Posta fighting for survival in rapidly evolving digital era

Staff sort out mail at the Nyeri Post Office.
Staff sort out mail at the Nyeri Post Office. FILE PHOTO | NMG 

For decades the Postal Corporation of Kenya (Posta) monopolised the communication field in Kenya, commanding a large chunk of market share.

However, in recent years the firm has witnessed a downturn in fortunes due to stiff competition from other players and the Internet.

The digital age has brought in financial innovations such as M-Pesa — among other efficient mobile money transfer and loans services — that have seen traditional postal services such as money orders’ growth nosedive.

Similarly, e-commerce and email services as well as social media platforms such as Facebook, WhatsApp, and Twitter are becoming threats to the physical letter delivery service provider.

Mobile phones also continue to threaten the existence of telephone landlines and slow mail.

Figures from the Kenya National Bureau of Statistics’ (KNBS) Economic Survey 2018 show that Posta’s services such as courier operation, private letter boxes, expedited mail service (EMS), and unregistered and insured items have virtually stagnated.

The KNBS report shows that the total number of money orders issued by Posta decreased by 18.7 per cent from 870,000 in 2016 to 707,000 in 2017. Back in 2014 money orders issued were 1.3million and 1.2 million in 2015.

Since then Posta’s performance has been nosediving.

On the contrary, Central Bank of Kenya (CBK) figures show that cash transacted via mobile phones hit Sh3.7 trillion in the March 2017 to March 2018 period, helped by rising uptake of mobile loans.

CBK data indicates that volumes transacted between April 2017 and March 2018 increased by Sh219 billion from Sh3.48 trillion in a similar period a year earlier.

Further, the KNBS report indicates that posted registered and insured items dropped by 4.3 per cent from 921,000 in 2016 to 881,000 in 2017, partly explained by a 17.2 per cent fall in domestic unregistered correspondences.

In 2013 and 2014 the same items were about one million respectively.

Additionally, parcels handled decreased by 15 per cent from 80,000 in 2016 to 68,000 in 2017.

These decline is attributed to competition from Posta’s more technologically adept rivals and Internet affiliated devices.

Also, international parcels handled almost halved from 27 million registered in 2016 to 14 million in 2017. In 2013 to 2014 the figures stood at 18 and 22 million respectively.

The number of courier service operators rose by 3.9 per cent from 179 in 2016 to 186 in 2017. Similarly, the number of private courier service outlets increased by 2.2 per cent from 976 in 2016 to 997 in 201.

EMS handled in the same period declined by 1.4 per cent from 1.97 million in 2016 to 1.95 million in 2017.

However, there was a minimal 2.6 increase in the number of post offices from 623 in 2016 to 639 in 2017, attributed to the opening of new outlets in universities.

Thirty years ago (in 1987) — with a population of about 20 million — figures obtained from the KNBS portal show that external telecommunications services stood at 27.4 million paid minutes.

Telegraph services in 1987 recorded 6.8 million paid words, a far cry from its recent figures.

With decreased growth of its services, Posta has been struggling to stay afloat. Internet services were recently disconnected at its Huduma centres in Nairobi due to non-payment of bills amounting to Sh85 million.

Nearly all services offered at the facility — which was launched in November 2013 to improve access to basic government services including application for national identity cards, National Social Security Fund services, business permits and driving licences — were disrupted. Posta also recently advertised over 70,000 letter boxes for rent, indicating low uptake of the service even as the firm said it was expanding its national network.

In October last year, Posta said it had about 50,000 idle letter boxes around the country meaning that there has been significant abandonment since then.

“Some are new and some are old… I think we have opened about 10 (post) offices including at Village Market, Karen Hub, Chaka and Two Rivers,” Postmaster-General Dan Kagwe said.

To keep up with e-commerce competition, Posta recently partnered with online merchants Jumia to enable its customers to receive items bought on the website through post offices across the country.