Global Market Outlook on Postal Service in Belgium

The postal sector is divided into the segments of letter post, parcels and express mail and press distribution to subscribers. The letter post category includes the addressed commercial mail segment which is the prime area of focus for the report. However, transactional mail also has some element of commercial mail in it (administrative mails e.g. invoices, pay slips, etc.).

courier belgium market

Market Size and Business Segmentation 

The addressed commercial mail contributes ~14 percent of the consolidated letter post market (by revenue). The market is consolidated with two suppliers BPost and TBC-Post, with BPost having the major market share (~97 percent) in the domestic letter post market

  • The overall Belgian postal market was valued at €2.54 billion for 2017 and it is expected to grow at a CAGR of 1.3 percent (2015-2020)
  • However, the pace of growth of the industry has slowed down (~1 percent Y-o-Y between 2014-2017) mainly due to the slump in the domestic mail volume
  • The Belgium letter post-market contributes ~47-49 percent of the overall postal market and it has a declining trend of 2-3 percent Y-o-Y owing to the faster adoption of electronic media for information exchange. The addressed commercial mail for corporates is ~15 percent of the letter post market, and this includes letter posts in bulks as well
  • The declining market for letter posts are balanced out by the e-commerce trends. There is a steady increase of parcel and express mail services which helps in the sector’s overall growth
  • BPost is the dominant player with 60-70 percent market share in the total postal sector and their domestic letter post market share is estimated to be 97 percent, making them a near monopoly in the letter post segment
  • BPost is designated by law as a universal service provider (USO) until 31 December 2018. However, it will continue to provide universal service (on the basis of a management contract concluded with the State) for a period of five years, i.e. until 31 December 2023
  • Though BPost is currently the sole USO in Belgium, BIPT has licensed TBC-Post to be the other player to operate in the universal letter post segment in Belgium
  • The overall market is extremely consolidated in the letter post segment, providing limited avenues for negotiation until the market is more liberated with other suppliers

Industry Trends and Regulatory Framework

The liberalization of the postal sector is still in the growth-stage for the letter post segment. License restrictions limit the entrants in this sector; however more reforms are expected through the law that will be announced later this year. Currently, only two service providers operate in the sector with stringent operational licensing conditions.

  • With a spend of €10 million in the addressed commercial mail segment, thus the buyer contributed almost 6 percent to the market revenue in 2017
  • In 2018, the average postal tariffs will rise by around 4.7 percent across all domestic mail items for the USO
  • This would have an impact in the addressed commercial mail segment as large businesses have to budget their spend accordingly
  • The tariff of the Belgian USO is still lower than EU’s tariff average, however it remains high when compared to the 15-18 countries among the EU (comparison based on 20-50g nominal standard price)
  • Average rate difference between TBC-Post and BPost is 10-20 percent for various types of postal dimensions/type of service