Australia Post is not about to give up, as some expect it to in our digital world. To the contrary, the government-run monopoly is embarking on its most ambitious investment plan yet.
After recently announcing its profit-after-tax grew 16.6% this year, Australia Post said it would invest $2 billion to modernise its network and launch a free “Digital MailBox” – a bill pay service and safe deposit rolled into one – for all Australians.
“Just as the traditional letterbox has been a vital part of people’s communications for the past two hundred years, we think the Australia Post Digital MailBox will become an integral part of everyday life,” Chief Executive Ahmed Fahour, a former banker who has led Australia Post for over two years, said.
Reflecting a global trend, Australia Post’s traditional regulated mail business is good as dead. This year, it lost $148 million on this business. Only its other business helped Australia Post report a healthy enough growth of profits.
Accessibility and reach key
Unsurprisingly, the Australia Post’s initiatives are in new services. However, it will not enjoy a monopoly in any of these. In fact, it will face stern competition from private firms, especially from incumbent players.
So, what will Australia Post buy with $2 billion?
Its thrust appears to be on creating a ubiquitous network that Australians simply cannot overlook. So it plans to continue on its effort to build 24/7 lockers and retail superstores. An articulated goal is to ensure that 80% of Australians in metros can find one within 10 minutes’ drive.
This, the Post believes, will help it tap the online retailing market, growing 22% year-on-year. Besides, it can help Australia Post further push sales of such things as travel insurance, mobile phones, and co-branded credit cards. The agency also is targeting international markets such as New Zealand and Singapore, and even the U.K., Ireland and the United States, expecting to compete on cost with private players.
Australia Post also said it was acquiring in full StarTrack, the shipping firm in which it acquired a 50 percent strategic stake in 2003. The deal is awaiting regulatory approval.
But whatever happened to Farmhouse Direct? The pilot plan unveiled in June that planned to unite gourmet food producers and farmers directly with customers via the Internet.