Mailpac acquisition talks back on, doubles down on other strategic initiatives
Courier company Mailpac Group Limited is doubling down on e-commerce and other initiatives to grow its customers base both locally and overseas next year, despite a falloff in its earnings since the reopening of the economy.
The dips experienced in parts of 2021 and 2022 have not shaken Executive Chairman Khary Robinson’s optimism to land more business in the e-commerce market, which over time has become increasingly crowded.
Mailpac is also revisiting acquisition talks it had opened in 2020 but placed on hold due to the economic downturn under the pandemic.
“The truth is that we expected a short-term falloff in online shopping as the economy rebounded from the pandemic. Consumers that were curtailed by limited travel responded with higher-than-normal travel and in-store shopping experience as predicted. That’s what we call the rebound effects,” Robinson said during the company’s annual general meeting held online on Tuesday.
“However, we are already seeing a steady return in the level of consumer spending online,” he added.
For the second quarter ending June, the e-commerce and courier company reported earnings of $82 million, reflecting a 14 per cent decline in profit year on year. Revenue also dropped by 4.4 per cent to $408 million, making it the second consecutive quarter of decline in both revenue and profit for the company.
Still, the performance was more encouraging than Mailpac’s first-quarter performance, during which revenues had fallen 15 per cent to $398 million.
To capitalise on the resurgence of online shopping, Mailpac is looking to launch new services.
“By mid-2023, we expect Mailpac to be a provider of meaningfully different e-commerce solutions throughout the region,” Robinson said.
The company will be coming to market with a digital ‘pack yu barrel’ shipping service to Jamaica, launch of a new logistics brand, tailored for time and cost-conscious online shoppers, roll out the Mailpac marketplace app in an attempt to woo customers keen on knowing exactly how much they will pay for products shipped to Jamaica.
“We are also looking to expanding pick-up delivery options for consumers across the island. These advancements along with many more to come will ensure that Mailpac Group continues to lead the ever-growing online shopping market in Jamaica as well as sets the foundation for us becoming a regional or international player,” Robinson said.
He also reported that Mailpac was back in talks with previous acquisition targets, as well as new prospects that were identified during this year.
Mailpac Group invested last year in the acquisition of five new vehicles, the addition of a virtual aisle-browsing feature to its online platform, pumped some $30 million into the start-up of Mailpac Local Grocery Store, an online shopping site that markets itself as securing goods for retail customers at prices usually reserved for large-scale distributors.
The company has since rolled out marketing campaigns to bring traffic to the website.
However, plans to roll out new lockers as well as the buildout of five new stores across Jamaica to expand the international and domestic courier side of the business are still in progress.
Mailpac now operates 14 locations nationwide, one of which was added since the company’s announcement last year that it would be investing $40 million in the buildout of additional stores and lockers.