While postal businesses delivered 715 million items in 2019, last year the total market output reached nearly 2.5 billion items, of which package and e-commerce output reached 1.84 billion.

La Hoang Trung, director general, Department of Posts, Ministry of Information and Communications

More specific evaluation and comparison of traditional postal services and delivery services serving e-commerce show that postal service revenue and output grew rapidly at 20 per cent annually on average in 2019-2023, but the growth rate has tended to slow down.

Revenue and output of package and parcel services are growing faster than the growth rate of postal services (about 1.5 times), accounting for a major proportion in such services (about 76 per cent) and increasing in 2023 to 90 per cent.

E-commerce plays an important role in the growth of postal service revenue. Package and parcel revenues for e-commerce account for an important proportion (60 per cent) of such revenues.

Along with the rapid growth of e-commerce, especially e-commerce platforms, there has been a trend that e-commerce platforms build closed ecosystems, including e-commerce platform businesses, and postal businesses to deliver goods. Immediately after establishment, postal companies of e-commerce platforms grew rapidly, and in just a few years, they are among the top 10 postal businesses with the largest product market share in the market.

In addition, most of the companies in the top 10 are participating in transporting goods to e-commerce platforms. This shows that competition issues will mainly take place among postal businesses participating in e-commerce package delivery.

Along with the rapid growth of e-commerce, the output of postal items serving e-commerce activities is also increasing rapidly, thus creating fierce competition and leading to possible risks of unfair competition practices. Businesses continuously offer discounts, promotions, giveaways, and even have free shipping and voucher programmes all year round. These are also different forms to reduce prices among companies.

Although the quality of services among businesses has being continuously improved, due to the rapid increase in postal output each year, some fail to ensure service quality. There are still cases of lost items, late delivery, and other issues.

Competition rising for e-commerce postal services, illustration photo/ Source: freepik.com

E-commerce platforms are appointing a small number of postal businesses (usually 7-8) to participate in transporting goods traded on their e-commerce platforms, while shops and buyers cannot choose delivery service businesses.

According to the Law on Postal Services and its guiding documents, postal companies have the responsibility to publicise and notify rates, provide services in line with listed prices, while ensuring that maximal reductions of promotional services not exceed half of the most recent listed or announced rates.

According to the Law on Prices, for goods and services that are not in the list of goods and services priced by the state, businesses themselves set their own prices for goods and services they produce and trade.

The Law on Prices also stipulates that ministries and ministerial-level agencies managing sectors and industries are responsible for checking the factors that make prices for goods and services within their scope of management, and assign inspection tasks for specialised agencies and units.

According to the Law on Competition, enterprises and groups of enterprises with a dominant market position are prohibited from selling goods or providing services at a cost that would lead or likely lead to the elimination of competitors. They are also not allowed to impose unreasonable purchase or selling prices of goods or services or that cause or are likely to cause damage to customers.

To ensure healthy competition in the market, we will take a number of measures. They include strengthening supervision and inspection of implementation of regulations on rates, quality, and publication of results for the group of 20 large postal enterprises. It will also enhance inspection of operators of e-commerce platforms to ensure that they publicise criteria for selecting units to transport goods purchased and sold on e-commerce platforms.

We will also revoke the licences of postal businesses that repeatedly violate regulations and use licences for the wrong purposes. Moreover, coordination will be boosted with relevant ministries and agencies to manage competition, promotions, and prices.