Hong Kong’s Postal Service Faces Financial Crisis and Struggles to Adapt
In the heart of Hong Kong’s bustling Causeway Bay, a post office located within a major shopping center saw only a handful of customers during lunchtime on Thursday. For 90 minutes, while nearby restaurants and shops were packed with people rushing through their day, the post office remained largely empty. Its staff outnumbered the few customers it served, highlighting the challenges faced by Hongkong Post.
Hongkong Post, like many traditional postal services around the world, is grappling with an existential threat: how to remain relevant in an era dominated by digital communication and efficient logistics companies that have taken over parcel deliveries. The decline in demand for traditional mail has left the organization struggling financially.
In the 1997-98 financial year, Hongkong Post earned HK$1.23 billion in profit. However, over the past eight financial years, the self-financed government department has accumulated HK$2.9 billion in losses. To address this crisis, the government proposed a lifeline of HK$4.6 billion to sustain the service for the next three years. This funding aims to provide breathing room while cost-saving measures are implemented and new revenue streams are explored.
At the shopping center branch, Sherry Wong, a 30-year-old office clerk, said she only visited the post office to file tax returns for her colleagues. She previously used the service to pick up parcels from online retailers but found the process inconvenient. “The business hours are not so friendly for us office workers, as the branches close at 6pm, when we get off work,” she explained.
Eva Yu, a 60-year-old office clerk, visits the post office once a year to mail tax returns. She compared the delivery prices of Hongkong Post and other companies, finding the former to be more expensive. Local CourierPost, the government arm’s express document delivery service, charges HK$37 for an item weighing no more than 500 grams for non-account users. In contrast, private operator SF Express charges just HK$18 for local door-to-door document delivery.
An earlier report by the Audit Commission criticized Hongkong Post’s uncompetitive pricing, which was cited as a contributing factor to its sluggish business. The department attributed the issue to various factors, including remuneration policies and procurement procedures. However, some customers still prefer the government service for its perceived reliability and confidentiality.
A “half-retired” man in his sixties, surnamed Wai, said he still preferred Hongkong Post because he felt it offered better confidentiality. “Hongkong Post is a government branch and it will be safer. Especially when sending important documents, I do not want a private company to process my sensitive data,” he said. He also praised the long-distance mail service for being reliable and reasonably priced.
Many customers interviewed by the South China Morning Post expressed the view that the government should ensure the postal service provider continues to operate. While they may use it only rarely, they noted that its services might be needed by others, such as elderly residents.
In addition to sending letters and parcels, residents can use the post office to settle government and utility bills. Elderly residents can also withdraw cash via the EPS payment system under the “EasyCash” initiative. Staff members can help residents set up their iAM Smart and eHealth accounts, the government’s one-stop identity and medical record systems.
At the King’s Road Post Office in Fortress Hill, queues occasionally formed, but similar to the Causeway Bay branch, many customers were simply mailing tax returns or settling utility bills. Tina Lam, a 50-year-old office clerk, came to buy stamps. “I prepared some stamps in advance as I sometimes send local letters and celebratory cards to friends,” she said. For Lam, physical cards for special occasions were worth the extra effort in the digital age.
According to a document submitted to the Legislative Council by the Commerce and Economic Development Bureau, Hongkong Post’s cash reserves could cover its operations for less than a year. Since the establishment of the Post Office Trading Fund in 1995, which manages its operations, Hongkong Post has operated on a self-financing basis.
The volume of mail processed by Hongkong Post has plummeted from more than 1.1 billion items in 2019-20 to 611 million in 2024-25, a decline of 44.5 per cent. The bureau warned that this drop is expected to continue or even worsen in the years to come.
Despite these challenges, the bureau stated that Hongkong Post is actively exploring emerging markets, focusing on developing postal logistics business in regions with growth potential, including nations under Beijing’s Belt and Road Initiative, as well as ASEAN and Middle Eastern countries.
Lawmakers are scheduled to discuss the matter next Tuesday at a meeting of the panel on economic development.
