India Post is considering a foray into banking into Insurance and Banking.

If a company doesn’t have the management will to expand its own market even if they have the money, they often diversify. But lack of will might not be the only reason but I believe it is a common reason. When the management becomes sure that, further pumping in of the funds would not necessarily translate into revenue growth, the company looks for diversification. Some does it for various other reasons like backward or forward integration. Or that a new venture might give a better Return on Investment than the existing ones. For the later case, if that be the case why not sell out the whole business and start the new venture all together. But then, there is the security of an existing company that is doing well, so sell out and start something that is totally new and apparently with no prior expertise. But diversifying into a purely Unrelated field have often proved painful unless you are a conglomerate like GE, or tats and Reliance or a Chaebol like Hyundai and Samsung where you have ready pool of talented managers and experts to draw the talent from. Even Chaebols have failed, read Daewoo, but it wasn’t due to diversification per se. Another good reason for diversification might be for the same reason you diversify your investments. If this industry suddenly gets expired, gets extinct Like Video tape player, Snail mail.

Oh yeah, I was writing about the snail mail. India post. India post is planning to foray into banking and Insurance,read.. Will Email be the death knell for Snail mail. A topic often debated about ever since Email became free. It is not whether Email will kill snail mail or not, at lest in India. Millions of Labourers from Bihar toiling in the construction sites of Gurgaon, Mumbai, Guwahati will not write emails. They still use the post. Another Million of Jawans still write Chithi. The core business of India Post still has a good chunk left in the life Cycle Curve. But foresight is never bad and it’s a very welcome thought that India post wants to diversify. But why Banking? Is reach Reach the only key for a Bank to succeed ( India Post has the Reach). Why can’t India post diversify and expand into the Courier Business. Logistics and Courier service is a Huge Industry ( I don’t want to google just now to find the market size) and India post can very well leverage to become a modern Courier company. Why US post and Deutsche Post have done extremely well by foraying into the Couriers delivery business. That is what India post is good at. Why not leverage? Leave banking to SBI with its reaches.
Read about deutsche post

First it was epost, now it is banks. I guess India post is already into insurance for Central Govt. Employees. For the uninitiated, epost is a hybrid mail where you send an email to India post and India post print and delivers it. Well, won’t it be a one way communication? Whoever will receive an epost will have no access to an email. To reply the mail do he/she go to a post office and dictate a mail or does he/she go directly to a cybercafé. In which case won’t he be better off having an email account in that post office. No hassle for printing?