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Postal markets open to competition, and consolidation

Posted by: Patrick Stal on Tuesday, June 22 2010 09:17 AM

CVC Capital is one of the major shareholders of bpost. With the acquisition of a major stake in TNT Post, CVC Capital would control a large portion of the postal business in the BeNeLux. The European postal market will be fully liberalized on the 1st of January 2011, and it appears that CVC sees enough synergies and market potential in that market for a profitable business model.

While there has been a lot of criticism and disbelief when it comes to the future success of any postal operator in the coming decades considering the rapid growth of digital communication, it is still a commercially attractive market for multiple parties. It is true that the increasing rise of email is likely to substitute traditional forms of mail, along with new forms of competition within traditional activities. However, it is also true that the brand will start to play an increasingly influential role in this market.


In traditionally monopolized markets, the role of brand for postal operators has been relatively low. Where there is no viable alternative there is no reason for active choice consideration by customers. This will not hold in the future, and has not held over the past decade for many of the larger parties in the market. Although postal markets may still have been physical monopolies in the past years, the internet and email have already grown the role of brand in the segment. In addition to this substitute, many markets were already experiencing competition (such as in The Netherlands) due to earlier liberalization.

European postal operators need to open their eyes to the fact that they will be competing for business, and that their brands are valuable assets in winning the battle over their competitors. Many of the current brands in Europe are heritage brands that have roots going back to the origins of their respective countries. These are strengths to leverage, but strengths that have to be augmented with values that play an important role in customers’ decision-making. These include reliability, speed, cost and especially for corporate customers, a lasting value-generating partnership.

This is no small challenge, and bpost has taken a strong first step with its renewed brand last week. It will be interesting to see which brands follow suit and what consolidation activities we will see on a brand level over the  next coming months.




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