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[Herald Interview] Korea Post eyes global markets

State mail service provider to focus on diversification for new growth

This year marks the 130th anniversary of the adoption of modern postal services on the Korean Peninsula and the establishment of the state-run mail service provider Korea Post.

Over the years, technological advancements such as the Internet and smart gadgets have changed the way people and industries communicate and have opened up new transnational business opportunities.

While these changes serve as a grave threat to traditional postal services, they also offer the postal industry a chance to innovate and look for new business areas.

Korea Post has been facing mounting challenges such as the ever-shrinking business in paper mail delivery, and fierce competition with private companies in parcel delivery and shipping.

The chief of the state-run postal agency, however, said it would step up its efforts to export automatic postal systems that utilize information and communication technology to other nations to overcome the current difficulties.
Korea Post president Kim Joon-ho (Korea Post)
Korea Post president Kim Joon-ho (Korea Post)

“Korea Post will expand its global partnerships and increase its export of advanced Korean postal services,” Kim Joon-ho, the president of the state postal agency, told The Korea Herald in a recent interview.

The postal company mainly plays an intermediary role by supporting private companies that export IT solutions and equipment for postal services to other nations.

Around 160 billion won ($154 million) worth of postal software and equipment developed by Korean firms was exported, mainly within the Asia-Pacific region, in 2013.

At Post-Expo Asia 2014, an international fair for the postal services industry held in May in Hong Kong, Korean companies sealed deals worth 47.6 billion won in total, with global post offices to supply a wide variety of postal solutions and devices, including automatic mail sorting systems and personal digital assistants.

“We will also try to bolster partnerships with other nations, including ones in South America and Africa, which want to modernize and advance their postal IT systems,” the Korea Post president said.

Korea Post, meanwhile, has been making efforts to streamline its organization and increase management efficiency in order to counter its prolonged deficit due to decreasing revenues from the mail delivery business and increasing labor costs.

In an effort to overcome these variables and challenges, it has, for instance, established automated postal centers across the country.

It is currently running two automated post offices ― in Gimpo and Hanam in Gyeonggi Province.

“Five more automated postal centers will be built in Korea this year, and Korea Post will incorporate more IT technologies into the current businesses (to boost value for customers),” Kim said.

South Korea’s postal company is also diversifying its revenue sources by launching postal banking services and sales of budget mobile phones in response to the decline of the traditional mailing business. It also runs an insurance business, and makes investments mostly in fixed-income securities for stable returns, as part of its financial operations.

“Korea Post will continually make investments in future-oriented businesses, while focusing more on supporting small and medium-size enterprises to share value and growth,” Kim said.

By Kim Young-won (wone0102@heraldcorp.com)
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