A declining state-owned firm has received a new lease of life on account of India’s e-commerce boom. India Post, the world’s largest postal system with staffed by 460,000 employees handling over six billion pieces of mail annually, has begun to flourish after offering deliveries to a host of leading online retailers , Snapdeal, Paytm and Shopclues.
At a time when online retail is booming, India Post’s wide reach, its well-entrenched network and a huge team of 150,000 postmen are proving to be reliable delivery partners in a logistics-starved country. The system is particularly useful to meet growing demand in rural and semi-rural markets where online shopping has begun to take off.
It is true that 90% of India Post’s post offices, nearly 140,000 of them, are located in rural India which are barely serviced by private logistics providers who prefer to operate in urban centers. A lack of reliable logistics infrastructure in rural India is proving a challenge for many online retailers. Building infrastructure from scratch to serve vast geographies is economically non-viable.
Cash-on-delivery is a popular mode of payment in India where buyers – a large segment of India – shell out cash only after their shopping arrives at the doorstep rather than pay in advance with a credit or debit card. COD is particularly handy for hundreds of millions of Indians who do not own credit or debit cards and who would otherwise be left out of the online retail boom.