CA- ICT Week Presentation 2015

1. Trends in the Postal
and Courier Sub-Sector
By Richard Tonui
Competition, Tariffs and Market Analysis
Communications Authority of Kenya

2. Introduction
Postal & Courier
sector continue to be
a critical actor in
delivering solutions
that foster inclusion
in socio-economic
developments for
Many countries
Source: www.google.com

3. Introduction
In line with the United Nations Millennium Development Goals,
the postal sector's financial, electronic and physical network can
make a significant contribution towards reducing poverty
Source: fpif.org

4. Disruption by ICT’s
Postal mail is facing major
challenges from modern
instant messaging media
among others
Source: www.gaminglawtech.com

5. Leveraging on ICT’s for Growth
The Internet, together with the Postal & Courier
subsector can address new business opportunities
The new NEEDS are movement of goods/parcels
from one person to another
The postal/courier operator can provide the vital
link between the sellers and buyers
Many businesses are able to reach a wider market.
The Bulk of business relies on COURIER!
The challenge is for the subsector to move out of
traditional business to new frontiers

6. Opportunities in E-Commerce
The rise of e-commerce in
many countries is leading to
large increases in the volumes
of parcels and small packages
With decline in letter-post (
mainly social letter) volumes
Growth opportunity lies with
Parcel and small packages
market afforded by emerging
e-commerce

7. Postal &Courier/E-Commerce in Kenya
• Kenya just attained middle income
status
• Middle Income population is increasing
• Internet penetration (64.3%) is
growing, especially using mobile
phones.
• The demand for goods and services is
increasing
Source: en.wikipedia.com

8. E-Commerce in Kenya…Cont
Despite having enabling factors E.g.:
relatively good Internet connectivity compared to most countries
in sub-Saharan Africa ;
very high take-up of mobile payment services;
rapid growth in the number of electronic payment cards in
services.
E-commerce in Kenya is relatively low by international standards;
The e-commerce sector in Kenya was estimated to be worth around
USD50 million in 2012, or around USD1.20 per head of population;
In comparison, the e-commerce sectors in South Africa, Egypt and
Morocco were worth USD624 million (USD12.20 per head), USD200
million (USD2.50 per head) and USD110 million (USD3.40 per head)
respectively in 2012

9. E-Commerce Leveraging on ICT’s
Trade and services is a growth
area, with opportunities for
home deliveries picking up in
cities and across the borders.
Businesses are concentrated in
cities
Young population with
appetite for ICT Services
Source: www.lovekept.co.uk
Internet penetration, electronic payment and addressing systems, and increasing
income expected to drive/facilitate e-commerce

10. Why the Low Uptake of E-Commerce in
Kenya?
Inadequate reliable, low-cost delivery services for e-commerce items and, to a
lesser extent, the inadequacy of services to enable consumers to return unwanted
or defective items;
The lack of a national addressing system;
The high import duty and taxes on items from other countries (The total duty
and tax paid for an incoming item amounts to almost 50% of the value of the
item);
The lack of a cyber security system that allows merchants to verify the identity of
their customers and manage potential fraudulent usage;
A lack of trust on the part of consumers on items ordered online.

11. Innovation & Partnerships for Growth
Supermarkets and restaurants
on local deliveries.
Schools and training
institutions on deliveries of
learning materials
Creation of digital villages /
Resource centers for local
communities
Government agencies
Cooperative societies
Bridging E-commerce divide
for SME’s
Logistics Solutions
Apart from Parcels,
can the sector
explore providing
solutions emerging
needs????

12. Recommendations
Need for collaboration among players in the
supply chain;
Need for operators to be innovative;
Integration with efficient and secure payment
and physical delivery systems;
Need for Supportive national and international
regulatory environment;
Enhance Cyber security framework.

13. Conclusion
The postal & courier subsector will be a catalyst
for economic growth if the business:
i. Is aligned to the emerging needs; and
ii. Leverages on emerging trends in ICT
Innovation and integration is critical.

14. Thank You!