The shift from traditional mail services to digital payments, e-commerce logistics and a national digital addressing system is turning out to be the Postal Corporation of Kenya’s survival strategy.
Postmaster General and chief executive officer, John Kipyegon Tanui, says the corporation recorded more than 10 per cent financial growth in the 2024/2025 financial year following a postal tariff review and expansion into new business lines.
Tanui attributed the growth to portfolio diversification as the corporation moves away from declining traditional services such as ordinary mail and private letter box rentals.
“The old revenue streams are declining as expected, while the new streams we have been investing in are accelerating,” he said in an interview.
The decline in conventional mail services mirrors global trends in which physical correspondence has steadily been replaced by email, instant messaging, and other digital communication platforms.
According to Tanui, the recent review of postal rates helped cushion revenues from legacy services but could not reverse changing consumer behaviour.
Ordinary letter mail and private letter box rentals continue to face declining demand, prompting the corporation to accelerate migration to digital alternatives such as Virtual P.O. Boxes and door-to-door delivery services.
The corporation is instead seeing stronger growth in courier and parcel delivery, particularly through Express Mail Service (EMS), driven by the rapid expansion of e-commerce in Kenya and across the region.
Rental income from Posta Kenya’s vast property portfolio is also increasing as the corporation leases unused space and modernises key buildings for commercial use.
At the same time, digital payment revenues are expected to rise as adoption of its Postapay platform gains momentum.
“The new rate card is doing what it was designed to do — protect revenue per item in the legacy book, reflect true cost-to-serve in courier and parcels, and create headroom to invest in digital and logistics propositions that customers actually want,” Tanui said.
The postal corporation is now restructuring its business around four strategic business units — mail services, courier services, payment services, and assets and properties — with a strong emphasis on digital transformation.
Under the mail services division, Posta Kenya plans to introduce a National Digital Address Infrastructure that will convert all postal codes and physical locations into a unified digital database with geospatial mapping and open verification application programming interfaces (APIs).
The platform is expected to support banks, e-commerce firms and government agencies seeking verified digital addresses for customers and citizens.
In courier services, the corporation is seeking to position itself as a logistics player in regional and international trade through integrated e-commerce logistics, cold-chain logistics, and a Kenya National E-Commerce Clearance Hub (EHUB).
The EHUB project will include a dedicated “Green Channel” to speed up customs clearance and last-mile delivery for cross-border e-commerce goods.
The corporation is also modernising its offices at City Square, Jomo Kenyatta International Airport and Mombasa to increase processing capacity for imports and exports to more than 100,000 items.
In the financial services segment, Posta Kenya is deepening partnerships with Safaricom through M-Pesa, as well as Equity Bank and Co-operative Bank of Kenya, to expand agency banking services in post offices across the country.
The partnerships will enable deposits, withdrawals and bill payments, particularly in rural areas where access to financial services remains limited.
Tanui said Postapay is being developed into a full digital wallet capable of handling domestic and cross-border remittances, with ambitions of becoming a preferred payment platform for both national and county governments.
He argued that while some observers view the postal corporation’s product portfolio as outdated, the core business units themselves remain relevant if modernised to meet emerging market needs.
“Our job is to refresh the product layer,” he said.
The transformation reflects a broader shift among postal operators globally as they increasingly evolve into logistics, fintech and digital infrastructure providers to remain commercially viable in the digital economy.
For Posta Kenya, the strategy could also unlock value from its nationwide branch network and extensive real estate holdings, assets that few private competitors can easily replicate.
The success of the transition, however, will depend on execution, technology adoption and the corporation’s ability to compete against agile private courier, fintech and logistics firms already dominant in the market.
