Kirja edastamine

INFORMATION TO BE PROVIDED IN REQUESTS CONCERNING THE APPLICABILITY OF ARTICLE 34 OF DIRECTIVE 2014/25/EU

1. Section 1 — Identity and status of applicant

Article 35 of Directive 2014/25/EU provides that requests concerning the applicability of Article 34 are to be made by the Member States or, when the legislation of the Member State concerned provides for it, by the contracting entities. Depending on the case, the term ‘applicant’ may refer therefore to either the Member State or the contracting entities. It is used merely in the interest of simplification.

1.1. Full name and address of the applicant:

(1) Name: Ministry of Finance

(2) Address: Suur-Ameerika 1, Tallinn, 10122, Estonia

In the event that the activity covered by this request is carried out by undertakings affiliated (1) to the applicant, the term ‘applicant’ will be deemed to refer to both the entity indicated in point 1.1 and the affiliated undertakings in question. Thus, in particular for sections 5 and 6 below, it will be necessary to supply the requisite information for the ‘applicant’ as thus defined.

1.2. Status of the applicant: contracting authority (2), public undertaking (3) or private undertaking?

(3) The applicant is a contracting authority. For clarity, the applicant for the purposes of the current

request is represented by the Ministry of Finance.

(4) Eesti Post (hereinafter “Eesti Post”), which is fully owned by the Ministry of Regional Affairs and

Agriculture, in turn is the parent entity of the following legal entities:

(a) OÜ Finbite, an undertaking registered in Estonia with the registry code 16077631. OÜ

Finbite is active in the provision of payment solutions. More information on Finbite can be

found on its website here.

(b) OÜ Omniva – an undertaking registered in Estonia with the registry code 12670875. OÜ

Omniva did not generate any revenue during 2022.

(c) Picapac OÜ, an undertaking registered in Estonia with the registry code 12670875. Picapac

OÜ is a subsidiary of Eesti Post AS, specializing in the development of software and

hardware for parcel machines and related services.

(d) UAB Omniva LT, an undertaking registered in Lithuania, with the registry code 300087912.

UAB Omniva LT provided postal services in Lithuania and provides inputs for the

international activities of Eesti Post.

(e) UAB Omniva LT Sorting, an undertaking registered in Lithuania with the registry code

306053678. UAB Omniva LT Sorting was established with the aim of providing sorting

services in the Kaunas Free Economic Zone. Its main activity has been the establishment

of the Kaunas parcel sorting terminal.

(f) SIA Omniva, an undertaking active registered in Latvia, with the registry code

40103527192. SIA Omniva is active in the provision of postal services in Latvia.

(5) Eesti Post is the sole undertaking carrying out activities referred to in Directive 2014/25/EU.

However, under national law, it does not have the authority to submit a request under Article 35

on its own. Therefore, the request is submitted by the State, as represented by the Ministry of

Finance.

1.3. For a contracting authority: are you making the request for and on behalf of your Member State?

(6) As described under recitals (3)-Error! Reference source not found. above, the request is

submitted for and on behalf of Estonia. Information requested under sections 2 – 6 will be outlined

in respect to Eesti Post as the sole entity carrying out the activities covered by this request.

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Accordingly, references to "the applicant" in the text below should be understood as referring to

Eesti Post.

If so, please supply the information requested for each point in sections 2 to 6 inclusive. With regard to each point in sections 5 and 6 in particular, please provide the requisite information for each of the entities carrying out the activity covered by this request. However, where there are a large number of such entities, the information may be restricted to those entities holding 10 % or more of the geographical market in question (4). Where the information is similar or identical for several entities, they may be grouped together, on condition that this is specified.

1.4. For contracting entities (the contracting authorities, the public undertakings and the private undertakings carrying out one of the activities referred to in Directive 2014/25/EU (5)): Please state the provision of national law stating that contracting entities may submit a request under Article 35.

(7) Estonian national law does not enable Eesti Post to submit a request under Article 35 on its own.

2. Section 2 — Description of the activity covered by this request

2.1. Describe the activity to which the conditions of Article 34(1) (6) apply in your view. The activity concerned may form a part of a larger sector (7) or be exercised only in certain parts of the Member State concerned.

