focus on its parcel division, which rose 3.6 per cent to $3.21bn and now accounts for more than half of revenue.
Fahour tried to spin this is a positive, but it is really just because mail revenue is falling so fast. He also now says Post is now ‘a parcel company more than we are a letter company’.
To cover its losses, Post is planning to muscle in on Asia just as Japan Post has done here with its takeover of Toll. According to the Herald Sun, the first step is its joint venture with Chinese e-commerce giant Alibaba.
Australia Post provides translation, payment and logistics services for companies who sell products to Chinese consumers using Alibaba’s Tmall shopping platform.
Fahour says 30 Australian businesses have signed up since it was quietly launched last year.
“We are focused on growing our e-commerce business to everyone … we will not just focus on the domestic market but also particularly the Asian opportunities in front of us,” he told the newspaper.
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