This document discusses changing communication, purchase, and postal habits due to increased internet usage and e-commerce. It notes that internet penetration in Central and Eastern Europe now matches the EU average, with most purchases occurring online. A case study examines a German mail order company entering the Romanian market by distributing catalogs and fulfilling orders through Hungary's postal service. Key challenges included incorrect addresses and high return rates. The presentation concludes that communication is no longer just mail, and postal services must cooperate across borders to reliably support e-commerce.

1. CEE and CEE
(Communication E-commerce E-customer and CEE)
SEF on Parcel IPC, October 26-27, 2010
Levente Laszlo, Magyar Posta

2. Changing of communication habits
Changing of purchase habits
Changing of postal business
Case Study – cross-border e-commerce

3. 1998 – internet penetration on the world

4. 2008 - internet penetration on the world

5. 2010.10.26 (14:59) e-commerce = 449 billion EURO
World e-retail spend 2009 = 485,4 billion EUR

6. Changing of communication habits
DO YOU KNOW
YOUR CUSTOMERS
COMMUNICATION
HABITS ?

7. CEE EU-countries market size (inhabitants)
COUNTRY POPULATION
An average of 60-75% of the
population is living in urban Bulgaria 7’700’000
areas - except Romania, where Czech Republic 10’200’000
the partition lies by 50%
Hungary 10’000’000
Poland 38’200’000
Romania 21’700’000
Slovakia 5’400’000
Slovenia 1’990’000
TOTAL 95’190’000
source: Study from PriceWaterHouseCooper, 2008

8. 2009 - Internet penetration and users in CEE
Internet penetration
Internet penetration (average)
reached the EU average in
most of the CEE countries.
Penetration is above 80% in
the TOP 20 cities (60% of
inhabitants)
Internet users
Internet users vary between
10 – 40 million inhabitants on
country
Increase of internet users is
accelerating – average
increase is about 30%
Source: Gemius, CEE internet 2010

9. 2009 – Internet broadband penetration CEE
Broadband penetration
There is still a difference in broadband penetration among the European
countries
- 37% (average) Western Europe
- 11% (average) CEE
Source: Gemius, CEE internet, 2010

10. Changing of communication habits the real problem
Booming of social media ->
Facebook, Twitter, YouTube,
LinkedIn, Xing
Traditional letter mail is no
longer sexy for the young
generation
How to remain attractive ?

11. Changing of purchase habits
DO YOU KNOW
YOUR CUSTOMERS
PURCHASE
HABITS ?

12. Multi-taskers – change of buyers habits
Multi-taskers: those who use / access the Internet whilst also watching TV , listening to music, speaking on phone
TOP multi-taskers
77% Denmark and UK
73% Germany
71% Belgium
Source: Media Meshing: Meet Europe’s media multi-taskers, 2010

13. What are multi-taskers doing ?
34% of Internet users
are searching a product
with purchasing
intention
Source: Media Meshing: Meet Europe’s media multi-taskers, 2010

14. Where are the purchases realized ?
Purchase-driving effect of a
TV and internet/mobile Ads.
Two in three say that
Internet ads have driven
them to make an on-line
purchase
Source: Media Meshing: Meet Europe’s media multi-taskers, 2010

15. Be consumer centric (but how ?)
The 21st
century
consumer is
changing its
purchase
habits!

16. Changing of postal business
YOUR CUSTOMER IS
CHANGING - ARE
YOU FOLLOWING
HIS NEW HABITS ?

17. European Parcel market 2016 volume of B2C
Total market: 3.1 b parcels, EUR 8–11b by 2016
Source: TNT, 2009

18. The Hungarian on-line market 2001 - 2010
The Hungarian on-line market is estimated to reach by the end
of 2010, EUR 450 million (+35%)

19. The Hungarian on-line buyers profile
55% of the on-line
buyers are males – with
21% more than the
females.
By 2012 male vs. female
will be 50-50%
12% = 1,075,000
Hungarian citizens
above 12 years have
purchased goods in the
last 12 month on the
internet

20. Average value of a purchase order (2009, Hungary)
The average purchase order in 2009 was of HUF 11,000 (EUR 40,- )
25000
20000
15000
10000
5000
0
2003 2004 2005 2006 2007 2008 2009 2010
exclusive on-line traditional webshop average purchase order

