SingPost

SingPost: (S$1.81) Doubles down on e-commerce as it fashions its wings of growth

Taking a step further to realise its aspirations of building a full value chain for its e-commerce logistics network and technology platform, SingPost is acquiring a 71.1% stake in Jagged Peak for US$15.8m.

Jagged Peak is a US e-commerce logistics enabler for high-velocity consumer products and will help SingPost with end-to-end fulfilment of orders across the US.

The acquisition is its first foray into the US and is part of its strategy to focus its resources on strengthening its geographical reach and the technology. SingPost has already spent about $181m on acquisitions in the past year.

With this strategy, SingPost hopes to tap into the growing B2C e-commerce market in the Asia Pacific region. According to eMarketer, that market could grow 34% to US$675b in 2016.

Already, SingPost is making headway in its e-commerce-related businesses, with revenue contributions growing 19% to $257.2m in FY14/15.

Should SingPost keep pace with the growth rate of the Asia Pacific e-commerce market as projected by Forrester/ Transport Intelligence, revenue could expand a further 20.5% to $309.93m in FY15/16.

This would imply that the e-commerce segment would effectively contribute about one-third of 33.7% of FY14/15 revenue.

Acquisitions could also gather pace given SingPost's $566m cash war chest as at the end of Jun.

With second largest shareholder, Alibaba boosting its e-commerce credentials, SingPost could very well take on the mantle of a promising regional player in the near future when deliveries attain a critical mass. By then, SingPost’s e-commerce ecosystem would potentially explode in terms of demand