Thursday, September 21, 2023

PostEx Acquires Call Courier As It Gets Scaling In Pakistan’s Fast-Growing E-Commerce Market

Must read

Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

The fast-growing e-commerce sector in Pakistan has a problem. It is an industry where it is standard practice for consumers to pay for their goods COD and hand over payments to the courier at the door. It can take two weeks or more for this money to reach the ecommerce provider’s accounts, creating major cash flow problems that hinder their growth.

PostEx is an innovative start-up that believes it has found the answer – and today it announces the acquisition of logistics company Call Courier, which will significantly expand its services to e-commerce providers and their customers. The deal creates the largest e-commerce service provider in Pakistan in terms of daily transactions.

“Our job is to ensure that e-commerce providers in Pakistan can live up to their potential,” explains Omer Khan, co-founder and CEO of PostEx. To do that, the company operates through a hybrid model, supporting e-commerce businesses with access to financing, as well as logistics and delivery services.

Founded in 2020, PostEx’s business is based on an invoice financing model. When an ecommerce platform sells something, PostEx is able to advance a significant portion of the revenue up front – usually around 70% – so the company doesn’t have to wait for a COD payment to filter back. This supports the cash flow of the e-commerce provider, allowing it to invest and scale faster.

However, from the start, PostEx’s founders realized that offering this type of financing service would mean taking on the cash flow problems that the ecommerce provider’s customers had previously faced. So they decided to launch their own logistics service, offering delivery and fulfillment to their e-commerce customers as well as financing. That meant PostEx collected cash on delivery instead of waiting for third-party logistics providers to pay, significantly reducing payment delays and cash flow exposure. “We realized we had to take control of the logistics process,” Khan recalls.

The hybrid concept made sense, but rolling out the infrastructure needed to meet the logistics needs of e-commerce platforms is a tougher task than simply operating as a financial services company. For this reason, PostEx was initially launched in just a single Pakistani city, Lahore, before expanding its service to Islamabad and Karachi.

That rollout has enabled PostEx to reach 60% of the country’s e-commerce market, Khan explains, leaving him and his co-founders frustrated. “We wanted to be able to serve 100% of the destinations our customers sell to,” he says. “That’s what they need.”

That’s where today’s Call Courier deal comes in handy. The company is one of the largest logistics operators in Pakistan, supplying consumers in about 500 cities across the country. The purchase of the company by PostEx will therefore enable it to jump to almost 100% coverage of the country. “It’s about adding more cities to our offering and increasing our market share,” Khan added.

The Call Courier business will operate as a wholly-owned business under the PostEx brand, with a focus on high-quality consumer services. The vast majority of PostEx’s customers use the company for both invoice financing and logistics service, Khan explains, but a small minority of larger e-commerce providers only look for the latter. Call Courier will also extend its reach to that constituency.

In a market where e-commerce is taking off – in part because of the scaling issues that carriers have faced – PostEx is now exceptionally well placed to take advantage of what is shaping up to be exponential growth.

“We’re really seeing a shift in people’s buying patterns,” Khan says. “We expect that will only continue to accelerate.” Indeed, Pakistan’s e-commerce market was worth about $4.5 billion in 2020, but is expected to reach $7.7 billion this year – and $12 billion by 2025.

Following the transaction, PostEx will serve approximately 1.3 million consumers and 8,000 merchants nationwide, with a monthly loan book of more than $12 million. That finance book will grow rapidly, with PostEx drawing on both venture capital and the capital it has already raised to support its lending business. The company completed an $8.6 million seed funding round in November 2021, with funds from investors including Zayn Capital, Global Founder Capital, MSA Capital, RTP, FJ Labs and Shorooq.

Khan is ambitious for PostEx, but also for the e-commerce market it serves. “Our goal is to bring about change,” he says. “It will be a win for us if every e-commerce provider has access to the financing and services we provide, even if they don’t get it from us.”

In the meantime, the company continues to expand its services and has obtained a regulatory license that now allows it to offer a wider range of financing. It is also looking at international expansion, with markets such as Saudi Arabia and Egypt following a similar cash-on-deliver model to Pakistan, offering exciting opportunities.

More articles


Please enter your comment!
Please enter your name here

Latest article