30 December 2014

SingPost - From Postal Service to eCommerce

Not too long ago, SingPost was viewed as an excellent dividend stock on SGX. Being the monopoly in postal services, it was viewed as a bedrock income stock. However, with the advent of the Internet and pervasive mobile device access, one wonders what dinosaur still need to send letters around? Numbers have been clearly dwindling in this regard.

So it is with some risk, and I feel with much strategic foresight, that SingPost brought in a new management team and started embarking on exploiting their strength, rapidly moving into eCommerce logistics by acquiring several companies. At the same time, exploiting technology to enhance and improve efficiency in their traditional postal services.

If it was once a dividend-value stock, it is now more like a growth company. Its future could yet be most exciting.

Interestingly, I read that the US Postal Services (USPS) has also started thinking along this line, recognising that its existing reach could well put it in a position to challenge UPS and FedEx. USPS has been suffering from losses and cutbacks in recent years. They're a bit slow aren't there?

Being small can sometimes a be a strength - by being nimble, complemented by foresight and the courage to take action to reshape its future. Being large has benefits in terms of critical mass, and therefore enjoying economy of scale. But a large machinery moves too slowly sometimes, grounded by its inertia.

See previous:
SingPost Joins Hand with Alibaba and the 40 Thieves

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