POSTA KENYA: BANKING ON INNOVATION

Since the introduction of the first state-run courier service in the first century AD, global postal services have evolved at a slow rate. For instance, the first ever postage stamp was issued in 1840, almost 2000 years later. For the longest time, the core business of the postal service revolved around delivery of letters to citizens and businesses. But that’s fast changing.
The emergence of digitally enhanced entrants in the courier industry has seen most postal corporations across the globe recording declining mail revenues.
Indeed, an Accenture study found out that mail delivery contributed 55% of all postal revenues in 2007. By 2015, that figure had dropped to 44%. The emerging and converging technologies and the increased penetration of the mobile phone as well as shifts in local and global scale are putting pressure on postal corporations to digitalize to remain relevant in an ever changing environment.
Established through an Act of Parliament (PCK Act 1998), Postal Corporation of Kenya operates as a commercial public enterprise. It boasts of a robust network of postal outlets, totaling to 625. In all the 47 counties, PCK has at least two Post Offices. While these might see to be enough given the geographical reach, they fall below the requirements of the Universal Service Obligation that’s used by all Postal offices across the globe. The USO requires each post office to reach only 6000 persons. In Kenya, each post office serves 70,000 people.
“Our mission is to provide innovative communication, distribution and financial solutions to all our customers as we create value for stakeholders,” says Dan Kagwe, Post master General.
Postal services are classified as a basic human right by the United Nations Charter. As such, PCK’s role is to provide accessible, affordable and reliable postal services to all citizens, in any part of the country.
Even as it continues to deliver on its core mandate, PCK is cognizant of the changing landscape and the trends like electronic mail, which threaten to encroach on the corporation’s core business. With the popularity of e-mails, most people tend to question the relevance of the post office in the 21st century.
Postmaster General Dan Kagwe says that the corporation is banking on innovative digital models, robust foundational strategic and tactical frameworks to stay ahead of the competition.
One of its solutions to the dwindling mail revenues is diversification. Essentially, PCK has diversified to provide a wide array of services including courier, clearing and forwarding and financial services. Under mail services, the corporation has corporate mail, Philatelly, private letter boxes and ordinary letters.
Courier services include; Posta Cargo, Travel Lite, EMS, and parcel services. Under financial services, it provides money orders, PostaPay, utility payments, agency banking, mobile money transfers among other services.
Other than this, it’s utilizing its brick and mortar capacity optimally, by providing the national government, financial institutions and SEs with a n avenue to reach millions of people in t6the last mile through the post office. It has over 500 000 letter boxes that are 90% utilized as of this writing. While private letter boxes are a legal requirement for companies, they also give individuals a sense of belonging.
To give customers more value at a time when the electronic mail is becoming the most preferred communication method for companies, PCK introduced the virtual box, a USSD based innovation that enables users to access postal services via the mobile phone or a website.
Additionally, the corporation is aiding the growth of ecommerce by providing a last mile hub for companies dealing in courier services. Such organizations struggle to reach people in far flung counties due to infrastructural challenges.
Furthermore, Posta Cargo service allows anybody to easily import cargo without worrying about the hectic clearing and forwarding part. It’s a full house logistics solution for customers.
PCK is also making inroads into the financial services sector. It’s boosting financial inclusion by supporting agency banking. With over 100 point of sale devices in 470 post offices and a partnership with six banks, the corporation is allowing financial service provides to reach millions of unbanked people across the country.
The corporation is also a national payment gateway for the government. Indeed, the government channels its social protection funds through the Post Office.
PCK avails its post offices to be used in service delivery as Huduma Centers, a partnership that has seen the government take its services to the people, even those in far flung areas. So far, half of all Huduma centers are hosted by PCK.
The corporation is also partnering with over six banks, including KCB, Equity, Coop, Diamond Trust Bank and National bank to offer agency banking services through the post office. Furthermore, the corporation enhances the growth of ecommerce by providing last mile hubs for the government, citizens and other enterprises.
