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SingPost - an Asian case study of corporate reinvention
THE US$169 million acquisition of 96.3 per cent of US e-commerce provider TradeGlobal by Singapore Post (SingPost) marks yet another move by an "old-economy" company to stay relevant and build itself a "new-economy" platform.
This comes just days after SingPost announced that an indirect wholly owned unit had entered into a US$16 million deal to buy a 71.1 per cent stake in Jagged Peak Inc, a US e-commerce networking platform dealing in high-velocity consumer products.
SingPost said its e-commerce footprint comprising its best of breed technology platforms and fulfilment service network will then be global, linking the continents of Asia, Australia, continental North America and Europe. The platform positioned SingPost for the anticipated spike in online transactions.
As chif executive Wolfgang Baier put it last week, that acquisition was done to "connect the dots" and elevate SingPost's e-commerce logistics network to a global status.
Indeed, SingPost - first set up to deliver what is now known as "snail mail" - seems to have strategically and smartly embraced the mantra of transformation to stay relevant, and stay alive. And that transformation has taken it along the route of technological innovation and improvisation, with e-commerce at its centre.
SingPost's transformation into an e-commerce logistics player probably started about six years ago when it bought a 50 per cent stake in G3 Worldwide Aspace, a move which immediately gave it a logistics footprint in 10 Asia-Pacific countries. Now known as Quantium Solutions, it has operations in 45 cities across Asia and the Pacific.
Two years later, in 2011, it boosted its stake in Malaysian logistics player GDEX to 27 per cent.
Earlier this year, it invested some S$224 million to expand its regional network via its new Regional e-Commerce Logistics Hub, additional POPStations parcel stations, and a new mail sorting equipment to improve service quality at its Singapore home-base.
And just days ago, SingPost announced that it had started experimenting with delivery of mail and parcels via drones.
Along the way, SingPost has also tied up with Changi ground handling specialist SATS, invested in a Dutch player providing information and communications technology services at Rotterdam harbour, bought into self-storage companies, and in the process, attracted the interest of B-to-B giant Alibaba.com.
All this is quite a transformation for a company which had been largely written off by many market watchers less than a decade ago as being an old economy business which would ultimately be washed away by a tidal wave of technology and new economy players.
Who uses the post office anymore, the argument went.
Well, obviously anyone doing anything from renewing passports, to paying fines, buying insurance, getting a loan, mailing parcels or connected in anyway to e-commerce would. The remodelling of its traditional business has turned SingPost into a conduit for goods and services way beyond letters and parcels.
While analysts are still trying to drill down into how exactly the latest move will benefit SingPost, the Singapore-listed company nevertheless provides a fascinating case study on corporate survivability and growth.
As corporate marketing strategist Brian Woolf of Retail Strategy Centre noted in a report published earlier this year, most businesses have a "sell-by" date.
New technological innovations, loss of first mover advantage and an excessive obsession with numbers (rather than growing the business and focusing on the customer) have often seen most companies being "overtaken or taken out".
In the US, he found the average lifespan of companies to be about 30 years.
About 20 years ago, a study published in BT found that many Singapore startups hit the skids somewhere after the fifth year. And many fail to thrive and survive beyond the demise of their founders.
Even for the most successful companies, competitive advantages can quickly be neutralised by quantum leaps in technology. Meanwhile, mimicry is the highest form of flattery, but it can also be the starting point for the narrowing of differences between the leader and its competitors. Just ask Singapore Airlines.
But SingPost seems determined to keep ahead by riding new platforms and investing in new ways of doing business. If there ever was an Asian case study of corporate reinvention, this surely must be it.