The Postal Corporation of Kenya (Posta) and Safaricom yesterday launched MPost, a partnership tipped to revive the ailing postal sector and boost growth of e-commerce.
MPost allows subscribers to use their mobile phone numbers as digital addresses where they will receive notifications from Posta about their letters or parcels.
“Today, we have 450,000 physical post office boxes across the country and with 45 million mobile subscribers there is massive opportunity to expand this footprint through MPost,” said Postmaster General Dan Kagwe.
Subscribers will pay Posta Sh300 annually for the service that will also give them the option of selecting which post office to pick their deliveries from, with Posta looking to roll out five million digital post boxes across the country.
This will see it net Sh1.5 billion annually compared to the Sh900 million the firm can potentially make from charging Sh2,000 annually on physical boxes.
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“Posta’s logistical capabilities and post office branch network are well placed to meet this shift,” said Safaricom Chief Executive Michael Joseph, in a statement.
“We are therefore coming together to create value for our customers by empowering them to conveniently and affordably receive parcels and goods wherever they may be across the country.”
The deal is likely to give a boost to e-commerce service providers who have in the past cited the lack of a proper addressing system as an impediment to growth in the sector.
“We have invested in MPost to meet the shifting demands of our customers in a modern, digital world,” said Mr Kagwe.
“This partnership will enable Safaricom’s more than 34 million customers to access postal services from the 625 postal outlets spread across the country, directly from their mobile phones.”
Earlier this year, CitiBank estimated that Kenya’s e-commerce market could be worth Sh500 billion in the long term.
Reverse fortunes
“We estimate e-commerce market size could reach Sh700million in the near term, assuming average revenue per user and user penetration levels comparable to India, and Sh4-5 billion in the longer term, assuming penetration level comparable to China,” said the bank in a report.
At the same time, Posta is betting on the new service to reverse fortunes that have been dwindling in recent years owing to increased competition from the various transport operators who also run courier services.
Data from the Communications Authority of Kenya indicates the number of letters sent in the first six months of this year fell 24 per cent from 11.2 million to 9.7 million.
Courier items over the same period went up 23 per cent from 716,000 to 885,000.
