The story of the postman cycling to a house in a moffusil town has taken a new turn. He is now a part of the soaring e-Commerce industry in the country.

With major e-Commerce players like Amazon, Flipkart and Snapdeal using the postal department to send their parcels, India Post has got a new lease of life with the department's revenue in the sector recording a growth of more than 36 per cent in the last year. A major USP for India Post, the COD value – which was Rs 280 crore till November 2014 – crossed Rs 500 crore by March this year, according to official sources.

Sources said that while in big cities these e-retailers had their own delivery chain or have tied up with courier services, in smaller towns and villages they are now depending on the postal department. Similarly, unlike in cities where vans are made use of to deliver items, in the villages it was the post man who made the last mile delivery. India's postal network is the largest in the world with over 1,54,000 post offices, of which nearly 1,39,000 are in rural areas.

India Post, which provides last mile services to e-retailers to send business parcels, speed posts and express parcels, has set up nodal delivery centres in cities like Bengaluru, Chennai and Hyderabad for faster delivery. It seems, even as the e-retail business was eying rural market penetration, the government too has decided to revamp the department and exploit its widely entrenched network of post offices.

According to official statistics, Amazon started with one location in 2013 and increased to six by March 2015. Yepme sends around 89,000 parcels a month to Gurgaon. Snapdeal's booking locations have increased to nine, from earlier five, with 40,000 articles per month. Naaptol's business was more than Rs25 crore a year and Flipkart provided 30,000 articles per month. In the last four months alone, 53 lakh articles were handled in six metros.

While chairing a review meeting on the issues relating to setting up of Post Bank, Mail delivery, and e-Commerce, at the Dak Bhawan recently, Minister of Communications and Information Technology Ravi Shankar Prasad encouraged efforts to enhance capabilities to book, process, transmit and deliver e-commerce articles.

"By doing so, the department can easily become a market leader in domestic e-Commerce delivery segment," he said. Prasad asked senior officers in Postal Circles to have one-to-one meeting with e-Commerce players operating in their areas to obtain their feedback about the services and undertake immediate remedial action wherever required.

Meanwhile, the Speed Post revenue has registered a growth of seven percent from Rs 1,372 crore to Rs 1,470 crore, including Speed Post parcel segment. This, according to the sources, compensated for declining document segment, a trend across postal administration, to some extent.