Sun | Apr 22, 2018

E-shopping growth boosts business for couriers

Published:Friday | June 25, 2010 | 12:00 AM

Avia Collinder, Business Writer

The growth in the use of smartphones in Jamaica is not only spawning new opportunities for online shopping businesses, but is also proving a fillip to established courier services, some of which are creating their own shopping portals as a new value-added service.

New local outfit, began taking orders in May this year and already is boasting 500 hits per day.

Its principals, Ricky and Kara Vaz,have not disclosed what proportion of those are converted into actual sales.

"With the introduction of the Blackberry and (other) Internet-enabled telephones, there are thousands of new subscribers who did not exist before," said Ricky Vaz.

For, the average purchase is under US$200 and sea freight is offered for large items.

Its courier partner is AirPak Express, whose delivery charge is five per cent of the value of the package they transport or US$10 per delivery, whichever is greater.

AirPak is reporting that anywhere from five to 10 per cent of its deliveries are e-commerce related.

The courier offers both domestic and international express delivery service through partnerships with several international companies.

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It says 90 per cent of its business comes from delivering just-in-time inventory and correspondence for government and private-sector companies as well as individuals.

"The general decline in global and domestic business has translated to a direct decline in the volume of packages being sent," marketing manager Derek Dwyer said, adding that the company has had to seek out measures to help to contain costs and improve efficiency.

Tara Couriers, with about 20 per cent of its business already related to online shopping deliveries, has entered the e-shopping business in a direct way.

The company has launched its own e-shopping portal, promising to use its international credit cards to facilitate purchases by shoppers who do not have one.

"You do not need to go away to buy," Tara Thompson, the marketing manager, said of the two-week-old service, adding that there has been a definite increase in the demand for online shopping.

For a one-time sign-up fee, clients and three friends can shop once a week with delivery services right to their door, she said.

Delivery costs J$300 in the Corporate Area and J$600 to elsewhere in the country, while freight charge is US$13 for the first five pounds and US$2 for each additional pound.

There are an estimated 50,000 e-shoppers in Jamaica with credit card usage put at around 12 per cent of the market.

Not all couriers are reporting a business slowdown in their traditional trade originating overseas.

Christopher Barrett, the chief executive of the seven-year-old Global Courier Services, said his company grew business 20 per cent between January and October 2009 over the same period in 2008, adding 7,000 new clients.

The company has since launched its own expanded courier service, including shipping options.

Colleen Phillips, managing director of 11-year-old MailPac, a subfranchise of Aeropost Interna-tional Services Inc, claimed 10,000 new accounts during the same period.

In January this year, in anticipation that local online shopping will also begin to grow, Ronald Stevenson, the head of the year-old shopping website, launched his own electronic payment card.

The VCard was created for the company by US-based Virtualpay Inc. According to VirtualMall, the VCard and VBonus offer online shoppers money-back options.

The VCard is in Jamaican currency with maximum value of J$100,000, and no expiry date on funds added by the user.

Registration is free, the company said, and subscribers can either top up through JN Live online, Scotiabank online, NCB online, TeleScotia telephone banking and Paymaster outlets.

VirtualMall, at February this year, had53 local online stores and products and services including art, books, business and industrial supplies, home and garden items, computers, networking services, baby gear, clothing, shoes and accessories and consumer electronics.

Marketing manager Michael Campbell said the site is currently receivingover 350,000 hits per month, with70 per cent originating in Jamaica.

"We are looking to capture this 70 per cent of Jamaicans as potential shoppers, as well as Jamaicans from the diaspora," he said.

A poll by researcher Bill Johnson, which was released in April this year, showed growth in Internet shopping.

This growth in online retail activity coincides with increased usage of the Internet.

The Information Economy Report, published November 2009, reported that 47.65 per cent of Jamaicans now use the Internet.

Seven years ago, usage was at 25.5 per cent.