UK C2X parcels market reaches 350m items in 2016



Parcels sent by consumers and micro-SMEs represent a growth area with nearly 350m sent in the UK in 2016, or about one per adult every two months.

The C2X segment includes parcels sent either personally to family and friends which we believe acccounts for about 120m parcels, after the sale of an item via eBay or other listings and hobby sites (130m items), or in order to return unwanted home shopping items (a further 90m).

It is the subject of a new report: UK Consumer and Small Business Parcels Services (C2X): Market Insight Report 2016. The report sets out how we think the market has grown since 2011 and our forecasts to 2021. It is based on our research into the segment and its drivers, and our market model – updated in the light of trends such as slower growth at eBay and the increase in retailer-paid returns. We also explain how we expect market shares to trend and what we believe it is realistic for the Royal Mail to retain, given increased competition.

As well as reviewing the positioning of the Royal Mail in the segment we consider the range of newer providers. These include brokers, such as Parcel2Go and Parcel Monkey, and networks, such as Collect+, myHermes Parcel Shops and the locker network, InPost. Our detailed review of pricing by weight and service category confirms that, while Royal Mail continues to be competitive for smaller parcels, where its universal service delivery network enables it to be a low cost supplier, it is less so for larger items.

Key questions for different parties include the following.
– How much of the Royal Mail’s C2X volumes are smaller items for which it remains competitive versus larger items where others such as Hermes now have the advantage on price.
– How might the ending of the Royal Mail / Post Office exclusivity arrangement affect the market?
– Can networks such as Collect+ and InPost scale up to meet growing demand and to achieve the density required to be truly convenient?
– Can brokers such as Parcel2Go and Parcel Monkey add service attributes to help them reduce the risk of disintermediation by carriers going direct to small customers?
– Might other carriers follow the approach of Hermes in focusing on this segment to build a substantial share more quickly?

The report, which has been fully revised since the previous version last year, is available here: UK C2X Parcels Market Insight 2016





Share

Comments are closed.