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Postal metamorphosis

September 17, 2015

Post-Expo 2015 conference speaker Dr Judit Burucs, director of strategy and risk management, Magyar Posta (Hungarian Post), provides a brief insight into some of the key elements involved in modernizing the Hungarian postal service.

How has Magyar Posta performed over the last year in terms of profit or loss?
Magyar Posta closed the last two years with a stable profit in spite of the changing market environment. In 2014, its revenue from domestic and international letter-mail activity was up 1.5% year-on-year despite the downward trend in quantity. Its sales revenue from parcel logistics services was 15% higher than the previous year’s revenue results and the volume of parcels achieved a record high of 13.3 million.

What is the most important business segment for Magyar Posta?
Most of the company’s revenue originates from the letter market and postal financial businesses, but the role of the financial product and parcel markets is also extremely important. In addition to these, Magyar Posta is present in other business areas such as retail trade, printing services and newspaper distribution. 

How has the postal market changed in recent years?
Magyar Posta has faced the same challenges as other operators in the postal sector: declining turnover in the letter mail market, changing consumer habits, the emergence of substitute services, and the postal market liberalization in 2013. In order to retain its earning ability, Magyar Posta has devised a new business model based on three pillars. Firstly, to compensate for the eroding traditional postal market, the company is making acquisitions and forging strategic partnerships to appear in new areas where the synergy derived from utilizing its existing infrastructure represents a competitive advantage. Secondly, new services are continually developed to cater for customer needs. Thirdly, the company is protecting its traditional postal market positions by introducing cheaper and more efficient technology and extending access to services.

When did the new business model take effect?
Following the change in management in 2013, the company’s top managers adopted this business model in the same year. Since then Magyar Posta has achieved significant results in numerous business areas. New services have been introduced and modern solutions have appeared to complement basic services. A new tracking system has been devised in the area of parcel logistics, and new financial and payment services have been introduced. These are now accessible through automated terminals and Magyar Posta’s mobile application.

How successful has this been so far?
Thanks to the development of its core activities – that is financial, logistics and letter services – and its successful acquisitions, the Magyar Posta Group has continued to grow. The greatest results include the foundation and market entry of the investment company Magyar Posta Befektetési; the newly introduced customer service function for national utility provider ENKSZ; and over 10% annual growth in the parcel business.

How have you tried to improve efficiency in the traditional mail sector, and what technology has Magyar Posta invested in?
In 2014 Magyar Posta installed a new letter sorting machine line that uses state-of-the-art technology to enable an average of three million letters to be sorted efficiently each day. It also allows for the introduction of the most modern correspondence services in the future. Magyar Posta’s fleet of 3,000 vehicles have been equipped with GPS over the last year, which aids the creation of an effective postal route system.

What new services has Magyar Posta launched recently to meet new customer demand?
Magyar Posta developed its postal mobile application in 2014. The application’s many functions include parcel tracking, finding the nearest post office, and a letter and parcel postage calculator. It also features the iCsekk application, which enables customers to settle their bill payments anywhere at any time by reading the QR code printed on the physical payment form.

Another major milestone in 2014 was that Magyar Posta was the first in the Hungarian market to install a parcel terminal network, which allows parcels to be dispatched and collected 24 hours a day. The use of the network is growing dynamically.

What new markets has Magyar Posta entered?
Thanks to a 2013 acquisition, Magyar Posta became the owner of the country’s market leading printing company producing personalized mail items. As a result of the consolidation of the new and previously existing printing capacities, Magyar Posta’s current capacity is one of the largest with the latest technology also at a regional level.

Another acquisition in 2013 meant that Magyar Posta acquired ownership in a service provider company carrying out the most significant e-billing activity in the Hungarian market.

Magyar Posta’s strategic objective, in addition to modernizing its postal financial services, is to expand its portfolio as a financial service provider. To this end, it obtained a share in the FHB Kereskedelmi Bank (FHB Commercial Bank). Thanks to the acquisition, a growing number of financial products are now available in the postal network. Apart from a current account service and the mediation of consumer credits, a broad range of savings products, from simple deposit products to investment funds, are on offer in Magyar Posta’s network.

What do the next few years hold for Magyar Posta?
It will continue on the course it has set out on, presenting itself as a renewed, 21st century postal operator thanks to the outlined developments. Customer feedback verifies that a major change of rhythm and approach has taken place at the company. The results not only reflect the company’s performance but also our joint and successful cooperation with customers, partners and strategic allies.

Post-Expo 2015 takes place at Porte de Versailles, Paris, on September 29-October 1, 2015.

September 17, 2015

 

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