International mail revenue is poised for a 3-year CAGR of 11.4 per cent. While domestic mail revenue has largely plateaued over the years in the face of digital disruption, SingPost’s postal segment remained well-supported by growth in international mail revenue, says UOB KayHian.
The research firm noted that the positive performance of domestic mail revenue was largely driven by higher outbound volumes from Alibaba. According to UOBKayHian, as an indication of scale, in its latest financials release, Alibaba’s international sales increased 123 per cent yoy to Rmb1.1b in the period of Apr to Jun 2016, and it is expected to grow as Alibaba looks to increase overseas e-commerce revenue to 50 per cent.
Meanwhile, the research firm expects international mail volumes in 3QFY17 to be seasonally higher, as SingPost gears up for events along the likes of Singles’ Day, Cyber Monday and Black Friday.