Russia’s largest parcel terminal operator “PickPoint” has developed rapidly in the last twoyears after investing around €2.4 million in its first 120 terminals and has set itself the
ambitious goal of having some 2,400 ‘postamats’ in operation by the end of 2014.Launched in November 2010, PickPoint plans to more than triple its terminal network with 300 newterminals to be installed by the end of this year, Nadezhda Romanova, PickPoint General Director,told CEP-Research in an interview at Post-Expo in Brussels. A further 2,000 postamats are plannedfor 2013 and 2014, taking the total to over 2,400 by the end of 2014. With every terminal wortharound €20,000, the total investment would equal €48.4 million, including the €2.4 millioninitially invested.
These very ambitious plans are due to continuously growing demand that the company needs to keepup with. “Our parcel volumes are growing by 20-30% every month. Comparing this year’s growth with2011, we have multiplied our volumes by several times,” Romanova said. She declined to giveabsolute numbers for the company’s volumes or revenues.
“Our project is developing quite positively. We are currently represented in 49 Russian cities,mostly in central Russia but also in the remote regions of the country, like Magadan.” The company’s customer base has grown rapidly to some 3,000 clients, including 350 major players on the market.PickPoint is currently cooperating with over 400 internet shops across Russia.
More than 500,000 internet shoppers already use delivery through the PickPoint postamats whichare located in public places such as the city centre and shopping malls, retail chains, localsupermarkets and metro stations.
In terms of geographical coverage, PickPoint is currently targeting cities with a population ofat least 1 million citizens following Moscow and St. Petersburg where the first terminals have beeninstalled. In the near future, cities with a population between 100,000-800,000 will be added tothe network.
The concept of the company’s expansion focuses both on automated terminals and classical servicepoints, Romanova explained. “Our experience during the last two years has shown that the parcelterminals have the most growth potential. This is despite the fact that we have almost twice asmany service points as terminals right now with 190 and 120 respectively.”
“As for the service points, we are not planning to install any new ones as already two-thirds ofall parcel volumes are delivered to the machines, and only one third to the service points. Oneservice point hands out 3.5 times fewer parcels than a terminal.”
As one of the reasons for this development, she mentioned human interaction which is a hamperingfactor for customers since retrieving the parcel from the machine takes only a few seconds. Incontrast, picking up the parcel from a person at the counter will take at least 1-2 minutes.
Another advantage for customers using the machines is being independent as most of them operate24/7 so recipients can pick up their parcels any time paying by cash or via credit card. Incontrast, the service points have limited opening hours even if operating late in the evenings. “Convenience is very important, especially when it comes to e-commerce. For example, if I ordersomething via internet while sitting on the sofa at home and I can pick it up later on my way fromwork, this is added value.”
Romanova stressed the company needed to be quick in finding new locations for the terminalsgiven the rapid volume growth. “Rapid growth is certainly positive but we need to be fast ininstalling new postamats and expanding our capacity. Thereby, it is also a challenge to findavailable space for new installations. Commercial areas where the postamats are usually locatedhave also their limits. A fairly large terminal occupies 7-8 sqm in length which is quite alot.
“Therefore, we want to get new ideas at Post-Expo in terms of the terminal construction, so wecould extend the space in height which has no limits. Right now, the limit in height is determinedby the average height of a person. But new conveyor technology within the terminal would enable usto keep the parcels in lockers further up so the system gets the parcel down to the customers.There are a few models of this type presented here and it is an interesting alternative for us asit allows us to distribute more parcels on a smaller area.” She stressed that PickPoint isconsidering re-construction of its terminals once the reliability of the system has been tested andproved.
PickPoint is increasingly targeting recipients alongside senders. “We’ve noticed a positivetrend of private customers making repeat orders with delivery to one of the postamats. We areespecially interested in customers purchasing from different shops and choosing our machines as onesingle point of delivery. This is an indicator for us that they stick to our terminals rather thanto the internet shops only. Now, 20% of our customers are buying from different sources andshipping their orders to one single terminal of their convenience. These customers also follow ournews and receive our newsletter.”
Looking ahead, Romanova expects growth to continue at a similarly strong pace in the next fewyears. The aim is to cover the whole territory of Russia, including towns with a population of atleast 50,000 people which would equal around 4,000 regions. To establish a strong terminal network,Romanova estimates that about 6,000 machines are needed.
Currently, PickPoint has the widest terminal network in Russia but competition might catch up inthe long run, Romanova said. “Russian Post has started developing its own terminal network withLogibox, and InPost is operating 40 terminals in Moscow.”
Talking about SPSR, the founding company of PickPoint, Romanova said that the two companiescontinue cooperating with PickPoint using SPSR’s delivery services.”We have a common warehousebased on the same area, but with slightly different processes.” But she added that they remain twoindependent companies developing separately from each other.
While further expanding its network in Russia, PickPoint is also establishing itself in Ukrainewith the first five terminals already installed in Kiev this year and a further 60 to be added bythe end of 2012. “We have adapted the technology in Ukraine within six months and parcel deliveriesthrough the machines have already started. We expect strong growth,” she said.
PickPoint is also considering launching the parcel machines in Belarus next year.
