Bold e-commerce ambitions for SA Post Office amid spiraling debt

• Minister Mondli Gungubele has reaffirmed government's commitment to modernise the role of the South African Post Office.
• He said the South African Post Office would become an "essential e-commerce platform".
• This came a few days after a statement from SAPO's business rescue practitioners on the level of debt the institution has.
• For more stories, visit the Tech and Trends homepage.

Less than a week after business rescue practitioners revealed that the South African Post Office's (SAPO) liabilities exceed R12.5 billion, Communications and Digital Technology Minister Mondli Gungubele used an international platform to say SAPO will become an "essential e-commerce platform" in the country.

Speaking at the Universal Postal Union (UPU) extraordinary congress in Saudi Arabia last week, Gungubele laid out ambitions for the post office.

"We want to create an efficient, integrated logistics and e-commerce service provider, that will play an essential role in providing e-commerce services everywhere, from the advanced commercial centres to our disadvantaged communities. 

"We see the South African Post Office as the national e-commerce aggregator central in the platform economy," he said.

On World Post Day on 9 October, the department shared the minister's remarks on X, the platform formerly known as Twitter.

The tech push for the post office was first conceptualised in the Post Office of Tomorrow plan, which was intended to plan out the way for the post office to reinvent itself. 

Gungubele's recent remarks were in alignment with that plan.

Business rescue

Gungubele's UPU address came a mere six days after a statement from Anoosh Rooplal and Juanito Damons, the joint business rescue practitioners of SAPO, about the R12.5 billion in liabilities on SAPO's balance sheet.

READ MORE | High court gives nod to Post Office's business rescue, staving off liquidation amid R2.4bn bailout

"We have been working with management to address the decline in revenue, generate additional sources of revenue, reduce costs, effect key structural changes in the SAPO business model and consider key investment in technology and infrastructure to drive performance," said Rooplal.

"The success of the SAPO business rescue is predicated on arresting the cash flow bleed whilst also allocating capital to facilitate the company being able to service clients effectively."

Earlier this year, SAPO explained to News24 that the largest portion of its expenditure was its staff bill, which accounted for 68% of expenditure in January.

READ MORE | Post Office to cut salaries, working hours in bid to slash staff costs

The revenue that SAPO has been able to raise has decreased as the demand for traditional postal services has decreased.

The statement from the business rescue practitioners acknowledged that SAPO has been slow to adjust its business model to the "modern state of affairs".

Gungubele added that the post office would look to enter partnerships to diversify its infrastructure.

"We will be looking for partnerships with online retailers and manufacturers, transport, and air freight services, as well as seeking new opportunities to diversify our infrastructure."

He also said SAPO would look to work with SMMEs and multinationals in the e-commerce ecosystem.