(8) The request is submitted in relation to postal services as outlined under Article 13 of Directive

2014/25/EU. The applicant maintains that as per its best assessment and the past practice of the

European Commission in similar cases, the activities outlined below are directly exposed to

competition for the whole territory of Estonia.

(9) In particular, the following activities are covered by this request:

(a) International parcel services (inbound, outbound);

(b) Domestic parcel delivery services (express, standard);

(c) Printing services and packaging services;

(d) Third- and fourth-party logistics services (international business).

(10) In relation to third- and fourth-party logistics services, the applicant notes that the majority of the

business of that segment as carried out by Eesti Post is covered by the exclusion stipulated under

Article 7 (d) of Directive 2014/24/EU. However, since Eesti Post is providing the services in

combination with some postal functions, the applicant has included such services within this

request.

(11) The applicant further notes that while postal functions can arguably be at time considered

marginal, the share of postal to non-postal functions changes over time, given the unpredictable

nature of postal logistics in recent years due to both the COVID-19 pandemic and the war in

Ukraine. Consequently, the applicant prefers to include logistics services in the request as the

activity is clearly directly exposed to competition – Eesti Post is a marginal player in this segment

as postal services make up a marginal share of the logistic services provided by Eesti Post (about

less than 10%).

2.2. Where this differs from the national territory as a whole, indicate the area in which the activity covered by this request is carried out. Mention only the area in which you consider that the conditions of Article 34(1) are met.

(12) The applicant notes that other than for third- and fourth-party logistics services, all other services

are provided at least in the territory of Estonia as a whole. In respect to third and fourth-party

logistics services, such services are not provided within Estonia at all and are provided within the

territory of the EU.

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3. Section 3 — The relevant market

A relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer, by reason of their characteristics, their prices and their intended use (8).

The following factors are normally considered to be relevant to the determination of the relevant product market and should be taken into account in the analysis (9):

— the own- and cross-price elasticities of demand of the relevant products and/or services,

— any differences in the end use to which the products are put,

— differences in price between two products,

— the cost of switching from one product to another, in the case of two potentially competing products,

— established or entrenched consumer preferences for one type or category of product,

— product classifications (classifications maintained by trade associations, etc.).

The relevant geographical market comprises the area in which the entities concerned are involved in the supply and demand of products or services, in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring areas because, in particular, conditions of competition are appreciably different in those areas (10).

Factors relevant to the assessment of the relevant geographical market include (11):

— the nature and characteristics of the products or services concerned,

— the existence of barriers to entry,

— consumer preferences,

— appreciable differences in market shares or substantial price differences between neighbouring areas,

— transport costs.

3.1. In the light of the above, please explain the definition of the relevant product market or markets that, in your opinion, should form the basis of the Commission's analysis.

In your reply, please give reasons for assumptions or conclusions, supported by appropriate empirical evidence (12), and explain how the factors outlined above have been taken into account. In particular, please state the specific products or services directly or indirectly affected by this request and identify the categories of products considered as substitutable in your market definition.

In the questions below, this (or these) definition(s) is (are) referred to as ‘the relevant product market(s)’.

Introduction to the Estonian postal sector

(13) As described under recitals (9) above, this request contains the following postal services in

Estonia:

(a) International parcel services (inbound, outbound);

(b) Domestic parcel delivery services (express, standard);

(c) Printing services and packaging services;

(d) Third- and fourth-party logistics services (international business).

(14) In response to question 2 of the European Commission’s RFI dated October 24, 2024, the

applicant explains that as of the end of 2023, the Estonian Competition Authority's annual report

on the postal sector indicates that there were 59 registered postal service providers in the Register

of Economic Activity. It is important to note that many of these providers offer multiple types of

postal services, and not all are active or operational. While Eesti Post does not have a precise

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breakdown of active competitors in each service segment covered by the exemption request, the

table below from the Competition Authority's report provides a summary of postal service

providers by service type based on data from the Register of Economic Activity:

