Reflecting how the postage and fulfillment market is changing, Royal Mail has invested in Dragon’s Den protégée Mallzee – a mobile shopping app for fashion gubbins, the biggest market for delivery – in an attempt to be built into the purchase process.
Mallzee brings together more than two million fashion items from over 100 retailers enabling shoppers to browse, ‘favourite’ and purchase a world of fashion from a single app. It offers an additional, complementary channel to market for clothing retailers, one of the fastest growing and largest market sectors for parcel sending.
Royal Mail’s investment in Mallzee reflects the increasingly technology-driven nature of the delivery market. It helps align the business with the rapid growth in consumer purchases made from mobile devices – 37 per cent of UK online shoppers used a mobile device to make an ecommerce purchase in the last three months¹ – and the continued developments in shopping apps, which are the fastest growing app category². It provides Royal Mail with exposure to new, high-growth revenue streams further up the value chain, as well as complementing Royal Mail’s existing parcel services.
Together with the acquisition of Storefeeder in February 2015 – the ecommerce technology specialist which provides order management, stock control, smart warehousing and courier integration for web merchants – the investment in Mallzee is part of Royal Mail’s continued focus on digital innovation and brings innovative ecommerce capability to the company. In turn, Royal Mail can introduce Mallzee capabilities to many more retailers who not already present on the platform.
Nick Landon, Managing Director of Royal Mail Parcels, explains: ” We think we can rapidly add significant value to the Mallzee business by introducing their solution to a wider audience. While the entrepreneurial and cutting edge mobile capabilities that Mallzee have developed will complement our existing distribution services.”
Royal Mail Group Limited is acquiring newly issued shares as part of a £2.5 million fundraising by Mallzee to further develop the business. Existing investors, including the Scottish Investment Bank, Par Equity and other private angel investors, are also participating in this fundraising. As part of the transaction a Royal Mail representative will have a seat on Mallzee’s board of directors. The financial terms of the transaction are not material in the context of the Royal Mail Group as a whole.