Don't mind Cabinet's mistrust, Amazon has faith in India Post

Finally, someone is taking note of India Post and that someone is no small fry. It is global online retail giant Amazon. According to a report in The Economic Times, Amazon India is piloting a project to try out cash-on-delivery model through India Post. If everything goes well, our humble postman/woman will be delivering your Amazon order and taking cash from you in the near future. The big lure for the global giant is India Post’s vast network–about 1.55 lakh of them. Amazon will be able to reach out to remote areas in the country leveraging on the network. The company is already sending its packets through India Post, says the ET report. The plan is to make use of its speed post service. Customers in certain cities like Mumbai, Pune, New Delhi, Hyderabad and Pune can also opt for the One Day Delivery service for an additional charge of Rs 99, with no minimum order value required. Mumbai and Pune customers will be able to place their last orders until midnight and still receive their items the next business day, while other cities have a 3pm deadline for expedited delivery. There is also the recently launched Amazon India app for tablets and smartphones that lets customers shop on the go. It is a win-win. “Amazon would gain reach while India Post would benefit from the company’s aggressive growth plans,” says the report. As many as 1.4 lakh of India Post’s offices are in rural areas. There is virtually no corner in the country where an postman or woman would not reach. If Amazon manages to use this efficiently, it will change the geographies of the Indian online retail, which is now in the cusp of a revolution. According to a recent report in Reuters citing a Technopak research, online retail sales in India are forecast to grow more than a hundred-fold to $76 billion by 2021 from just $600 million at the end of 2012. But the sector is plagued by issues. Most Indians do not own a credit card, and less than half the 152 million Internet users have shopped online, the report said. But Amazon is trying to win customers by offering free and on-time delivery. As far as India Post is concerned, it has been struggling for the past few years after emails and cell phones made letter writing redundant. Very few people depend on it even for sending money. There are a lot of other electronic means to send money rather than depending on costly money orders of India Post. Remember, lack of customers had forced the postal department to shut down its telegraph services. Not surprisingly, India Post posted a Rs 6346 crore loss in 2011-12, according to this report in Mint. [caption id=“attachment_895463” align=“alignleft” width=“300”]  AFP[/caption] India Post has been looking at ways to find new revenue streams. A recent Business Today article said it plans to bring in Rs 100 crore of annual revenue from its two newly launched parcel services - Express Parcel and Business Parcel. The biggest hope is the banking licence. India Post is one of the 26 aspirants and hopes to cash in on its network. The ground work is being done. But the Cabinet has thrown a spanner in the works on the pretext that it does not have the necessary expertise. The Cabinet may not have faith in its abilities, but Amazon has.