Postal Service1 2019 2020 2021 2022 2023

Universal postal service 1 1 1 1 1

Dispatch of letter items as ordinary, registered, and value-

added mail 2 2 2 2 2

Dispatch of parcels as ordinary, registered, and value-added

mail 1 1 1 1 2

Courier service 49 49 49 48 48

Direct mail service 7 7 6 6 6

Dispatch of periodicals 7 7 6 6 6

Other postal services 14

14 14 14 14

(15) Based on available public information, Eesti Post estimates that the 48 active courier service

providers (as of 2023) most closely align with the business segments covered by the exemption

request, i.e. these providers offer a range of services, including both national and international

parcel delivery, as well as express and standard options. The active courier service providers

listed in the Competition Authority’s report include: Bolt Operations OÜ, AS Eesti Post, A-Kuller

& Partnerid, AS Express Post, AS DPD Eesti, OÜ EKLT, DHL Express Estonia AS, SmartPosti

Estonia OÜ, FedEx Express Estonia AS, T Grupp OÜ, Autopost Terminal OÜ, Aberg Express

OÜ, Euroxkuller OÜ, Venipak Eesti OÜ, DK Logistics OÜ, Jet Express OÜ, OSC Transport OÜ,

Balti Logistika AS, K Security OÜ, FamLogistics OÜ, and Nova Post Estonia OÜ.

(16) Regarding the specific segments covered by this exemption request, Eesti Post notes that all

Eesti Post’s major competitors are active in the relevant postal segments to a significant extent.

While a few competitors, such as Bolt, are only active in domestic courier services (i.e. domestic

express parcel delivery), the low market barriers in this segment allow other competitors to enter

and expand their operations in this area if desired.

(17) In the light of above, the applicant explains that the Estonian postal sector, in particular in respect

to services outlined in this request, is characterised by relatively strong competition, with a number

of strong market players present. Outside of the services covered under this request, the

competition on the market is somewhat limited, as an example due to the presence of a single

market player providing Universal Postal Services (hereinafter “UPS”).

(18) As is the industry trend across the EU, revenues attributable to services traditionally part of UPS

services are rapidly decreasing with revenues decreasing 3,2% year-to-year during the year

2020, with volumes decreasing by 22,5% during the same timeframe. In the same period, in 2020,

Eesti Post's turnover in UPS with item content decreased by 8% (7% when normal letters are

included) and volumes decreased by 21% (10% including letters). In 2021, Eesti Post's UPS

turnover increased by 2% (1% with letters) and UPS volumes decreased by 20% (16% including

1 Report of the Competition Authority on developments and emerging issues in the postal services sector, as

well as the activities of the Competition Authority in this field in 2023. Link:

https://www.konkurentsiamet.ee/media/916/download. Please refer to the table on page 3 of Competition

Authority’s report.

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letters). In 2022, the corresponding turnover of Eesti Post decreased by 22% (23% including

letters) and volumes by 43% (38% including letters).

(19) The applicant notes that the decreased volumes are on one hand partially attributable to a

significant decrease in letters sent by customers in favour of e-mails as well as new alternative

business models of private entities competing with services provided as part of UPS. This is in

particular so with international maxi letters (which can in essence be treated as small parcels from

a customer perspective) with an item content of up to 2kg. While Eesti Post provides such services

using the Universal Postal Union (hereinafter “UPU”) network, Eesti Post has in the last few years

noted appreciable decline in market share in favour of alternative business models competing

with the network provided by UPU. This is also reflected in the market data provided by Eesti Post

under section 5, where the share of maxi letters has significantly decreased, while the share of

parcels moving though alternative networks has increased.

(20) In respect to services not part of UPS (and thus subject to much more limited regulative

frameworks), the applicant explains that due to the size of Estonia and its close ties to its

neighbouring EU member states, the postal sector is highly competitive, with all of the major

market players having activities in all three Baltic states (Estonia, Latvia and Lithuania) as well as

Finland. Such market developments are largely the result of major international clients (Amazon,

About You, Wish, AliExpress, Ebay) who are looking towards a regional supplier in the Baltics

covering all of the aforementioned EU member states. As such, the market shares of the major

players are dynamic and may appreciably change year to year (even month to month). Significant

changes in market shares are very likely due to loss or gain of contracts with particular

international online retailers.

