HomeBusiness DigestZimpost weathers tech storms

Zimpost weathers tech storms

It was inconceivable a few decades ago to suggest that Zimpost, a postal services company, would be such a diversified firm as it is today, with interests in logistics, financial services and real estate.

Fidelity Mhlanga

In retrospect, anyone suggesting sending letters would be a thing of the past and would be replaced in large part by mobile short message services (SMS), electronic mail (e-mail) and even over-the-top-technologies such as WhatsApp and Viber would have been dismissed as a tad insane.

Harare Main Post Office
Harare Main Post Office

The launch of the mobile phone in the mid-1990s in the country and the e-mail penetration as a faster and smarter way of communicating resulted in a serious decline of business for Zimpost.

Before the emergence of the e-mail and the mobile phone, Zimpost and the then Postal and Telecommunications Corporation of Zimbabwe, enjoyed monopolies in postal services and telecommunication.

But that was then. The impact of new technologies would be felt from the turn of the century as more people went digital.
Volumes have dropped by 86% since 2000 due to breakneck changes in technology, although revenue has been steady at US$20 million annually.

As at December 2015, Zimpost moved about 11,6 million letters domestically and 2,3 million international mail pieces as well as about 30 000 parcels.

With the coming of e-mails and sms, Zimpost management was forced to relook its business or close shop. Others in the same business elsewhere had collapsed.

Aided by the fact that the postal business was largely a huge brick and mortar entity, the business had huge fixed assets, real estate was a natural choice given the acres of space left vacant.

Zimpost operates a network of over 225 postal outlets comprising of fully fledged post offices, off-counters, sub-post offices, postal agents and mobile post offices.

The company has set up a real estate strategic business unit buoyed by its fixed assets in the form of buildings.
The company is also now into transport and logistics. It runs Courier Connect, a courier and carriage service company that started as an offshoot of Zimbabwe Posts (Pvt) Ltd. It already had an established branch network in the country’s urban centres complemented by the expansive postal network in Zimbabwe.

Most businesses have over the years developed from the traditional brick and mortar way of doing business to e-commerce as leaders try to keep up with fast evolving technological advances.

Zimpost’s adoption of information communication and technology and diversification has played a major role in remaining relevant and staying in business.

A shift “beyond the envelope” through embracing new technology, diversifying to real estate, third party transactions have helped Zimpost stay afloat in the cut-throat edge of digital technology.

Zimpost introduced ZipCash — a mobile money platform by the postal service company and transactions have grown to US$300 000 by January 2014 and presently Zimbabwe is transacting with Nigeria, South Africa, Botswana, Kenya and Tanzania .

The practice of the platform in United Arab Emirates and Malawi are still at testing stage.

ZipCash is a mobile voucher loaded on one’s mobile phone, which can be used for shopping online, paying your utility bills, buying prepaid mobile recharge cards. and vouchers for other retailers.

“Given the number of countries on the system, the volumes are not disappointing but we are not there yet given the potential for inbound remittances,” Zimpost managing director Douglas Zimbango said.

Zimpost also offers third party transactions for motor vehicle insurance and licences in partnership with Zimbabwe National Roads Administration (Zinara), Zimbabwe Broadcasting Corporation (ZBC) and NicozDiamond.

These have proven to be popular payment points with various motorists.

It also offers financial services to Steward Bank, POSB and Econet, among others.

“Zimpost will continue to partner with more companies and automate its systems to grow this side of the business through utilisation of the extensive network to reach all corners of Zimbabwe,” he said.

Its subsidiary Courier Connect moved 15 million pieces domestic letters, international mail and parcels last year.

Last year, a Memorandum of Understanding (MoU) was signed between Zimpost and Shanghai YTO Express (logistics) Co. Ltd that will see YTO consolidating parcels from China to Zimbabwe and other Southern African countries. Zimbabwe will thus act as a hub for distribution of courier items. In turn, the planes transporting courier items to Zimbabwe will then carry mail and other postal items from Zimbabwe to the rest of the world.

As the relationship grows, it will graduate to promote and include capital investment into the Zimbabwean operations. E-commerce business between Zimbabwe and China will thus be enhanced.

Although Zimpost is still in the red, Zimbango is optimistic the new business model could change its fortunes.

Already, the new model is proving to be a success. As at December 2015, over 20 % of total revenue was coming from third party transactions whereas 7% of the group’s revenue is contributed by the real estate business.

Zimpost has also adopted the use of information and communication technologies (ICT) tools in its provision of postal and other services, to bring convenience with 145 out of 239 outlets computerised and networked. A wide range of universal postal, courier, communication and financial services have since been introduced in line with modern trends.

“With the advent of new technologies, Zimpost has adopted and deployed international technology systems to deliver value added services to its customers such as, International Postal System (IPS) to track and trace mail movement worldwide, International Financial System (IFS) and Global Monitoring System (GMS),” Zimbango said.

According to Zimbango, IPS is an application that was designed by the Universal Postal Union for postal administrations, worldwide, to use in the management of letters and parcels. It documents, tracks and traces all mail and priority items transmitted internationally and locally if required by designated postal operator.

IPS stores and transmits information on dispatches as well as their status, routes, flight schedule, accounting information and various other functionalities, designed to assist designated operators in their day to day operations and in mail management.

As mail travels through various stages within the Postal network (be it local or international) there are events or stages that the system records. The capturing of these events or stages is continuously transmitted and is used to determine a postal operator’s performance against set standards from the time an item is posted to the time it is delivered.

Zimbango said they also use IFS — an electronic platform which connects selected post offices worldwide and allows customers to send and receive money without tying them to a bank account.

Zimpost now uses the GMS to measure its quality of service whose primary objective is to provide each participant with accurate, high-quality operational results.

It is a technology that uses (radio frequency identification) RFID to monitor quality of service (QOS) using electronic barcodes embedded in mail bags, which are detected by the readers and antennas installed at the entrance or exit of an exchange office. This system then relays information to a central server located in Europe for the accurate and efficient recording of mail movement data along the delivery chain.

This QOS monitoring system was designed to assist postal operators to become more efficient in the movement of inbound international mail.

Economist Prosper Chitambara said other countries have privatised their postal services companies to remain profitable in business.

“They (Zimpost) don’t have an option. In some countries they have closed shop. They need to be innovative and diversify to other sectors. If they don’t do that they risk going into extinction. I am not sure if they are financially equipped to do that. In other countries, they have privatised their postal services,” he said.

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