Can Government Postal Service Become a Dependable Logistics Partner To Dhaka’s E-commerce Industry?

Can Government Postal Service Become a Dependable Logistics Partner To Dhaka’s E-commerce Industry?

Logistics has been a nightmare for Dhaka’s thriving E-commerce scene. Almost every e-shop owners, be it a Facebook store or full-fledged e-commerce site owner, complain about the poor delivery network, poor customer service, fraudulent payment behavior in case of COD against existing logistics services aka courier services.

Since the demand for a dependable logistics partner for E-commerce is proven, we are seeing the entrance of new businesses almost every month. Gogo Bangla, a spin-off of Chaldal, has already started their operation which, according to their claim, is more than only delivery service. SSLCommerz has also launched their own logistics service namely Bidyut targeting booming e-business.

While all these private sector initiatives offer assurance to e-commerce founders to an extent, they are far from being a perfect solace to the actual service demand. One of the major shortcomings of existing e-commerce courier services is their poor network. These new generation logistics companies are based in Dhaka and they are mostly good at delivering within the metro. Though most of the orders made online are generated from Dhaka and Chittagong and other metro areas, orders from out of divisional cities of Bangladesh are growing rapidly.

Ajkderdeal, the leading marketplace of the country, has reported that more than 70% of the orders are coming from out of Dhaka and they are pursuing an ambitious plan to bring their reach to village level by partnering with different NGOs and merchants like Paywell.
It is certain that not every e-company can pursue paths like Ajkerdeal, nor it is the standard way of expanding e-commerce. Having a dependable logistics infrastructures is very critical to the growth of this online business, which is the case of almost all the countries around the world.

In Bangladesh, like almost every other country on the planet, government-run postal services has the last-mile coverage in terms of delivery network. But due to the poor quality of services and lack of reliability, almost no e-business in the country rely on this government service. However, recently a move came from E-commerce Association of Bangladesh (E-CAB) which has managed to ink a deal with Bangladesh Post Office (BPO) to launch e-commerce courier delivery from 29th December 2016. State minister of Post and Telecommunication Tarana Halim said, BPO will become the central point of E-commerce in Bangladesh

While the attempt to incorporate a government body to support a new wave of entrepreneurs is a praise-worthy move, many are dubious about the usability of the service, thanks to the past history of distorted service of BPO. Industry insiders are hardly buoyant about the possibilities that BPO could offer to the entrepreneurs. Mujibul Haque, a Malaysia-based E-shop owner who supplies goods to Bangladesh upon sourcing from China, noted that government postal service is no better than a retired soldier and is in deep slumber for last 15 years. According to the available data, BPO dealt with 230 million letters and parcels in 2004, while the number stands at 40 million only in 2014.

It is evident that BPO has few but strong challenges to overcome to become a somewhat dependable logistics partner to Dhaka’s e-commerce industry. Here are a few to list:

1. E-commerce readiness: While e-commerce is no different than traditional trading in terms of buy-sale, it is way different in terms of customer service and satisfaction. This differentiating dimension demands that every partner in e-commerce service chain must act in sync to ensure the desired service. As the logistics provider, BPO is hardly prepared to meet the demand. The BPO must understand the nature of the business, the level of service expected by the customer and train their staffs accordingly.

2. Cash Handling: COD is the de facto payment method of our E-commerce sector and it will remain so for some more year. Fortunately, BPO has Value Payable Post (VPP), a COD equivalent product for ages. In India, government postal service has delivered INR 15 billion worth merchandise on COD in 2014-15, which is expected to double in the coming years. If BPO can convert its VPP into COD, this would be a good news for E-business owners.

3. Customer Service: Government service is below standard and a target of criticism around the world. For BPO it is even more challenging, because the expected level of service is high enough and existing courier businesses are critiqued for failing to match customer expectation.So, BPO has to adopt modern amenities like product tracking, payment tracking, COD repayment mechanism, online support channel etc. to become responsive to the customer at a basic level.

4. Merchant services: A portion of existing courier providers provides various merchant services i.e. standard product pick up, consignment tracking, payment tracking etc. BPO hardly has any setup to provide these types of service.

BPO has 9,886 post offices around the country and 8,460 of these offices are out of divisional cities. They have a huge workforce of almost 40,000 people. This huge network and manpower indicate that only BPO can now ensure last-mile delivery to take e-commerce to the remote part of the country.

Mujibul Hoque has contributed to the story.

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