(21) This is noted by e.g. the changes of market shares of the main market participants in relation to

parcels in Lithuania between 2020 – 2023, as outlined in the graph below:

(22) While the changes in the above graph remain around +-10% within 1 quarter, the changes can

be more significant if the origin of the parcel is taken into account. E.g. For Eesti Post and due to

holidays, the year-end China based volumes have traditionally seen an uplift during the last few

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months of the year. Due to a loss of contracts, both Latvian and Lithuanian delivery volumes for

Eesti Post have seen a significant reduction, as noted for Lithuania:

Month (2023) Latvia Lithuania

January 134687 74375

February 70071 84527

March 100123 132606

April 98035 116267

Mai 88846 91651

June 68003 266305

July 73810 280956

August 62264 353057

September 68003 276558

October 73810 334796

November 60014 102956

December 83564 128285

(23) Lasty and in particular for postal services offered within Estonia, the Estonian postal sector is

strongly impacted by a general focus of the population on IT services. While this focus was clearly

apparent amongst the younger part of the population prior to the COVID-19 pandemic, the

reduced physical access to postal offices and limitations on movement arising from measures to

mitigate the impact of the COVID-19 pandemic significantly increased the adaptation of smart

postal services that require no physical contact. For the purposes of Eesti Post, the change in the

behavioural habits of customers and limitations arising from the obligations outlined under

Directive 2014/25/EU, resulted in a significant competitive disadvantage, since due to the

obligations outlined under Directive 2014/25/EU, it is not able to effectively compete with its

competitors, therefore losing business to its competitors and being unable to match their growth.

This has been further outlined in detail under Section 5B of the application – Domestic courier

and express parcel services.

(24) For clarity, the applicant has limited this request to services part of product markets where Eesti

Post is subject to strong competition.

Overview of Licensing and Registration Requirements for Postal Services in Estonia

(25) In response to question 1 of the European Commission’s RFI dated October 24, 2024, the

applicant notes that for the services covered by the exemption request, a license is not required.

However, companies are obligated to notify the Estonian Competition Authority

(Konkurentsiamet) upon the start of their business activities. This notification is a simple process,

without complicated procedures, and does not create any barriers to entry for potential

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competitors. In Estonia, the provision of postal services is primarily governed by the Postal Act

(postiseadus), which sets forth the requirements for both licensing and registration, depending on

the type of service being provided.

(26) As regards Eesti Post and its competitors, the business segments governed by the exemption

request, i.e. markets for services related to the delivery of parcels, does not overlap with the

traditional postal services that require a licence. While Eesti Post holds licences for certain

services; in the segments of express mail, direct mail, and parcel delivery (as part of letters

delivery), they (and other competitors) operate under the business activity declaration regime,

meaning they are registered rather than licensed.

(27) More specifically, a business licence is required for providing certain types of traditional postal

services, particularly for the delivery of letters (outlined under article 10 of the Postal Act). For

services that do not fall under the category of traditional letter delivery (such as parcels, express

mail, direct mail, etc.), there are no specific licensing requirements, but there are registration

requirements (outlined under article 21 of the Postal Act) instead. More specifically, operators

offering certain postal services are required to submit a business activity declaration to the

Estonian Competition Authority, which registers the service provider. These services include:

(a) Express mail services;

(b) Direct mail services;

(c) Delivery of periodical publications;

(d) Other postal services that do not involve the delivery of standard letters.

1.1.1. Overview of services concerned by this request

(28) This request contains the following postal services in Estonia:

(a) International parcel services (inbound, outbound);

(b) Domestic parcel delivery services (express, standard);

(c) Printing services and packaging services;

(d) Third- and fourth-party logistics services (international business).

(29) The applicant explains that Eesti Post is the only entity active in the postal sector in Estonia,

subject to public procurement rules.

1.1.2. International parcel services (inbound, outbound)

(30) In its past practice, the Commission has on several occasions assessed the market for parcel

services, explaining that parcel services can be segmented into standard and express parcel

services. The Commission explained that express services are faster and more reliable than

standard services and standard and express services requires different infrastructure in order to

enable additional value services, such as more advanced tracking. In practice, this leads to a

difference in price between standard and express services, with express services being more

expensive.2

2 See, e.g. Commission Decision of 27 May 2020, on the applicability of Article 34 of Directive 2014/25/EU of the

European Parliament and of the Council to contracts awarded for activities related to the provision of certain postal

services in Denmark (notified Under document C(2020) 3335), para 15.

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(31) In addition to a potential segmentation between standard and express parcel services, the

Commission has previously assessed the standard parcel services market, considering potential

market segments based on (i) domestic and international parcel services,3 and (ii) consumer and

business parcel services4.

