Sweden Post mounts new foray into Australian market
Sweden Post has mounted a new foray into the Australian market by offering small businesses international postal services in a direct challenge to Australia Post's market dominance.
Partial mail deregulation has enabled Posten's local subsidiary Direct Link to consolidate its foothold in the Australian market via a new alliance with MBE Business Service Centres.
MBE Business Service Centres is the Australian outpost of giant American franchise operation Mail Boxes Etc. Direct Link, which has been in Australia since January 2001, had previously only targeted large international mailers.
International mail was deregulated in the 1990s, although Australia Post continues to control most of the domestic market for mail up to 250 grams.
The new alliance enables Direct Link and MBE to tap into the lucrative small-to-medium segment, which had previously been beyond reach of both.
Their new entity, MBE I-Mail, has tailored its products for these companies.
MBE I-Mail's primary market is small-to-medium operators with demand for low-to-medium volume letters and international parcels below 2kg.
Instead of joining post-office queues, I-Mail customers can lodge international mail at any Business Service Centre in Australia and New Zealand.
MBE managing director Mark Jones says the company hopes the greater convenience of its products would woo even more customers.
"We are actively targeting small-to-medium businesses and feel that our biggest draw for them, apart from value, is greater convenience," he says. "Customers can walk into any MBE store and send a prepaid envelope or premium product without having to wait in a long queue at a post office,"
"This is a big advantage, as few business people have time to stand around in a post office."
The envelopes and parcels are then distributed overseas by Posten.
MBE, one of the world's biggest franchises with 4600 global outlets, has 50 stores in Australia's eastern states. Jones hopes customers will also use MBE's other products, including courier services, stationery supplies and computer facilities.
Apart from convenience, Jones says, the I-Mail product offers greater value, with its prepaid envelopes giving a 25g weight advantage over comparable Australia Post products.
Jones says the alliance with Direct Link offers both companies substantial advantages in terms of customer fit and synergies.
"It's good for both of us as we already have an established customer base that we're looking to grow and they have an existing international mail capacity," he says.
Direct Link general manager Kimble George says the alliance with MBE gives the company a unique opportunity to tap into the small sector.
"There has been no financial venture between us: basically MBE is a customer of ours, and we have put together a unique product that works only with MBE," he says.
"In 2001 we entered the local market to target the really big international mailers," he says.
"It's a hugely competitive market and there's no way we had the resources or distribution networks to pick up and accommodate the small-to-medium companies. So MBE's locations coupled with their other services and existing customer base provides us with a unique opportunity to tap into that smaller market."
Both George and Jones acknowledge that the only immediate impediment to growth is the number of MBE shop fronts.
"The amount of business we generate is largely restricted by the number of outlets MBE has," George says. "But we have very high expectations of growth. Clearly the more outlets they have, the more potential there is for volume. So it's in everyone's interests that the business grows."
An Australia Post spokesman welcomed increased competition, but added that it already had a large range of services that were highly valued by its existing customer base.
