Competition and regulatory developments We provide postal and logistic services in chosen markets. Within the Benelux we are the leading mail and parcels company, and in Italy and Germany we hold the number-two position in the mail market through our Nexive and Postcon businesses. Spring Global Delivery Solutions (Spring) provides our customers with cross-border mail, parcels and packets solutions. When developing PostNL 2020, we looked at the unique impact competition and regulatory landscapes could have on each of these businesses. We discuss these developments and how they could affect our business segments below.
Competition and regulatory developments Competition
Regulatory developments
Competition - which can be defined as other players operating in our markets and substitution - is a constant factor in our business.
The development of competition in our markets Mail in the Netherlands Competition in Mail in the Netherlands is impacted by digitisation and other postal operators. Digitisation leads to declining market volumes because of a range of digital alternatives for mail, such as electronic invoicing or other digital marketing services. The shrinking mail market leads to intensified competition between postal operators, and is impacted by regulation. Competition from other postal operators comes from operators which (mainly) use their own networks and from operators which are (mainly) consolidators. In terms of network competition, there is one alternative nationwide network operated by Sandd, and various regional networks, which partly use the PostNL network and each other’s networks. These regional players are targeting specific markets with specific propositions on either price, quality or added value. Consolidators are bundling batches of mail items from different customers and delivering them as one batch to PostNL for delivery to the end receiver through the PostNL network. By doing so, the consolidators benefit from arbitraging between the prices they charge to their customers and the price they have to pay to PostNL. We continuously review and innovate both our operational structure and our commercial propositions. This keeps costs at a level that enables us to stay competitive, and allows us to enhance our propositions to the market. Parcels Competition in the Benelux region, which is already strong, is intensifying from both established logistics players and new (last mile) entrants, attracted by growth in the e-commerce market. They are investing in their networks to meet the service levels demanded by customers and the end consumer. By continuing to innovate and strengthen our service offerings, we remain the leading e-commerce player in the Benelux.
PostNL Building our future | 4 Our view on the market
We operate in markets regulated by national and international authorities, each of which stipulate different rules and standards.
In logistic solutions, there is increasing demand for service companies to offer warehousing, fulfilment, distribution and collection along the supply chain. Competition is intensifying, as existing market participants choose to focus on integrated delivery services. Our position within the logistics market differs, from being market leader through our Extra@Home proposition to market challenger in fulfilment services. International The cross-border mail market is highly competitive. In the markets in which Spring operates, competition comes mainly from the incumbent postal operators, and partially from consolidators. The cross-border parcels market is also very competitive, with incumbent players challenged by new entrants, all searching for opportunities in a growing market. In Italy, we saw the competitive environment intensify as Poste Italiane increased its price pressure on the market. Italy’s parcel market is growing and competitive. With Nexive’s parcel proposition, we differentiate ourselves by offering a number of products at different price levels. For example, our Sistema range gives customers the choice between the full-service Completo through to the no-frills Economy. Through Postcon, our German business, we are the main competitor to Deutsche Post. Our focus is on leveraging our price-leadership and continuing to deliver on our quality promise. We made a number of acquisitions during the year, raising our profile in the market. Postcon maintained its volume share and remains the number two player in the market. The move by Deutsche Post to increase its 2016 tariffs on various products creates opportunities for Postcon.
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