Singapore Post (SingPost) has inked a partnership agreement with Synagie to offer cloud-based warehousing and fulfilment services aimed at small and midsize businesses (SMBs) in Singapore and Southeast Asia. The on-demand offerings are touted to enable these companies to tap integrated warehousing systems on a pay-as-you-use basis, eliminating the need to set up their own facility.
Available from the third quarter of 2019, the fulfilment services would be delivered by SingPost's e-commerce logistics subsidiary Quantium Solutions and run on Synagie's cloud platform, the companies said in a joint statement Wednesday.
Pointing to research from Temasek Holdings and Google, SingPost said the Southeast Asian internet economy was projected to be worth US$200 billion by 2025, up from US$50 billion in 2017, with growth fuelled by e-commerce, media, travel, and ride-hailing.
The new partnership would allow SMBs to tap growing e-commerce transaction volumes in the region while accessing "enterprise-grade logistics capabilities", SingPost and Synagie said. "[It] provides on-demand warehousing [that] allows brands and SMBs to save on the heavy upfront capital expenditure required to set up or operate their own warehouse, as they are able to acquire integrated warehousing services on a pay-as-you-use basis without long-term commitments," they said.
They added that the new service would help these businesses meet spikes in warehousing demands during peak seasons, such as sales events, and better manage their inventory.
The partnership announcement comes shortly after SingPost unveiled it was exiting the US market, following a disappointing e-commerce showing there. In its latest full year earnings, the Singapore postal services operator reported an 86 percent dip in net profit and said it was putting up its US businesses for sale.
Instead, it was focusing its strategy on Southeast Asia and Asia-Pacific, which it said provided better returns on investments and growth opportunities.
Citing "intensifying competitive and cost pressures" and increased customer bankruptcies in the US market, SingPost said its e-commerce revenue dropped 0.3 percent for the year, ended March 31. It said it incurred an impairment of S$98.7 million (US$72.13 million) from its US businesses, TradeGlobal and Jagged Peak, and was expecting ongoing operating losses until it finalised its exit from the market.
Its logistics business reported a 0.3 per cent dip in revenue for the year.
SingPost Group CEO Paul Coutts said in the statement on May 7: "Despite our best efforts in turning the US business around, we faced increasingly intense challenges that impacted our performance. As a result, we made the difficult decision to commence the sale process for our US e-commerce business.
"We remain committed to our e-commerce business, as it remains a key part of our strategy towards future financial growth," Coutts said. "The group's competitive advantage lies in Asia-Pacific where we are seeing the strongest growth in volumes and yields, and we will continue to refine our businesses to leverage the growth. In the immediate term, we continue to focus on improving our operations in Singapore to better serve the needs of customers in our home market."
SingPost opens $130M e-commerce logistics facility
Touting the new hub as its "biggest e-commerce logistics investment" so far, Singapore Post says the S$182 million (US$130.85 million) site can process up to 100,000 parcels a day.
SingPost packs in another $206M investment from Alibaba
China's Alibaba Group increases its stake and investments in SingPost with an additional US$206.45 million, as it looks to drive the development of e-commerce infrastructure and services in the region.
China tech giants to fight for $53B SEA e-commerce market
Estimated to be worth US$53 billion by 2023, the Southeast Asian online retail market is the emerging battleground for Chinese tech giants--Alibaba, Baidu, Didi, JD.com, and Tencent--which have been investing aggressively in the region.
SEA internet economy to hit 'inflection' value of $72B in 2018
Southeast Asian internet economy will be worth US$72 billion by year-end, fuelled by increasing number of mobile users and high-growth markets such as e-commerce and ride-hailing, reveals annual Google-Temasek study.
'Smart logistics' to feature in Singapore's upcoming ICT masterplan
With the country's next ICT blueprint to be announced later this year, the Singapore government reiterates its smart nation push at this year's imbX show and unveils efforts to make data intelligence more accessible to the logistics industry.