Cross-border e-commerce is growing rapidly at 2x the rate of domestic e-commerce. New technology-driven startups are disrupting the traditional competitive advantages of postal players in cross-border delivery. Customers now expect fast, free, and easy cross-border delivery services that match domestic delivery standards. To compete, postal organizations will need new business models and capabilities.

1. CROSSBORDER
THEDISRUPTIVE
FRONTIER
Accenture Post and Parcel
Industry Research 2019

2. Copyright © 2019 Accenture. All rights reserved. 2
Cross-border growth is 2x the rate of domestic
eCommerce, but the ability to control market share
is declining. New technology-driven start-ups,
pricing and innovative supply chains are stealing
a march on postal players’ competitive edge.
Customers expect cross-border delivery to match
domestic services: fast, free, trackable,
and easy returns.
To compete, new business models and
capabilities are required. Five actions
can help postal organizations win in
the cross-border delivery race.
THE CROSS-BORDER STORY

3. GROWTH GAINS MOMENTUM
Copyright © 2019 Accenture. All rights reserved.
CROSS-BORDER ECOMMERCE IS THE NEW NORMAL
Cross border is growing at 2X
the rate of domestic eCommerce29% CAGR
Cross border represents 20% of global eCommerce
75%
of UK online
shoppers buy from
overseas retailers
and marketplaces
of Dutch
eCommerce
consumers buy
from abroad
of German
eCommerce
consumers buy
from abroad
of Irish consumers buy
from abroad; the
highest number of
international online
shoppers in the world
of Nordic
eCommerce
consumers buy
from abroad
63% 62% 84%83%
3

4. SMALL SHIPMENTS RULE
Copyright © 2019 Accenture. All rights reserved. 4
CROSS BORDER IS MAINLY LIGHTWEIGHT ITEMS
Don’t know
0.2 - 0.5 kg
> 5.0 kg
0.6 - 1.0 kg
< 0.2 kg
1.1 - 2.0 kg
2.1 - 5.0 kg
Weight of most recent cross-border purchase
[Kg; % of respondents]
Source: “Cross Border e-Commerce Shopper Survey 2017”, IPC; Accenture analysis
72% of cross-border
purchases weigh 1kg or less
Decline in package weight per shipment
between 2015 and 2017, a likely result of
the impact of eCommerce growth. This
decline contrasts with a rapid increase
in air express trends.
Source: Accenture analysis
20%
31%
21%
12%
7%
4%
6%
12%

5. POSTAL PLAYERS DOMINATE
Copyright © 2019 Accenture. All rights reserved. 5
Postal organizations
make
MOST CROSS-BORDER DELIVERIES
ARE ON POSTAL NETWORKS
*Source: “Cross Border e-Commerce Shopper Survey 2017”, IPC; Global Express and Small Parcels Report 2017,
Transport Intelligence; Accenture analysis
70%Posts
16%Others
14%Don’t know
70%of cross-border
deliveries*
Delivery provider for most recent cross-border
eCommerce order [% of respondents]

6. Copyright © 2019 Accenture. All rights reserved. 6
China is a front runner and is
expected to continue to lead
cross-border growth
Source: Accenture analysis
China outbound express
is mainly on the rise
China to United States
China to Canada
China to Australia
China to European
Union
9%-19%
-2%-6%
Range of Decline
Range of Increase
CHINA DRIVES CROSS-
BORDER GROWTH
CHINA SENDS TO THE WORLD
China’s anticipated
cross-border share in 2021
China’s anticipated B2C
eCommerce transaction
value in 2020
US$1,525B
41%

7. Destination post
subsidizing
delivery cost at
behest of volume
3 lb
(~1.36 kg)
2 lb
(~0.91 kg)
0.5 lb
(~0.23 kg)
1 lb
(~0.45 kg)
4 lb
(~1.81 kg)
4.4 lb
(~2.0 kg)
20
15
10
5
0
Copyright © 2019 Accenture. All rights reserved. 7Source: Accenture analysis
Destination post subsidizing delivery
cost at behest of volume
3 lb
(~1.36 kg)
2 lb
(~0.91 kg)
0.5 lb
(~0.23 kg)
1 lb
(~0.45 kg)
4 lb
(~1.81 kg)
4.4 lb
(~2.0 kg)
Estimated Cost for Postal Delivery Comparison –
China to US vs Within US [USD]
Estimated Cost for Postal Delivery Comparison –
China to France vs Within France [USD]
The fees charged for international post are much lower in transitional countries, like China. Delivery
costs from China (up to a certain weight) are cheaper compared with in-country delivery costs.
SUBSIDIZED DELIVERY
DISTORTS THE MARKET
LOW CHINA-TO-DEVELOPING COUNTRY RATES
20
15
10
5
0
China to US – China Post
Registration (Shenzhen)
New York to Miami –
USPS Retail Ground
Miami to Miami –
USPS Retail Ground
Within Metropolitan
France – La Poste
China to France – China Post
Registration (Shenzhen)

