To be able to address the needs of their online clients, these courier service companies have invested millions of euros in equipment to allow them to track packages and faster transfer of the cash paid by customers on delivery.
The latest online commerce project, the supermarket carrying more than 7,500 products (from meat and vegetables to detergents) opened by Romania’s largest online retailer eMag and Mega Image store chain, could generate additional revenue for FAN Courier, the largest Romanian-held courier service company, which will handle delivery of the products.
“Who would have thought seven or eight years ago that Romanians would be buying their fridge off the Internet? We are now delivering all sorts of products purchased online. I think the online food market will develop now, too,” said Adrian Mihai, one of the owners of FAN Courier.
The company makes almost EUR20 million revenue from delivering orders for online stores alone.
The company has invested more than EUR2 million in technology to support its business with Internet retailers.
“Online retailers want quick delivery in 24 hours, want to get the money fast that courier picked up from the customer and safe delivery, that is have the merchandise get to its destination undamaged,” he added.
All the company’s couriers were issued mobile printers (Intermec PR3), which output a receipt once the customer has paid, so they no longer have to write the receipt by hand.
“By the time the courier is back at the headquarters we have already centralized all payments made and the next day we put the money into the accounts of online retailers. With these printers we can make payments to online retailers faster,” he added.
The company also invested in GPS and AWB Tracking systems, to allow customers to track their orders.
FAN Courier is currently delivering about 20,000 parcels for online retailers every day.
The local online commerce market estimated at about EUR1 billion in 2013 has the highest growth potential in the region, considering the many industries that have not developed online yet, and considering only 20% of the 10 million Internet users in the Romania actually buy something on e-commerce sites.
FAN Courier’s clients include Carrefour Online, eMag, Mega Image, PC Garage and other companies. Back in 2008, online retail accounted for only 5% of FAN Courier’s revenue, but the segment surged during the crisis.
Online retailers generate about 40% of the business of another courier service company, DPD Romania, which ended last year with 64.8 million lei (EUR14.8 million) revenue, up 43% year-on-year. Lucian Aldescu, chief executive officer of DPD Romania, said in March that the development of electronic commerce was a major factor in the company’s growth.
Urgent Curier, recently acquired by private equity firm Abris Capital, gets 20% to 30% of its revenue from partnerships with online retailers, according to the latest statements of its representatives.
Electronic commerce generates a significant part of the revenue of courier service company Cargus, too.
“Online orders account for 30% of Cargus’ revenue so far. Compared with the same time of 2013 (first half i.e.), Cargus posted growth of 100%,” said Nadia Homoc, commercial director of Cargus.
“Online retailers have already become a significant part of the courier service business. As this business segment developed, courier service companies started to constantly develop personalized services and solutions. They need to offer both e-commerce companies and customers as many delivery and payment options as possible.”
Online retailers contributed to the growth of the courier service market to EUR250 million in 2013 from the EUR200 million in 2012.
(English version by Loredana Fratila-Cristescu)