by Gugu Lourie
The crippled South African Post Office (Sapo) is targeting e-commerce and financial services as a way to salvage its declining business.
The organisation, which is led by Mark Barnes who assumed the CEO position in January last year, is collaborating with various partners to make its e-commerce plans a reality.
Barnes said in a statement on Tuesday that Sapo was focusing on e-commerce in collaboration with the Universal Postal Union, and local and international players to make a case for South Africa being an e-commerce hub for the Southern Africa region.
He added that as part of plans to focus on e-commerce Sapo intends to expand its space at OR Tambo International Airport by 70% and the organisation is also engaging South Africa’s port and rail operators.
Barnes said this move would enable the Post Office to launch a new courier business after it closed its courier, parcels and logistics business operating through CFG (the Courier and Freight Group).
The growth of the Internet and entry of private mail firms in South Africa has negatively impacted Sapo’s core business of delivering mail and parcels.
Post Office to Register as a Bank
Meanwhile, Postbank, a banking division of Sapo, was granted approval by the South African Reserve Bank to establish a bank.
The Post Office will submit an application to register its financial services unit, Postbank, as a bank by July 3, a document handed out in parliament showed, according to Reuters report.
Postbank has R1.4 billion in excess capital, enough to meet regulatory minimum requirements for a bank, the document showed.
The department of telecommunications and postal services was engaging with the South African national treasury to expedite the corporatisation of the Postbank.
“Nominees have passed the fit and proper process and will be appointed after following due process.,” Siyabonga Cwele, the Minister of telecommunications and postal services, said in a statement.
The Postbank will provide inclusive financial services at the right cost to communities in rural areas, added Barnes.
He also said that the Sapo was interested in participating in the distribution of the South African Social Security Agency (Sassa) grants.
The Sassa tender was given to CPS, and its parent Net1, was ruled invalid by the court in 2014 and it has remained mired in legal challenges and controversy, including allegations of unlawful deductions made from grant beneficiaries’ accounts, according to M&G report. Although the court ruled the contract invalid, it suspended its finding to allow Sassa either to award a new tender or begin paying grants itself.
As part of its plans to provide financial services products, Sapo has been upgrading its IT infrastructure.
Sapo’s stable IT environment is an important cog of the turnaround, said Sapo board member Mduduzi Zakwe.
“It is a platform to launch new innovations and it is being modernised through an upgrade of our network and systems for financial services and mail operations. We are undertaking a technology upgrade at our data centre to improve resiliency because our customers are expecting secured services,” he said.
The Sapo strategic turnaround plan was approved by cabinet in June 2015.
“The Sapo is a Titanic. It is large and takes the time to turn but it is turning into an organisation that play an increasingly important part in the radical transformation of our society,” said Cwele.
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Large number of post offices will eventually loose its primary purpose. So it’s no wonder Sapo is now focusing on ecommerce, it’s logical step. They should focus on fulfillment services which have to be considered as one of the biggest issues when starting.