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Royal Mail: Biggest Customer Amazon Turns Rival

Amazon had been Royal Mail’s biggest customer, accounting for 6% of sales. But a new delivery service from Amazon along with competition from TNT, Yodel, and others has negatively impacted Royal Mail revenue.

Formerly Britain’s national postal service, Royal Mail underwent privatization last year but remains the preeminent service in the UK parcels market. The company told analysts on Wednesday it intends to remain so, reporting parcel volumes growth of 2% in the first half of its fiscal year.

Royal Mail also boasted that Royal Mail options are offered on more third-party web channels and said tracked returns are now integrated into eBay, while its Sunday delivery is “attractive for e-retailers and convenient for consumers.”

In October, EcommerceBytes reported Amazon was collaborating with Smiths Newson a same-day package pickup service in the UK. Royal Mail said the impact of Amazon’s own delivery reduces addressable market for carriers, creating price pressure in already competitive environment.

Royal Mail’s UKPIL parcel revenue was down 1%, the company said in its earnings report on Wednesday. “We estimate Amazon’s own delivery network will reduce the annual rate of growth in the UK addressable market to 1-2% for approximately two years. UKPIL parcel volume grew by 2%.

The company said its vision was to be recognized as the best delivery company in the UK and across Europe. Its full-year outcome is dependent on its performance over the Christmas trading period, it said.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.