While the decline of mail revenues could have spelt doom for the postal corporation, it didn’t. Interestingly, the number of corporate mail and private letter boxes has been on a growth trajectory. Contributing 70% of PCK’s total turnover the company delivers all manner of letters, including legal documents from the judiciary, bank statements, vital documents like title deeds and log books, company registration certificates and school admission letters. All of these mails require a physical delivery that can only be provided by the post office owing to its huge network across the country.
There’s no denying the crucial role that postal corporations play in the ecommerce industry.
According to the Universal Postal Union, a UN Specializing agency on postal matters, there are over 600,000 postal outlets across the globe. Combined, these have the power to spur the growth of ecommerce, to enhance financial and social inclusion. So far, the UPU reports that over 1.5 billion people worldwide are actually using financial services provided through the post office.
So, what’s Posta’s role in the local ecommerce industry?
In recent times, growth in e-commerce has outstripped growth in the posts’ parcel volumes. The key role of the Post in the e-commerce chain is last mile delivery to the customer, and in the face of growing competition in the delivery sector, Posta is also providing a payment platform as other ways to profit from e-commerce.
They are providing space in their interactive website for customers, which is a powerful tool for online advertising and marketing by the online retail shops both locally and internationally. Through this, Posta facilitates small producers and retailers to start selling online, and in the process make commissions on sales while growing parcel volumes.
The Corporation is exploring partnering with Amazon Web Services and Alibaba Group Holding Limited to help local traders and retailers import into the country through its platform and benefit from the last mile delivery logistical services. In addition, Posta ise leveraging on technology to provide value added services such as track and trace of the shipment thus offering the local customer end to end visibility which is geared towards building trust.
Their postal networks are extensive, with Post Offices located in every County and most importantly in remote areas. With this in mind, they are piloting digital parcel lockers dubbed Swipbox for a “click and collect” solution for e-commerce, where customer’s items are deposited directly to their Digital box of choice to await collection. This gives certainty to the customer and removes the risk of a failed first-time delivery. More interesting is the concept of setting up hubs at strategic and convenient locations for temporary storage of consignments before collection by the customer. The corporation also intends to reduce on the waiting time between placing an order, shipment and delivery by storing non-perishable items manufactured by big brands in the local stores, for prompt delivery upon successful on-line shopping by the customer.
Kenya’s postal Corporation has had a long journey punctuated by impressive milestones. Since 2016, the corporation has grown its product offering to including clearing and forwarding services. Its biggest milestone since then was the clearing, forwarding and distribution election materials for the IEBC in 290 constituencies for the 2017 general election and the repeat presidential elections.
They have also modernized and automated all their major outlets by installing Post Global counters and POS systems. Recently, they acquired a fleet of 22 vehicles for operations and service delivery.
As far as corporate social responsibility goes, Posta hasn’t been left behind. The corporation recently constructed the Kenyatta National Hospital Pediatric Care service waiting bay, in May this years.
Despite having diversified into other services, PCK is not resting on its laurels. It continues to unleash innovative solutions, including the Tunza Nyumba Na Posta, a service that links retailers to the consumers of basic household items, through ecommerce.
Recent innovations under the Posta brand include; EMS2GO, a mobile application preloaded with all Posta services. It’s designed to be used by over 25000 motor bike riders.
Mpost is another innovation that to receive letters by converting their mobile phone numbers into a formal postal address. The most interesting piece of technology, however, is e-Njiwa, a service that enables users to create virtual serial boxes serially running over and above the installed physical capacity. It also allows users to create e-stamps based on QR code technology. Other notable innovations include Posta mobile wallet and Posta digital parcel locker.
Financial sustainability is one of the key considerations for any corporation and Posta is not an exception. Despite the lull in the mail delivery business, Posta has been self-sufficient and doesn’t depend on the national government to fulfill its financial obli9ogations. In the financial year 2013/2014, the corporation recorded Kshs17.3 million in profits. In the current year, Posta’s total turnover stands at Kshs4.1 billion.
With its diversified units chugging in unison, Posta is raring to become a key pillar in Kenya’s economic and social development. It’s also keen on working closely with the governed to deliver the Big 4 agenda.
“Our strategic partnership will soon pay off.”
With the enhanced capacity, diversified units and great ambitions, it’s easy to see why the Postmaster General is bullish about this state corporation.