Singapore Post shows signs of possible exit from U.S. ecommerce market
Category: #retail  By Pankaj Singh  Date: 2019-03-14
  • share
  • Twitter
  • Facebook
  • LinkedIn

Singapore Post shows signs of possible exit from U.S. ecommerce market

Reports suggest that Singapore Post (SingPost) could wind down or sell off its U.S. e-commerce business after performing a strategic review of the loss-making unit. Analysts have predicted that a divestment or closing down of the unit could result into potential long-term profitability for SingPost.

Apparently, two broking firms, including CLSA, have estimated SingPost’s earnings factoring in the benefits of a potential transaction. The poll seems to have been conducted after the company had stated last month that there could be an impairment risk to its U.S. unit’s book value.

A spokeswoman for SingPost, Ms. Mei Yu Hong, informed that the firm is now conducting a review of the business, which it expects to remain a loss-making unit in the current fiscal year. She explained that the environment for operating e-commerce businesses in the U.S. is still challenging, owing to an increase in customer bankruptcies and intensifying competition. Ms. Hong added that any impairments would be evaluated on the basis of full financial year results and future plans.

An analyst at CLSA said that the exit of SingPost’s U.S. e-commerce business could be done either by a sell-off or by scaling down. Supposedly, sentiment has been affected due to the loss-making unit even as the company’s management had reversed the structural decline in the Post and Parcel segment. The company’s filing revealed that the unit’s losses had widened to $13.3 million in the third quarter, in comparison with $11.7 million loss a year ago.

The U.S. e-commerce unit of SingPost, which assists retailers like Tommy Hilfiger and Speedo in managing package deliveries and online stores, has reportedly been grinding on the profit of the company by suffering losses continuously for the past three years. Subsequently, the market value of SingPost has seemingly been halved after reaching a record high in February 2015.

Counting Alibaba Group Holding and Temasek Holdings as two of its largest shareholders, SingPost had acquired majority shares in U.S. e-commerce firms Jagged Peak and TradeGlobal Holdings for around US$184 million in 2015.



About Author

Pankaj Singh

Email: [email protected]   

Pankaj Singh

Pankaj Singh Develops content for Market Size Forecasters, Algosonline, and a couple of other platforms. A Post Graduate in Management by qualification, he worked as an underwriter in the UK insurance domain before deciding to switch his field of profession. With exp...

Read More

More News By Pankaj Singh

Flipkart launches Loyalty Program across 5,000 retail outlets in India
Flipkart launches Loyalty Program across 5,000 retail outlets in India
By Pankaj Singh

E-commerce giant Flipkart has recently launched SuperCoin Pay, a system of currency which its customers will have the right to use across tons of retail stores in the country. Flipkart is betting on its loyalty program...

Sirnaomics reveals dose administration of 1st patient in STP705 trial
Sirnaomics reveals dose administration of 1st patient in STP705 trial
By Pankaj Singh

Sirnaomics, Inc., a clinical-stage biopharmaceutical company, has recently announced the dose administration of the 1st patient in a Phase 2a clinical trial of STP705. STP705 is a lead drug candidate develop...

Pfizer’s XALKORI®) Approved by US FDA for ALK-positive ALCL treatment
Pfizer’s XALKORI®) Approved by US FDA for ALK-positive ALCL treatment
By Pankaj Singh

The pharma giant Pfizer Inc. has reportedly declared that the U.S. Food and Drug Administration (US FDA) has approved the sNDA (supplemental New Drug Application) for XALKORI® (crizotinib) for the treatment of chil...