Until now, international corporations have been the main customers of express-delivery companies operating in Russia, but the situation changed in January-February of this year, when two companies started to offer their services to individuals on the basis of Moscow's post offices. In early February, Dutch company TNT announced that it opened 10 parcel-collection points at the post offices located near business centers in downtown Moscow, while its rival, DHL, started operating six parcel-collection points in the city since January.

The volume of the market for express-delivery services equals approximately $60 million, while the proportion of individuals among the customers of these services is below 5 percent. According DHL estimates, a fully equipped parcel-collection point costs around $6,000 to set up. What prompted the companies to take on the expense?

Although express deliverers showed pretty good results last year (30-40 percent growth), the growth was mostly due to market factors, specifically the customs crunch that took place in 2001: For a certain period of time it was economically justifiable to pay express-delivery rates (express-delivery companies enjoy favorable terms of customs clearance) rather than sustain shipment-delay losses. Besides, the market for express-delivery services has been stimulated by the general economic growth.

"There is tough competition between the market's major participants, and it became particularly acute after the 1998 crisis," DHL PR Manager Natalya Ivanova said. "Moreover, the competition has splashed out into the media. Russian economists forecast economic-growth tempo in the country to slow down this year and the next and edge along at 2-4 percent annually. Therefore, it is reasonable to forecast the market for express-delivery services to grow at the rate of 2-3 percent a year because the market's capacity is directly proportional to the country's economic development." She added that the newly opened chain of parcel-collection points at post offices will add convenience to those corporate clients who prefer – for whatever reasons – to act via individuals. She said it was precisely in response to requests from such corporate clients that the project was launched.

"The apparent growth in individuals' interest in express-delivery services is probably connected not even with some companies which are trying to conceal something from reporting in books, but with such a banal reality of the city as traffic jams," EMC Garant Post Marketing Manager Irina Kulagina said, commenting on the same issue. Kulagina added that she considers prospects for attracting individual customers to express-delivery services as fairly realistic: "According to our estimates, 10 million people in Russia are potential customers of express-delivery services." The hindrance, she added, is a relatively high price level and the absence of collection points in the regions.

"The results that have been achieved during the short period of time since we opened parcel-collection points at Moscow's post offices give reasons to conclude that the service is in demand," Ivanova said. "It is difficult to say, however, whether customers of the new service are just individuals or individuals acting on behalf of certain companies," she added.

Encouraged by its success, TNT is now up to considering possibilities for opening more parcel-collection points to increase its market share in the B2C sector. TNT's Marketing Manager Yelena Tyurina confirmed that the newly opened parcel-collection points at post offices are oriented toward servicing individuals. At the same time, she noted that the "company does not plan to introduce any special rates for individuals at this point."

According to data available to Research International, as of December 2001 three companies, namely DHL, UPS and TNT, controlled 53 percent, 16 percent and 12 percent of the Russian market, respectively, for express-delivery services. Of the top three, only UPS considers a strategy of servicing individuals to be non-essential. "The market for express-delivery services has been and remains to be a corporate-client market and is practically not affected by individuals who constitute less than 5 percent in our turnovers," Ivan Shatskikh, CEO of UPS' Russian branch, said. "Looking at figures on incomes in this segment and expenses required for its development (published by some express deliverers) it is easy to derive a conclusion about economic inefficiency of this direction."