Key Research Findings and Initiatives to Promote E-commerce

1. Key Research Findings and Initiatives to Promote E-commerce Jane Dyer Director Markets and Communication International Post Corporation Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

2. Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

3. Postal Revenue Projection for 2015Mail revenue down by 50% and other revenue up by 10% Japan Post Group Deutsche Post DHL UPS United States Postal Service FedEx Poste Italiane SpA Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

4. The Outlook for E-commerce Growth is Strong Source: Forrester 2010 & 2009 Online Retail Forecast Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

5. 9 Global Parcel and Express Market ~€133B

6. E-commerce Research Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

7. Research DesignMultiple perspectives • How businesses encompass e-commerce & cross-border trade • Potential barriers to the development of e-commerce & cross-border trade • Future potential of cross-border trade • How postal organizations can better meet the needs of customers • Value of a return solution to e-retailers • Incidence of cross border physical purchases • Country of origin of cross border goods • Motivations & barriers for purchasing cross border • Consumer needs in terms of delivery • Purchasing online behavior including choices in delivery options • Current return behavior Technological Infrastructure Legislative Framework Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

8. Scope of ResearchRange of e-commerce market maturity Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

9. Online Shopping BehaviourCross-border Cross-border shoppers are even more experienced and buy online more frequently. years Learning process Experience in Years years years Light Medium Heavy Frequency of Purchase Base: Individuals with internet access at home who purchased goods for physical delivery in past 12 months Q1.1 & Q1.2 * cb – Cross-border Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

10. Online Purchases Top 10 goods for physical delivery Base: Individuals with internet access at home who purchased goods for physical delivery in past 12 months Q2.1 & Q2.1A, Q2.2 Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

11. E- retailer Business StrategiesCross-border adoption segments in the US “It’s almost like we take international orders, but we’re not actively trying to sell our product to international customers.” ExploitersLong-time players Positioned with superior items or best pricing over in-country or other retailers Use referrals Use other portals Use ownseamless shipping arrangements EmbracersVery knowledgeable Own fraud detection system Use retail stores (if have them) to increase cross-border sales & get faster delivery May use country URLs or translations EmergersSome website changes More experienced See value in expansion Use international facilitators EmbryonicsPlanning orrelatively new to international Ad Hoc orders Manual fraud Inspection No changes to domestic website InertNo desireFear fraudDomestic focusNo resources for international expansion Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011 11

12. Return ServicesIncidence and methods of return % Ever returned goods Average number of returns Base: Individuals with internet access at home who purchased goods for physical delivery in past 12 monts and EVER RETURNED goods Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

13. Conclusions and LearningSuccess in delivery Trust E-retailers Consumers Customer care DeliveryPartner • Price • Reliability • Choice • Information • Cost • Reliability • Track & trace • Flexibility in capacity Cost effective Quality service • Drivers for Success • Segmented pricing models • Proactive information management • Logistics expertise • Relationship management • Flexible business model Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

14. Cross-Border Customer Demands • Low shipping prices • Provision of estimated delivery date • All-inclusive pricing at the point of purchase • Full integration of the tracking data in the web portal of purchase • Pro-active notification of delivery to the consumer throughout the supply chain • Simple, clear and speedy returns processes Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

15. The Future of E-commerce • Transfer of retail from Main Street to direct delivery • Sharing strategic insights and vision • Where is the consumer technology headed? • Future development needs of global supply chain? • Key issues to overcome? • Meeting the needs of the global consumer Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011