Here’s SingPost’s grand plan to rule ecommerce in Asia

Update (March 7): The article previously stated that SingPost’s annual profit was US$29.4 million. That is incorrect. It is US$111 million.

As snail mail fades in relevance, the US Postal Service is sinking along with it. But SingPost (SPOS.SI), the Singapore equivalent which is privately-run rather than government-driven, has avoided the same fate.

Despite suffering two consecutive years of decline in mail volume, SingPost’s bottom line has received a boost from its logistics, retail, and ecommerce operations. Its revenue now stands at S$628 million (US$494 million) in the three quarters of the latest financial year, up from S$476 million (US$374 million) in the previous period. Ecommerce, which includes its shipping and services for retailers, now makes up 28 percent of total revenue.

The venerable company’s transition from traditional postage into modern ecommerce has been stunning. Founded in 1819 – the same year Singapore was founded as a British colony – SingPost’s transformation only took root in 2003.

In that year, it launched vPost, a delivery service that enables Singaporeans to shop from US websites using a virtual address. Then in 2011, it unveiled luxury brand store Clout Shoppe, its first foray into direct online selling. But SingPost only truly emerged out of its cocoon in 2013 when it unwrapped its vision of how it will play a role in Asia’s fast-rising e-commerce landscape.

SingPost as a startup

There is no signage pointing the way to SingPost’s ecommerce division, a 70-person outfit tucked away in a newly constructed office building just a block down from SingPost’s Singapore headquarters.

A construction site sits next door, ostensibly for another office building, just one of many that are popping up around the area. A pounding machine reminds the team that everything is still a work in progress.

“We have a BBQ pit and a ping pong table,” says Marcelo Wesseler, the senior vice-president of ecommerce at SingPost. “We’re trying to recreate a startup atmosphere so as to attract the young engineers and technology guys.”

SingPost’s ecommerce plans have been solidifying in the past year. The centerpiece of its major push is SP eCommerce, a comprehensive ecommerce product that launched in April 2013 and now has over 200 paying clients including big brands like Adidas, Groupon, and Quiksilver. These are brands that want to sell online in South Asia and Australia but lack the knowhow to do so.

Rocket Internet’s Zalora is a customer too, but in this case, it’s about melding its e-commerce expertise with an existing logistics network.

Essentially, what SP eCommerce does is provide everything a retailer could ever need to start selling online. Think of it as ecommerce consultancy that trims the bullshit and does the actual heavy-lifting, going heavy on analytics and technology.

The service amalgamates three components – web store fronts based on Hybris and Magento, an order management system called Supplizer, and a warehouse management and shipping system – all built on top of its logistics and warehousing network.

“It’s about helping clients find the most ideal way to ship from point A to B,” says Wesseler.

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