Singpost's deal with Alibaba to boost international mail

It could grow at 11.4 CAGR through 2019.

SingPost' international mail revenue is projected to grow at a three-year CAGR of 11.4% in FY17-19 as it is expected to benefit from Alibaba's extended Singles Day promotion sale, said UOBKayHian.

SingPost recently announced it completed its joint venture agreement with Alibaba, where Alibaba invested S$86.2m for a 34% stake in QSI. QSI will essentially serve as a common platform for the two entities to grow and enhance e-commerce logistics capabilities in Southeast Asia and Oceania. The collaboration is said to concentrate on solidifying QSI's end-to-end e-commerce logistics network, and developing scale for future profitability.

Meanwhile, Alibaba has expanded its annual promotions for Singles Day to 24 days, instead of the usual 24 hours. This year, Alibaba expects to surpass the record S$14.3b in sales on
Singles' Day in 2015 through rolling out new activities like virtual fashion shows as well as augmented reality games to entice shoppers.

UOBKayHian believes this new “extended holiday” may allow Alibaba to capture a bigger share of the wallet, which in turn may translate to higher international volumes for SingPost.

The research house also anticipates international mail volumes in 3QFY17 to be seasonally higher as SingPost gears up for events with the likes of Cyber Monday, Black Friday and Singles Day.

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