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Analysis of the Russian market of automated postal stations

April 2016

Analytical Report (full version)

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Analytical Report (full version)

Analysis of the Russian market of automated postal stations
Analysis of the Russian market of automated postal stations
April 2016

Analysis of the Russian market of automated postal stations

April 2016

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At the moment there are many solutions for Internet commerce that allow to optimise logistics and business processes of enterprises working in this field in Russia. One of them is the use of networks of automated postal stations, as one of the solutions to the problem of delivery to the consumer.

 

J'son & Partners Consulting presents brief results of their market research over automated postal stations (automated parcel terminals/packstations).

 

 

Development of the Internet commerce market in Russia

 

Development of the Russian market of automated postal stations, is determined first of all by the growth of Internet trading. By the end of 2014 the volume of the Russian market of Internet trade exceeded $683 billion, and for 2010-2014 it had been growing on average by 40.2%. According to preliminary estimates, in 2015 the market also showed a slight increase, despite the difficult economic situation and the volatility of currency exchange rates: according to the Association of Internet Trade Companies (AITC), in 2015, the market grew by 7 percent to 760 billion rubles.

 

 

One of the most significant barriers to the development of Internet commerce in the Russian Federation is an acute problem of logistics, in particular the so-called "last mile" – the stage of delivery of goods personally to the customer.

 

 

The market for automated postal stations in Russia and the world

 

Shipping is the most important process in e-commerce, as it is the final link between the customer and the online store, it impacts on possible next purchases, the level of loyalty of the buyer and the subsequent recommendations of the online store. In addition, it is an important link in the chain of pricing. Automated postal stations (automated parcel terminals/packstations) allow to reduce shipping costs and improve efficiency at the point of the "last mile". They are installed in places where customers can collect or return parcels 24 hours a day, with the result that these stations are becoming more widely spread in the world. Instead of waiting for the delivery at home buyers can authorize shipping to the nearest automated parcel terminal where they can enter a special code and/or pay for the goods, after which take the parcel out of the cell. Being positioned in convenient locations such as train stations, shopping centers, gas stations, automated postal stations provide convenient alternative to home delivery or any other points of delivery with fixed hours of work. Realisation of delivery via packstation systems also helps the companies engaged in e-commerce to reduce the costs associated with courier services.

 

The first such devices appeared in Europe in 2001 and were made by order of the German international company DHL Express. Soon such successful experience spread throughout Europe, and by 2007, the automated parcel terminals started being used in almost all countries of the world. The number of cells in automated parcel terminals usually varies from 36 to 76. The size and combination of types of cells depend on the manufacturer and the need of a certain number of cells at this exact location.

 

 

If a buyer did not pay the order online, he/she can do that with help of the automated postal station. A special feature of Russian equipment is the ability to select a payment method: credit card or cash (in developed countries, payment is made only via a bank transfer).

 

There are two key players on the Russian market at the moment: PickPoint, In Post (ex. QIWI Post). "Russian Post" also begins to develop its network of automated parcel terminals.

 

At the end of 2015 there were 1070 automated parcel terminals in Russia. Under favourable conditions, this number can reach around 12 000 units by 2020.

 

 

Obstacles for wider distribution of automated postal stations are such aspects as:

  • high investment costs, which, in addition to the cost of equipment include costs for management, maintenance, repair and operating costs (e.g., electricity);
  • possible difficulties in obtaining a suitable location for installation of automated parcel terminals (negotiations with the owners, lease contracts, legal aspects).

 

The market for automated postal stations in Russia expects a high growth due to the positive dynamics of the market of Internet trade and also due to the desire of online stores to reduce costs associated with logistics.

 

 

 

Comments of the market participants

 

Nadezhda Romanova,

PickPoint,

CEO

 

What prospects for the use of automated postal stations (automated parcel terminals/packstations) do you see in general?

 

The use of packstations is interesting and effective for those businesses, in which end customers want to easily receive or return goods within walking distance from home, work or school.

 

Client return will be one of the most popular packstation services in the near future.

 

 

At the moment the service of client return of goods in terms of distance commerce is underdeveloped, although it has a direct impact on customer loyalty and, as a consequence, the attractiveness of online trading. Thanks to a convenient close location and automation of the necessary processes, packstations will help the market with solving this problem and attract new customers to online shops.

 

 

In general, the services of packstations can be useful not only for clients of Internet-shops. Customers of laundries, tailors, shoe workshops may eventually become a prominent category of clients of such terminals. If the apparate is not in a walking distance, it will be much easier for the recipient to choose the delivery to terminal near their house.

 

 

In the future, packstations can find their application in the field of food delivery. It is quite convenient instead of going to a store on the way home, spend some time choosing the right products, and then pick up the order. However, it requires additional hardware terminals, so we can not talk about the mass implementation of such a function before the stage of the market saturation.