21. Reasons for shopping from home (Hungary)
Future shoppings will 49% - save time
increase by 1,3 times 37% - less expensive
Source: GKIeNet., Hungary 2009
Source: Gemius, Hungary 2009

22. Reasons for shopping from abroad (EU vs Hungary)
Convenience and lower price is the main reason for online shopping
35% see home delivery as important reason to shop online
less expensive abroad 64%
domestic not available 55%
higher product quality 16%
no large product portfolio 13%
no reason 2%
easier to order 1%
not know 2%
Source: GKIeNet., Hungary 2009
Source: Websurvey France, 2008

23. Case study – cross border e-commerce
FROM ABROAD TO
CEE VIA BUDAPEST
.

24. Classical mail order company assisted by Magyar Posta
The business model
Germany based mail order company is entering on the
Romanian market with the purpose of selling goods
The services offered
Local distribution of unaddressed items (flyers)
Local distribution of addressed items (catalogues and DM)
Local distribution of parcel with COD
Cash collection + bank transfer of collected cash
Return logistics management (RLM)
Postal payment services linked to the returns
The contractual parties
Mail order company and Magyar Posta

25. Conditions of the business model
Sales channels used by the distance seller
Flyers, DM and Catalogues incl. order forms
Call center (telephone order)
Home page
Bank account opened at a local bank
Return management
Normal returns are managed by the subcontractor / distribuitor
Reverse Logistics Management (RLM) by the local postal operator (DO)
Payment of the returned goods is managed by the DO
PO Boxes
Letter mail items
RLM

26. The procedure
Managing the physical and digital flows
Distance Receiving Delivering End
Seller Post operator Customer
xml file
Transfer
report
Explanation: Main features of the process:
->24-48 h before delivery distance seller -cash collection done by the subcontractor
is sending a pre-advice (xml-file) -collected cash transferred on the domestic
->Magyar Posta is processing xml-file bank account opened by the distance
seller at local bank
->Magyar Posta is over-labeling the items
- Transfer report sent to distance seller

27. The xml-file
The content of the xml-file may vary from case-to-case
<sorszam> 1
<azonosito> CU1005NI0033508152510008990
<alapszolg> A_173_EKP
<iranyitoszam> 525100 | Covasna
<suly> 370
<tobb_kuld> 1
<kulonszolgok> K_UVT,K_ORZ
<uv_osszeg> 89.90
<eny_osszeg> 0
<kezelesi_mod> 2
<alapdij> 9.45
<tobbletdij> 0.50
<címzett> MARIA-GYOPARKA BENKO
<cimzett_hely> Baraolt
<cimzett_ertcsat> 0745163465
<cimzett_ertcim> bgyoparka@yahoo.com
<orz_ido> 5
<díj> 9.95
<kozelebbi_cim> KOSSUTH LAJOS | 249 | BL / ANL AP / 2
<megjegyzes>
<ugyfadat1> 56201419
<ugyfadat2> 2187754
Before the handover at Budapest OE of the parcel (shipment) the
electronic xml-file is sent (48 hours)
Based on the xml-file the parcel are over-labeled
The xml-file contains all the necessary details incl. COD amount

28. Critical problems encountered
Main Reasons on Return Parcels Total
Wrong address 570
consignee not responding after being notified three times 547
refused by consignee 4748
Total 5865
No reliable local databases => GIS (geomarketing solutions)
Wrong / incorrect addresses => correct addressing
Insufficient data collection on the home-page => corrections
Customer habits: ordering on-line (not from catalogues)
Uncert customers ordering products with COD = no responses
about their orders
Too long processing time from the order to the delivery causes
refuses at delivery

29. Next steps
Improving the digital process (database, tracking, reporting)
Magyar Posta = sending e-mail messages to the recipients tracking
the events -> leaving the warehouse; leaving Budapest HUB;
entering into Romanian HUB
Subcontractor = sending SMS to the recipients for higher
distribution rates
FTP-server server based automatic (2x daily) tracking
communication
Database procedure based on html surface instead of e-mail

30. Conclusions
Communication is not a letter mail anymore
„E-shopping” is different type of postal business
Cooperation and alliances for reliable „e-shopping” services
-> developing cross border solutions
-> targeting the buyers
„Last mile” delivery staff can be „first mile”
sales force by identifying the „e-customers”
Be prepared -> future is here !

31. Alternative future of communication ?

32. Thank you for your kind attention !
Please feel free to contact us
e-mail: sales.international@posta.hu