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Alice Wu

Two years after the Audit Commission called out Hongkong Post for its lack of profitability and other failings, the postmaster finally moved to fix a structural expense: staff costs. But the audit report probably wasn’t the main catalyst for change.
Rather, it was the fact the government had to ask the Legislative Council for a HK$4.6 billion (US$510 million) bailout to keep Hongkong Post operating for the next three years that forced the postmaster to act.
The crisis facing the city’s postal service has been a long time coming – snail mail has been slowing for postal services worldwide for decades, forcing changes to ensure survival.
That has included axing jobs and rethinking the purpose they serve in the 21st century. One of the most drastic moves came from Denmark where PostNord ended its letter delivery service at the end of 2025 to focus entirely on parcel delivery. The country is one of the world’s most digitalised nations, with 95 per cent of Danes fully integrated into its digital platforms. Ending its 400-year letter service was the correct move.
Obviously, that’s not the case with Hong Kong. We are nowhere near Denmark in terms of development and adoption of digital platforms. But if the government’s ambitious digitalisation plans bear fruit, Hongkong Post’s existential crisis will only deepen.
The government is pushing for more residents to use the iAM Smart one-stop digital services platform to access government services and others. Increasingly, there will be fewer letters to deliver. By the end of 2025, iAM Smart had already accumulated over 4 million users. Hongkong Post must brace itself to adapt to this irreversible trend, unless it wants the government’s digitalisation push to fail.
Adapt or die – that was the alarm sounded by the Audit Commission in 2024. Given the sluggish pace of change, the government has rightly stepped in and pledged to unveil a reform road map by 2028.




At this point, measures such as closing post offices that aren’t reaching productivity key performance indicators and securing lower rents would not be enough. Losing HK$245 million a year like the Hongkong Post did for 2024-25 is not financially sustainable.
The Post Office Trading Fund was set up in 1995 to allow the service to finance itself by using revenue from its commercial operations to offset the cost of meeting its postal obligations. The time has come for that to end – it is clear Hongkong Post can no longer self-fund its operations.
While it may be unfair to judge a public service purely through the lens of profits and losses, we must acknowledge that the postal service is facing serious competition today. We are not living in 1995.
Hongkong Post has recorded a deficit for eight consecutive years. It has, to its credit, been trying to diversify its services and markets, with a focus on cross-border e-commerce with partner countries of the Belt and Road Initiative. But revenues from such e-commerce services, for example, have fallen short of expectations. There is little indication that it can turn this around any time soon. There is just too much competition.
Civil service packages for postal staff that were affordable in 1995 are no longer cost-effective. The postmaster had no choice but to move to hire new staff on two-year contracts, instead of the full civil servant package, including pensions. Predictably, that was met with a backlash, including calls for a judicial review. Expectations were not met, for sure, but reality bites.


The postmaster general has said that all options would be considered before deciding on the right operating model, including turning Hongkong Post into a government-funded service, creating a joint venture with the private sector or privatising it. But it’s not about what suits Hongkong Post best, but what suits Hong Kong and its people best.
The fundamental question for the government is: can the postal service be both a public service and a business?
The postal service has a public duty to provide essential services at convenient locations. Its primary duty is not to generate profit. A trading fund is no longer fit for purpose.
Experiences from other parts of the world can shed light on how to separate the public service from its commercial operations. The only way forward may be to allow the postmaster to focus on fulfilling its public duties while letting others with the business acumen develop profitable products and services for the commercial operations.


How Hongkong Post can ensure it’s not boxed out of the future

Hong Kong needs clearer framework for handling high heat on work sites

Hongkong Post’s survival won’t come from belt-tightening alone

Hongkong Post should focus on public service, not profit

Hongkong Post

A woman waits at the General Post Office in Central, Hong Kong. Hongkong Post has recorded a loss for eight consecutive years. Photo: Jelly Tse

Does cash-strapped Hongkong Post need to deliver profits or just public services?

Illustration: Henry Wong

Repulse Bay Post Office serves people in an affluent part of Hong Kong. Photo: Handout

The Peak Post Office is among branches with the lowest productivity indexes. Photo: Handout

Tai O Post Office has a low productivity index. Photo: Handout

Overall postal business and mail volumes are shrinking in Hong Kong. Photo: May Tse

Fewer people are using post offices in Hong Kong. Photo: Jelly Tse

Hongkong Post scraps permanent contracts for new staff amid financial strain

The abrupt move by Hongkong Post has sparked concerns among civil servants. Photo: Jelly Tse. Photo: Jelly Tse

A decline in mail volume has prompted Hongkong Post to review staffing, delivery frequency and its network of post offices. Photo: Jelly Tse

Customers at the General Post Office in Central on Tuesday. Photo: Jelly Tse

Opinion

Hong Kong Opinion

News

Hong Kong

The traditional self-funding operating model is no longer viable in an increasingly competitive e-commerce market


The traditional self-funding operating model is no longer viable in an increasingly competitive e-commerce market.


E-commerce

Digital Transformation

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Hongkong Post should focus on public service, not profit

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The traditional self-funding operating model is no longer viable in an increasingly competitive e-commerce market

The traditional self-funding operating model is no longer viable in an increasingly competitive e-commerce market