Singapore Post has agreed to buy New Zealand Post’s Australian parcel delivery companyCouriersPlease for A$95 million (€64 million) to strengthen its regional e-commerce logistics
capabilities.SingPost said the acquisition, through its e-commerce logistics fulfilment business QuantiumSolutions, was in line with the group’s “vision to become a regional leader in e-commercelogistics”. Quantium Solutions is already an established regional e-commerce logistics providerwith domestic and regional operations in 12 countries within the Asia Pacific region, includingAustralian operations headquartered in Sydney.
The expanding Singapore-based group described CouriersPlease as one of Australia’s leadingmetropolitan small-parcel delivery businesses, with extensive national coverage and a low-costnetwork operating an asset-light franchisee model. Although its depots are located primarily inEastern and Southern Australia, SingPost said this allowed it to serve the majority of theAustralian delivery market and made it one of the few operators with national coverage.
The Australian firm’s network of 575 franchisees handled nearly 11 million consignments andgenerated revenue of more than A$100 million for the year ended 30 June 2014. New Zealand Post (NZPost) acquired full ownership of CouriersPlease in 2012 when it took over former joint-venturepartner DHL Express’s 50 per cent ownership of the business, as DHL Express made a decision to exitthe domestic express markets in Australia and New Zealand.
In addition to buying CouriersPlease, NZ Post also agreed at the same time to buy DHL’s 50per cent stake in Express Couriers Limited (ECL) in New Zealand in a total deal valued at NZ$108million. However, in July this year NZ Post announced its intention to sell CouriersPlease and saidit had engaged advisory firm 333 Capital to support the sale process.
Kok Peet Leong, regional director (Pacific) of Quantium Solutions International, commented: “ Australia is an advanced market for e-commerce and we see good growth potential as regionalemerging markets open up and further engage in e-commerce. With our end-to-end solutions, QuantiumSolutions aims to enable large overseas brands as well as small and medium-sized enterprises (SMEs)in Australia to participate in e-commerce in Asia Pacific.”
In addition to deploying CouriersPlease’s last-mile expertise, he said Quantium Solutionswould continue to work with postal peers and other strategic partners to tap the growing e-commercemarket in Australia and beyond. He said Asia Pacific currently accounted for nearly a third of allB2C e-commerce sales globally and was expected to lead growth in the share of worldwide spendonline, with a 16.7 per cent growth in 2016.
Australia has also seen B2C sales growing at a rapid pace. According to the Australian Bureauof Statistics, Australian consumers spent in excess of A$10 billion on online purchases infinancial year 2012, including at least A$6.23 billion on overseas purchases and A$ 4.55 billion ondomestic purchases. B2C e-commerce sales in Australia for 2016 are expected to grow to A$ 36.8billion, according to eMarketer.
Wolfgang Baier, CEO of SingPost Group, commented: “In line with our vision to be theregional leader in e-commerce logistics, we have been enhancing our capabilities in the areas offreight-forwarding, customs and regulatory management, warehousing and fulfillment, last-miledelivery and returns, and front-end web-solutions. As part of this strategy, the acquisition ofCouriersPlease, an established last mile service provider in Australia, will help to strengthen ourecommerce last mile capability to support our growing ecommerce logistics business in the region.”
He added: “SingPost will add significant value to CouriersPlease through our access tomarquee e-commerce customers, expertise in technology and automation, as well as innovations in ourapproach to last-mile delivery and products. I look forward to harnessing our combined capabilitiesin operations and technology to develop innovative solutions not only for our customers inAustralia but also in other markets.”
He said he expected to derive “good synergies” between the group and CouriersPlease,including implementing best practice from each party.
He claimed CouriersPlease would be able to immediately leverage SingPost Group’scapabilities in the regional e-commerce logistics value chain. With more than 1,000 e-commercecustomers in the ‘B2B4C’ segment, including global brands like adidas, Levis, Canon and Toshiba,the group has developed a network of 22 distribution and fulfilment centres world-wide and recentlystarted construction of a state-of-the art fully integrated ecommerce logistics hub in Singapore toserve regional customers, working with its postal peers as well as regional partners.
SingPost has placed international expansion and e-commerce fulfilment at the heart of its “transformation” strategy to diversify away from its traditional mail business. Its e-commerce andrelated businesses currently account for about 26 per cent of its total revenue, and the companyhas been developing its regional network and infrastructure in order to offer fully integratede-commerce logistics solutions covering freight transport, warehouse fulfilment, delivery andreturns, as well as web solutions to its customers.
In May, SingPost underlined its ambitions to become a regional leader in e-commercelogistics when it announced a strategic collaboration with e-commerce giant Alibaba Group, in whichAlibaba acquired a 10 per cent stake in Singapore Post and entered negotiations to establish aninternational e-commerce logistics joint venture that would focus initially on the Southeast Asiaregion.
SingPost said at the time that the investment by Alibaba Group would enable it tosignificantly scale up its regional capabilities and infrastructure to meet growing e-commercedemand. In a statement to the Singapore Stock Exchange, SingPost said that one-third of the netproceeds of the Proposed Issuance of approximately S$308 million, after deducting estimatedexpenses of around S$4.5 million, would be used for ‘SingPost Group’s business of e-commercelogistics, for purposes such as investments, mergers and acquisitions in Southeast Asia and theupgrade of the SingPost Group’s information technology systems relating to the e-commerce logisticsbusiness”. A further third would be used for “mergers and acquisitions and property developmentprojects which the SingPost Group may undertake”.
At the time, Baier said the funds from the Alibaba investment would provide SingPost withfinancial flexibility and enable it to “significantly scale up our e-commerce logistics businessand build new capabilities”, allowing SingPost to “be able to grow its regional e-commercelogistics much faster and strengthen it as a regional revenue stream, even as our core domesticbusiness continues to be under tremendous pressure from rapidly declining domestic traditional mailvolumes”.
He said SingPost would accelerate investments into its regional capabilities, “especiallytechnology and infrastructure”, although he insisted the partnership would not distract SingPostfrom its “foremost priority”, as Singapore’s Public Postal Licensee (PPL), “to provide high qualitydomestic mail services to meet our service obligations in Singapore”.
Commenting on NZ Post’s sale of CouriersPlease, New Zealand Post Group CEO Brian Roche saidthe sale of the company was “a strategic decision to allow New Zealand Post to focus on itspriorities in New Zealand”. He added: “New Zealand Post will use the proceeds to invest in ourbusiness transformation in New Zealand as part of our five-year strategy, while Singapore Post iswell-placed to support CouriersPlease’s future growth prospects in Australia.”
He said New Zealand Post had rejected an offer from another party to buy CouriersPlease in2012. In the mean time, he said a “well-executed growth strategy and a strong market” had enabledNew Zealand Post to gain value from the company.
“The CouriersPlease business has performed extremely well and been a highly successfulinvestment for New Zealand Post, increasing in value on the strength of a clear strategy and itstrading performance since we bought it outright in 2012,” said Roche. He said the sale had beenapproved by the Australian Foreign Investment Review Board.
