It inked a deal with Y Ventures to collaborate on e-commerce and logistics technology.
Singpost has entered into a non-binding memorandum of understanding (MOU) with Y Ventures on 2 March 2018. According to DBS Equity Research, this will allow the two to collaborate on an e-commerce buying platform, focussed on cross-border purchases on behalf of consumers, and consolidated deliveries and a logistics-related technology to enhance efficiency across the vertical logistics chain.
Y Ventures is a data analytics-driven, e-commerce retail, and distribution company which was listed on Catalist in June 2017. Both Singpost and Y Ventures are still negotiating the terms of definitive agreements.
This means good for SingPost as for the last few years, it has gained traction in its international mail volumes, mainly from Alibaba, with international mail accounting for 60% of its total mail volumes as of 9M2018.Singpost's new Regional eCommerce Logistics Hub is also able to handle large cross-border volumes and utilise its parcel sorting machine for parcel deliveries.
DBS Equity Research analyst Sachin Mittal noted that Singpost's US entities, Jagged Peak and TradeGlobal, currently offer various e-commerce solutions to its clients. “For example, Jagged Peak's cornerstone software technology can offer end-to-end solutions in a) content management engine; b) order management capabilities; c) warehouse management; d) and transportation management which can be integrated with clients’ internal systems. E-commerce buying platform represents a new area of opportunity for Singpost's existing businesses,” he said.
Mittal added, “Whilst the concept of e-commerce buying platforms on behalf of customers and consolidated deliveries is not new to Singapore – companies including Ezbuy have garnered good traffic in Singapore and in the region – we believe an e-commerce buying platform is somewhat a natural extension of Singpost's existing business, as Singpost already has existing logistics networks and investments in hardware, i.e. its Regional eCommerce Logistics Hub.”
Singpost, with its strong logistics network locally and partnerships in the region, may have operational efficiencies compared to e-commerce buying platform competitors. “Other synergies to be drawn While we believe an e-commerce buying platform is different from Singpost's existing technologies, we believe there are potential synergies to be drawn from collaboration with Y Ventures. Logistics-related technology can also potentially help improve Singpost's existing operations,” Mittal concluded.
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