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Updated: Royal Mail buys NetDespatch

DeliveryX

We updated this story to include a brief Q&A with Matthew Robertson, commercial director of NetDespatch.
Royal Mail has announced that it has acquired NetDespatch, the parcel data and labelling platform for postal and parcel carriers.

NetDespatch was founded by CEO Becky Clark in 1999. It works with a wide list of ecommerce partners, including ChannelAdvisor, eSellerpro, Magento, OrderWise and StoreFeeder. Its list of carrier partners includes APC, Coliposte, Jersey Post, UK Mail and Yodel, as well as Royal Mail, of course.

In a statement issued earlier today, Royal Mail said: “NetDespatch will be operated at arms-length, as a standalone external-facing subsidiary, enabling it to continue to securely provide services to all of its existing customers.”

The Marlow-based business will remain under the leadership and management of NetDespatch directors, Matthew Clark and Matthew Robertson, NetDespatch said, following the retirement of the company’s founder, Becky Clark.

NetDespatch will continue working with its existing carriers, according to a Royal Mail spokesperson who said “we have no plans to make any changes like that.”

What is less clear is the extent to which those other carriers might feel their relationship with NetDespatch will be affected by the acquisition.

The financial terms of the deal were described by Royal Mail, which has revenues in excess of £9bn, as “not material in the context of the Royal Mail Group as a whole.”

Back in February, Royal Mail acquired StoreFeeder, a Nottingham-based tech firm that had developed the Click & Drop tool used by some marketplace sellers. The acquisition of NetDespatch sees Royal Mail taking control of a platform aimed more at mid-sized retailers, and was described by Royal Mail as “part of our strategy to strengthen our capabilities in this important, and growing, area.”

Nick Landon, managing director of Royal Mail Parcels, said: “The acquisition of NetDespatch supports our strategy of providing our customers with leading edge ecommerce software. It allows customers with complex IT estates to integrate with us quickly and with the minimum of effort, allowing them to improve the service they offer to shoppers. We are confident that this acquisition will support the continued growth of our parcels business with new and innovative software solutions as the needs of our customers evolve.”

Matthew Robertson, NetDespatch

Matthew Robertson, NetDespatch

Matthew Robertson, commercial director of NetDespatch told eDelivery that for the company, its partners, and its customers, things would be business as usual.

“NetDespatch will continue to work as an independent business and retain all of our relationships with existing and indeed new carriers. Indeed Royal Mail’s investment will enable us to grow our business in both the UK and internationally.

“We will continue to operate as normal so our standard operations will continue unchanged. Royal Mail has immediately put into operation a ‘Chinese wall’ between the Royal Mail business and the NetDespatch business in order to mitigate any conflict of interest between the two organisations; key to the success of this acquisition is that NetDespatch continues to operate as a standalone business.”

The eDelivery view:

The last 12 months in the life of Royal Mail have been anything but quiet. There have been the bigger ticket announcements, such as its closer ties with the Chinese ecommerce colossus Alibaba, and the end of public ownership. But there have also been several smaller announcements, which – if taken in isolation – could be easily overlooked. There’s been a returns portal, a new service called Click & Drop aimed at marketplace sellers (which soon turned into Royal Mail buying the company that developed Click & Drop), and now this, the acquisition of a platform with around 130,000 retailers as customers, predominantly mid-sized.

To really make these investments in the small-to-mid sector deliver a return, Royal Mail is going to need to do more than simply provide shipping services. It will need to help facilitate the growth of those retailers using its newly-acquired platforms as part of a strategic plan; hoovering up retailers is all well and good, but in a market dominated by carrier choice and service-commoditisation the victors will not necessarily be those that merely have bulk on their side.

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