 

 

How fast is the use of automated postal stations growing in Russia? What are the trends in this market?

 

 

Every year the number of shipments increases more than 1.5 times. For PickPoint in 2015 this growth rate was 1.66%, to slightly more than 3 million items.

 

 

At the end of 2016 the Russian market of packstations will celebrate its sixth birthday. Packstations have become one of the mandatory delivery channels for online stores and buyers started to choose the online seller according to the fact of the presence of this channel.

 

 

The last 1-1,5 years the Russian Internet-shops have started to optimize their costs, to abandon non-core divisions, in particular from private courier services and hand the delivery logistics to other companies not only in regions but also in Moscow and St. Petersburg. The released volumes to a large extent moved to the packstation segment because this delivery channel is more convenient for the recipients.

 

 

Thus, packstations have already found their niche in the infrastructure of the logistics market of B2C delivery and will soon cease to be exotic, even in remote areas.

 

 

How is it planned to increase the number of automated postal stations of your company in the next few years?

 

At the end of 2016, we plan to double the number of operating PickPoint packstations, then it will be 1.5 thousand units. According to preliminary estimates, in the next three years, the annual expansion of the PickPoint network will be at the level of 700-1000 units per year. In our plans, we base on the demand for this service from end recipients and the level of the market saturation, which is insufficient in Russia. However, we do not exclude the possibility of adjusting the plans in one or another direction depending on the economic situation.

 

 

AndreiChechin,

 

InPost,

 

CEO

 

 

What prospects for the use of automated postal stations (automated parcel terminals/packstations) do you see in general?

 

 

Among the advantages of the use of automated parcel terminals I can highlight the following points:

the convenience of receiving: the terminals are located in areas with the greatest traffic (shopping centers, business centers, gas stations, and hubs). We choose only those places that do not need a separate visiting;

 

security and privacy: when a parcel gets to the packstation, the buyer gets an SMS with a personal code. No one can receive the order instead of the recipient;

 

favourable price: delivery to packstations is, as a rule, cheaper than all the other methods of delivery;

 

– express delivery: while receiving the order clients do not need to wait for the courier or to change their schedule. And what is more there are no queues. You can get the order at any time which is convenient to you. On average you need 17 seconds to receive the order;

 

24/7 service: most automated parcel terminals are available 24 hours a day, 7 days a week. No lunch/breaks/days off!

 

 

We see the following prospects for the use of automated parcel terminals:

 

– it will soon be possible to send documents and bank products via automated parcel terminals;

 

– in a short time it will possible to use automated parcel terminals to return goods. For example, if you had ordered shoes, but they did not match, you can put them in the packstation and we will return it to the online store.

 

 

How is it planned to increase the number of automated postal stations of your company in the next few years?

 

At the moment, InPost has 380 terminals throughout Russia, but since next year we plan to install 1,000 automated parcel terminals per year. Taking into account the growing demand for shipping to automated parcel terminals, the growth of this market will not end for several more years.

 

 

 

 

Detailed results of the research are presented in the full version of the report

 

«Analysis of the Russian market of automated postal stations»

 

 

Rough contents:

 

 

Summary

 

 

Main terms and definitions

 

 

Introduction

 

 

  1. Analysis of the market of Internet trade in the Russian Federation

 

1.1.        Volume and dynamics of the Russian market of Internet trade

 

1.2.        Structure of the Russian market of Internet trade

 

1.3.        Main drivers and barriers for the market development

 

1.4.        Trends

 

  1. Automated postal stations

 

2.1         The role of automated postal stations in e-commerce

 

2.2         Used payment systems

 

2.2.1     Coin and bill acceptors

 

2.2.2     Cashless payment systems

 

2.2.3     Mobile payments and NFC

 

2.3         Used systems of telemetry

 

  1. The global market of automated postal stations

 

3.1         Development of the global market of automated postal stations

 

3.2         Experience of using automated postal stations in e-commerce

 

  1. The Russian market of automated postal stations

 

4.1         Development of the Russian market of automated postal stations

 

4.2         Volume of the Russian market in natural expression 2015 and forecast to 2020

 

4.3         Structure of the Russian market of automated postal stations

 

4.4         Key trends and barriers

 

  1. Profiles of major players in the Russian market

 

5.1         Operators of automated postal stations

 

5.2         Logistics companies

 

5.3         Internet-stores

 

5.4         Manufacturers

 

 

Conclusion

 

 

Appendix 1. List of mentioned companies

 

 

 

 

This information note is prepared by J’son & Partners Consulting. We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material.

 

 

 

At the moment there are many solutions for Internet commerce that allow to optimise logistics and business processes of enterprises working in this field in Russia. One of them is the use of networks of automated postal stations, as one of the solutions to the problem of delivery to the consumer.