8. As postal organizations move away from the customer, this creates risk from more middlemen
As consolidators expand, Posts
have a smaller role in the value
chain, and no role sometimes.
ContractedNote: Transaction scenario rates based on 2016 published rates for PMI and FedEx for 2.2lb package from New York to London.
Consolidator rates from The Colography Group, February 2016; Source: Accenture Analysis.
Acceptance Line Haul Processing Customs Int’l Trans Customs
Post
$48
$25
$8
Shipping Value Chain
Leg 1 Leg 2 Leg 3
Last Mile
Consolidator→
Post
Revenue
PostConsolidator
$0
$48
$20
Customer
Cost
$16
$34
IndustryModels
Consolidator→
→
→
Traditional
Disruptive
Freight
Freight
Mail
Mail
Alt. Delivery/Post
Post
Post
Alt. Delivery/Post
8
SHIFTING POSITION
INVALUE CHAIN
POSTS ARE MOVING TO COMMODITIZED ROLES
USPS
Shipper/Retailer
FEDEX AMAZON UPS

9. Copyright © 2019 Accenture. All rights reserved. 9
WHAT’S
HAPPENING—
AND WHY?
THE STORY SO FAR

10. Copyright © 2019 Accenture. All rights reserved. 10
PREFERENCES AREEVOLVING
CUSTOMER EXPECTATIONS FOR CROSS BORDER
AND DOMESTIC DELIVERY ARE MORE ALIGNED
Overall Expectations
[% of respondents]
Source: “Cross Border e-Commerce Shopper Survey 2017”, IPC; eCommerce logistics
In the United States, April 2018, Armstrong & Associates; Accenture analysis
Clear information about delivery charges before purchase
1.1 - 2.0 kg
70%
57%
57%
54%
51%
Simple and reliable returns process
Free returns
Free delivery on purchases over particular value
Landed cost calculator at check-out

11. 11
Most problematic pain points in cross-border
eCommerce(1)
Biggest game-changer for cross-border
eCommerce(1)
Note: (1) According to Retail Professionals Worldwide, August 2017; Source: “Key Business Drivers and Opportunities in Cross-border Ecommerce 2017”, Payvision, October 2017;
http://www.supplychainbrain.com/content/logisticstransportation/reverse-logistics/single-article-page/article/target-stores-relies-on-genco-to-manage-its-returns-program/; Global eCommerce Logistics
2018, Transport Intelligence; Accenture analysis
43%
39%
32%
28%
25%
23%
22%
16%
Logistics and delivery
Data protection
Ease of integration
Compliance with local
regulations
Cross-border payments
/multicurrency
ROI
23%
12%
12%
9%
9%
7%
6%
4%
m-Commerce
Rise in alternative
payment methods
Internet of things
50% of retailers offering
international delivery
Online marketplaces
continuing to dominate
Easier entry to
emerging markets
Greater knowledge of how to
do business internationally
China’s "One Belt One
Road" scheme
Profitability is challenging cross-border eCommerce retailers—they must compete with domestic retailers on speed and delivery prices
RETAILER EXPECTATIONS RISE
RETAILERS ARE DEMANDING MORE
Offering exchange
and returns
Pricing/costs of
products & services

12. Copyright © 2019 Accenture. All rights reserved. 12
Offers a single end-to-end
solution for pick-up, packing,
labelling, shipping, and
tracking. It claims it can cut
shipping costs by up to 60%.
On average, overall sales
have increased by 40%.
Offers cross-border fulfillment
and logistics solutions that enable
merchants to start selling fast,
specifically from China to Malaysia.
It reduces returns, enables
exchanges and delivers 40%
faster and up to 50% cheaper.
New asset-lite entrants are serving customers with what they want,
when and how they want it
One-stop, full-service
cross-border eCommerce
logistics handling more
than 26M cross-border mail
and parcel items per year to
more than 220 destinations
worldwide.
B2C EUROPE ALLSOMEEASYSHIP
ENTRANTS OFFER NEW
ECOSYSTEMS OF SERVICE
START-UPS SIMPLIFY WITH TARGETED INNOVATION