(32) In relation to the segmentation between domestic and international parcel services, the

Commission has previously explained that domestic parcel delivery services are provided by

companies operating a distribution network at national level, with international outbound mail

deliveries involving the collection, international transportation and delivery of parcels through an

entirely different network. This means that international outbound delivery normally engages two

services providers: one in the collection country and another in the destination country. In the

collection country, a company collects the parcels for transport to several destination countries,

followed by the same or another company then distributing the parcels to its final destination in

the destination country.5

(33) In relation to a segmentation between consumer and business parcels, the Commission has

explained that consumer and business parcels should be considered apart, since they satisfy

different needs of demand, and the technological process of this service usually differs

significantly.6 In particular, the Commission has explained that services provided to consumers

are generally provided under the public service obligation, requiring a network of post offices

available to consumers. Within the business parcel services segment, the Commission has further

considered a potential segmentation between B2B (Business to business) and B2C (business to

consumer) deliveries, explaining that from the supply side perspective, B2C deliveries requires a

denser network to reach private consignees, as opposed to business consignees, who are often

located in dense clusters.7

(34) The applicant notes that in line with the previous practice of the Commission, the product market

for standard parcel services should also be segmented between domestic and international

parcels for Estonia. The applicant explains that while in Estonia, both domestic and international

standard parcel services use the same national infrastructure (predominantly parcel machine

networks), international standard parcel services also require agreements to provide cross-border

services, which are not required in order to provide parcel services on a national level.

(35) In particular, the collection and acceptance of domestic and international parcels takes places

with the same infrastructure – i.e. parcel machines or courier. For clarification and in response to

question 4 of the European Commission’s RFI dated October 24, 2024, "parcel machine

networks" refer to the integrated systems of automated parcel collection and delivery points

located throughout Estonia. These networks facilitate the convenient pickup and drop-off of

parcels for consumers and businesses, using self-service kiosks or lockers that are accessible to

users. The significance of these networks lies in their role as an infrastructure that supports both

domestic and international standard parcel services. Illustrative examples of the automated parcel

collection and delivery points are the following:

3 Ibid, para 16. 4 Ibid, para 17. 5 See e.g. case COMP/M.5152 – Posten AB / Post Danmark A/S, para 55. 6 Ibid, para 59. See also Commission decision of 3 March 2010, exempting certain services in the postal sector in

Austria from the application of Directive 2004/17/EC of the European Parliament and of the Council (notified under

document C(2010) 1120), para 8. 7 Ibid, para 18.

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Source: Daily newspaper Postimees. New Option for Parcel Pickup.

https://jarvateataja.postimees.ee/7755536/lisandus-veel-uks-postipaki-kattesaamise-voimalus

Source: https://www.linkedin.com/posts/veskimeister_i-took-this-random-picture-on-june-

192024-activity-7261677365959806977-jK9W/?utm_source=share&utm_medium=member_ios

For domestic shipments, the market participants are able to continue using the same

infrastructure, without the needing to access the parcel infrastructure of third parties. For

international shipments however, due to the lack of larger international parcel networks, the

market participants must enter into agreements with third parties to gain access to those

networks. Traditionally, most market participants operating in Estonia have the option to choose

with relative ease on what third party network to use. This is because in order to compete with

larger i.e. global market players, it is vital to be able to seamlessly opt for the best network for a

particular parcel. One caveat being parcels that are limited to the Baltics. Most market participants

are active across all three Baltic member states and are thus able to use their own networks for

parcels limited to the Baltics. That said in practise a small amount parcels originating from one

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Baltic State to another still use third party services, if the market participants network is not able

to provide services at a desired quality level; i.e., Eesti Post has historically also used the

networks of its competitors for last mile deliveries in e.g. Latvia and Lithuania

(36) In respect to a potential segmentation between consumer and business parcels, the applicant

explains that this segmentation is of limited relevance for Estonia. In particular, standard parcel

services in Estonia are provided predominantly through parcel machine networks, which is not

part of the universal postal service obligation. As a result, the network used to provide services

to businesses and consumers overlaps. Furthermore, Estonia is a small and very sparsely

populated country, meaning that contact points for both consumers and business are located in

population centres, since there is little incentive to expand a parcel machine network into sparely

populated areas, where only a few potential consumers reside.

