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If e-commerce is booming in Zim, who’s delivering the packages?

In the sector performance report released by POTRAZ for Q3 2021, we found out that postal and courier services are still on the recovery path. Total volumes pushed fell dramatically in Q2 2020 when the pandemic hit but have been increasing every quarter since that terrible Q2 2020. 

We are still aways from the pre pandemic volumes but it’s encouraging to see the upward trend. However, I can’t help but feel the drop we saw should not have been that steep. There is an opportunity somewhere that just wasn’t being taken advantage of.

Who’s sending physical letters?

When the drop was witnessed in Q2 2020, POTRAZ had this to say about the reason:

Postal and courier volumes declined significantly as people and businesses resorted to sending documents electronically.

I know some may be surprised that the sending of letters and documents was and still is that important to the postal and courier industry. Who is sending physical letters when they can email them or even WhatsApp them? 

Well, I worked for a govt organisation once and my gosh did we send physical documents. When the pandemic hit, some reports had to be submitted electronically. I kid you not when I tell you that there was massive resistance to that change. 

However, there are documents that cannot be sent electronically and so the posting of physical documents won’t die completely. Even private businesses still send a lot of documents. We expect that in time, we’ll see more packages sent than documents though.

For now, 51% of the 732,303 items shipped in Q3 2021 were domestic postal letters. So over half of the items sent were letters and that’s not ideal.

The gold is in international courier

The deal is, the heavier the package, the more costly it is to send it. So, it is no surprise that the sending of packages results in greater revenue than the sending of letters. It is also then obvious that the sending and receiving of heavier packages to and from outside the country is most important for postal and courier service providers.

Disturbances in global trade, lockdowns and the closing of international borders affected this industry. However, the situation is improving and the all important international courier volumes are recovering.

From Q2 2021 to Q3, international incoming courier volumes increased by 5.1% whilst international outgoing volumes increased by 86.5%.

Domestic courier and e-commerce

This part is where the disappointing bit is. When we look at postal and courier service providers in other countries, we see that an uptick in domestic courier volumes more than offset the decrease in international courier when the pandemic hit. 

So when we saw an 83% drop in total volumes shipped in Zimbabwe, in some countries, courier service providers were hitting all time highs in share prices. All thanks to e-commerce driven growth in domestic courier volumes.

On the surface, it does appear as if e-commerce in Zimbabwe did not shine when lockdowns and movement restrictions were effected for the masses. If anything was going to jumpstart ecommerce, the movement restrictions in the past 2 years were that. The fact that the number of packages sent fell dramatically is worrisome. 

We found out in the Zimstat survey that 34% of Zimbabweans are simply not interested in e-commerce. 46% said they prefer shopping in-person, even with the risk of contracting the virus in supermarket queues. 

Small courier service providers

I do feel that the figures captured by POTRAZ omit a lot of small domestic courier service providers. 

By now, we can all agree that there is significant e-commerce business via social media platforms in Zimbabwe. The crazy thing is that most of the sellers on these platforms do offer delivery services. However, they are not working with the courier service providers that would be on POTRAZ’s radar. 

On his motorbike, Mkoma Willie makes deliveries on behalf of a number of sole traders. These deliveries are not captured by the POTRAZ machine. Meaning the actual domestic courier volumes are higher than the 123,695 recorded in Q3 2021. 

That being said, it is nice to see that the captured domestic courier volumes increased by 19.7%

Total revenues

 All the volume increases discussed above resulted in a 31.7% increase in revenues. As if that wasn’t good enough, operating costs increased by only 8.5%. That is impressive in this harsh Zimbabwean economy. You will see how mobile network operators could not contain their operating costs as well here.

In closing

I wonder how the domestic courier services space is going to look like in a few years. I would argue that e-commerce is actually becoming more commonplace in urban areas. It’s just that Zimbabwe’s version of e-commerce is a bit different from the American one for example.

With many small businesses either working with small courier service providers or actually delivering themselves, we shall see if the established and known upcoming players will be able to make inroads there.

The international market will never be the same after the pandemic. So, domestic courier is going to increase in importance. Tariff wars, trade wars and closed borders have not crippled couriers in other countries because of domestic courier increases. Instead, they have actually thrived. That has to be the case in Zimbabwe.

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10 thoughts on “If e-commerce is booming in Zim, who’s delivering the packages?

  1. I am looking for William Chui. I need his contact details. I need his advice on what i should do if I’m interested in Tech and Programming but I’ll be a form 4 student next year and i dont want to go to A Level. What should i do? Which career path is the right one? I need to know the jobs that are tech related which pay good money.

    1. Hi there,

      I’m humbled that you want to ask plain Ol me about such, but I’m found more on than around these streets. You can reach out to me directly on Twitter where I’ll share my direct contact details with you: @MrWilliamChui

      While I’m here, lemme try to answer your questions:
      1. I’m not sure how many subjects you have on your plate and how confident you are in writing them. If you’re sure you can balance the two, I don’t see why you shouldn’t start learning now, YouTube is your friend.
      2. Not wanting to go to A’Level is something that you would need to check if whether you career path don’t require that you have A’Level. Maybe look for a family member or friend who’s gone down the road that you want to and ask whether you’d need A’Level. I know the University of YouTube doesn’t care much about that, but, YouTube is not for everyone as it requires dedication and discipline.
      3. School is meant to make you think better, give you a better understanding of logic. Reading and being more curious will greatly help you in this regard. There’s also the networking factor, so if you don’t decide to go make sure you try and compensate by broadening your network. Church Youth groups, football clubs, chess, darts, racing, etc (yeah, yeah, I know a lot of this stuff is ore-Covid, but try to get the jest of it).
      4. As for career path, the right one is ‘knitting’!!!! I always tell people who ask me this that they should get into knitting! Yeah I know you might think it crazy, but I’m just trying show you that it’s relative, it depends. What makes you happy, what will you do without getting paid for? What can you excel in in your community/city/country? The real answer to this is ‘it depends’. What’s the right one for me, may not be the right one for you. Right now my goal is to be a ‘house husband’, I think that’s the right job for me, I don’t know if this is the right one for you. You’re still young, probably need to explore the world more and be exposed to stuff, so I’d say look for something that ticks those boxes.
      5. Tech related jobs that pay good money, hmmmm. Never do it for the money, create some other check list, have money on there, but money shouldn’t be your chief factor. What if I told you the porn industry is paying, would you want to delve into that, I certainly wouldn’t recommend it. Do something where if the money does not come day 1 you’re still happy to do it on day 100. Yes, you might not have the privilege of a family support system that allows you to pursue your dreams, and you need money on the table sooner rather than later, and this is the paradox we’re in in Zimbabwe.

      In summary, you’re still young, if you’re situation allows explore more and broaden your thinking. Travel, read, watch and listen more. Speak to a lot of people and find out what their experiences were getting to where they are in life.

      All the best on whatever it is you decide, but I’m available to chat further should you see the need

  2. Ahie guys. Just wondering…would it be a good idea to specialize as an e-commerce developer here in Zimbabwe? As a final year computer science student, I feel as though leveraging on the growing e-commerce space in Zim would be a good use of my skills and time. Am I right? Or am I missing something?

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