13. Copyright © 2019 Accenture. All rights reserved. 13
Same day delivery by local carrier to Singapore
Example: A Singapore-based business orders an item from the United States using
a domestic address in a United States warehouse. Local delivery at the start and end
of the item’s international journey reduces cost.
Free domestic shipping to United States warehouse
Item is repackaged and shipped internationally
Order placed online in Singapore
COST-EFFECTIVE
DELIVERY MODELS
DOMESTIC ADDRESS MEANS NEW DELIVERY OPTIONS
Where is it working?
Terminal 49 is converting cross-
border transactions to domestic
delivery in its role as a digital
freight forwarding service. It
helps small- and medium-sized
companies to transport their
products globally across borders
with less friction, at a lower price
point, and with greater control.

14. Build-your-own supply chain
Copyright © 2019 Accenture. All rights reserved. 14
Investment in JD.com by
Google to develop retail
solutions in Southeast
Asia, the United States
and Europe.
$550M
Build-your-own shipping and
logistics capabilities
Amazon is investing in building its
own network to reduce cost and
dependency on postal organizations
and integrators. It wants to drive down
costs and maximize asset utilization.
Alibaba Group Holding Ltd has signed
an agreement with the Belgium
government to launch an eCommerce
trade hub, which will include
investments in logistics infrastructure.Sources: https://www.reuters.com/article/us-alibaba-logistics/alibaba-signs-agreement-with-belgium-for-e-commerce-trade-hub-
idUSKBN1O410T
https://www.reuters.com/article/us-alibaba-cainiao-investment/alibaba-takes-control-of-logistics-business-pledges-15-billion-
to-expand-network-idUSKCN1C10C2
https://ir.jd.com/node/7876/pdf
$15B
Alibaba’s committed
investment in China
logistics over 5 years.
PLATFORMS SEIZE POWER
A DO-IT-YOURSELF MENTALITY IS EMERGING

15. Copyright © 2019 Accenture. All rights reserved. 15
WHERE NEXT?
DISRUPT TO DELIVER

16. RELIABILITY IS KEY
Copyright © 2019 Accenture. All rights reserved.
POSTAL PLAYERS MUST COMPETE MORE EFFECTIVELY
Increasing volumes—cross border deliveries are growing
exponentially and cannot be ignored.
Technology has come of age—technology is now an essential
enabler, not a “nice to have.”
Leading in the new—alternatives exist for those post and
parcel players that want to reinvent their business models.
How can your postal organization get the most from the
cross-border opportunity?

17. Copyright © 2019 Accenture. All rights reserved. 17
MEETING
CONSUMER
DEMAND
ADAPTING TO
THE COMPETITIVE
LANDSCAPE
EMBRACING NEW
TECHNOLOGIES
Customers want end-to-end
tracking, fast, low cost/free
deliveries and control.
Traditional, democratic
practices are slow, inflexible
and disassociated from
commercial outcomes—
inappropriate for a
dynamic digital world.
Real-time customs risk
assessments and fast-track
packages need to take
advantage of the latest
technologies.
CAPABILITIES NEED UPDATING
PREMIUMSERVICESCANONLYBEACHIEVEDTHROUGH…

18. Copyright © 2019 Accenture. All rights reserved.
• Enable new business models outside of the UPU, e.g., Extraterritorial
Office of Exchange (ETOEs), third-party delivery agents
• Evaluate a framework to enable delivery duty paid (DDP)
• Improve commercial clearance for high-value goods
• Employ Advanced Electronic Data (AED) to seamlessly,
quickly move goods through destination countries
• Introduce smarter, more integrated returns
FIVEACTIONSFORTHEFUTURE
NEW PRODUCT
PORTFOLIOS
CROSS-BORDER
SUCCESS
SERVICES+ =

19. FOR MORE INFORMATION
/in/brodybuhler
BRODY BUHLER
Global Managing Director,
Accenture Post & Parcel Industry
@brodybuhler
robert.b.buhler@accenture.com
www.accenture.com/postal
/in/andre-pharand
ANDRE PHARAND
Senior Executive – Global Consulting
Lead – Postal & Parcel Industry
@andre_pharand
andre.pharand@accenture.com
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