Singapore Post recently announced plans to sell its loss-making US e-commerce business and shift to focus on Southeast Asian markets and the wider Asia-Pacific market in the future.
Singapore Post said that through a strategic assessment of the United States e-commerce business, the company began to sell Jagged Peak and TradeGlobal, two companies that Singapore Post acquired in 2015.
Singpost’s non-us operations will not be affected by the divestiture. The strength and strategic competitive advantage of the company are mainly in southeast Asia and the Asia-pacific region, which will bring significant growth opportunities for the company.
Paul Coutts, chief executive of Singapore Post Group, said that after a strategic assessment, the company decided to step up domestic investment in Singapore while expanding its Asia-Pacific market with competitive advantage. The sale of the two us companies means the end of the external market expansion strategy in the Asia-pacific region. The strategy, put forward by former chief executive Wolfgang Baier, aims to build a global network through diversified acquisitions in Asia-pacific and North America.
It is understood that in October 2015, Singapore Post invested 169 million U.S. dollars to buy 96% of Trade Global Company, a top five end-to-end e-commerce company in the United States, which operates fashion, beauty, home furnishing and other brands, and provides website services, omni-channel order management, logistics and customer service. A few days later, Singapore Post invested 15.8 million of dollars in the acquisition of a 71% per cent stake in Jagged Peak, a global provider of end-to-end e-commerce solutions operating an e-commerce platform and an order management system with a business revenue of about $61.7 million in 2014.
During the acquisition by Singapore Post, all two companies experienced a series of losses, which were a drag on Singapore Post’s profitable business in the local and Asia-Pacific region.
For the fiscal year ending March 2018, Trade Global’s revenue rose 3.7 percent to $129 million, but Jagged Peak’s turnover fell 2.7 percent to $104 million.
Singapore Post said at the beginning of the year that the U.S. e-commerce performance in the current fiscal season is unsatisfactory and will continue to lose money. Singapore Post’s e-commerce 2018 division reached $33.9 million in operating losses from 4 to December, mainly due to higher costs in the US market than revenue growth.