(37) For clarity, while some consumer parcels still use the network used for the universal postal service

obligation (in particular maxi letters with an item content of up to 2kg), this share of services is

continuously declining (see table 4 under Section 5A), since even with subsidies supporting the

upkeep of the post offices network, the service is less convenient for the consumer as compared

to parcel machines (parcel machines are more widely available with better opening hours (if not

accessible at all times). As a result, while currently costumers for parcel services fluctuate towards

using parcel machines, the maxi letters with an item content of up to 2kg remain an alternative in

Estonia to international standard parcel services, despite such services being only provided by

Eesti Post in Estonia. Maxi letters with an item content of up to 2kg being part of the international

parcel services market is also illustrated by the fact that currently approximately 95% of the

volumes in maxi letters with an item content of up to 2kg is related to e-commerce. As such the

applicant believes that maxi letters with an item content of up to 2kg should be considered part of

the international parcel services market.

(38) In conclusion, the applicant notes that the relevant product market for the purposes of this

application should be considered the provision of international standard parcel services in

Estonia, which includes the provision of both international standard parcel services using the

parcel machine networks as well as the provision of maxi letter services (with an item content of

up to 2kg).

(39) For clarity, the applicant explains that while in Estonia, only Eesti Post provides international maxi

letter services, there is significant pricing pressure arising from international parcel services. This

is because the provision of international maxi letters engages two service providers, as is the

case with standard international parcel services. In the past (and as has been pointed out in the

previous practice of the Commission8) some isolation from competition was available due to maxi

letters moving only through the Universal Postal Union network, which was accessible only to

postal operators providing the universal postal service obligation. The applicant explains that this

is no longer the case in Estonia.

(40) Firstly, Estonian legislation does not require international maxi letters to move using only the

UPU9 network. This means that the parcels (in the form of a maxi letter) may enter through the

post office network in Country A, however after that, the parcel can move into the international

parcel network as do other similar parcels. This works both ways – i.e. parcels which have initially

entered in their country of origin through the post office network, may be delivered in a parcel

machine in Estonia – provided the legislation in the country of origin allows for this (and to the

extent that the applicant is aware, most do).

8 See recital (32) above. 9 See here: https://www.upu.int/en/home

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(41) Secondly, internationally, there are also similar competing options for postal operators outside of

the UPU network. In particular, the applicant explains that historically, letters with an item content

up to 2kg were moved via the networks used for international letters, in particular the network

provided by UPU. This was largely due to previous very low pricing of such parcel services,

meaning that private entities had no interest in services which directly competed with maxi letters

with an item content of up to 2kg. Due to the pricing reform (leading to increased pricing of the

services) initiated in the United States in 2019, the resulting increased prices attracted private

entities to develop similar business models to service mainly e-commerce customers, thereby

replicating the network provided by the UPU (e.g. Prime Tracked10, Interconnect Economy11),

allowing entry of new market participants and significantly increasing competition on the market.

(42) For conclusion and in response to question 11 (a) of the European Commission’s RFI dated

October 24, 2024, maxi letters, as offered by Eesti Post, are considered to compete with ordinary

postal parcels in the same product market. Both maxi letters from Eesti Post and small parcels

from competing postal service providers are similar in terms of size and functionality. The prices

of maxi letters are regulated by the Competition Authority. In practice, the price regulation for maxi

letters is cost-based, and since prices for comparable postal products are also primarily cost-

driven (margins are low), the price levels for maxi letters and similar postal items are generally

comparable. However, it is worth noting that over the years, the volume of maxi letter shipments

has been gradually decreasing, with a corresponding increase in the popularity of small parcels.

This trend suggests that maxi letters may not be as competitive as small parcels in the current

market. Eesti Post attributes this shift to the inflexibility of regulation and the slow adjustment of

pricing to market changes.

(43) As a result, the applicant notes that the provision of international maxi letters with an item content

of up to 2kg competes directly on the market with other international standard parcel services and

should belong on the same product market as those services.

1.1.3. Domestic standard and express parcel services

(44) The Commission has held in previous decisions that the market for mail delivery services can be

segmented into express and standard delivery services.12 Further, the Commission has also

considered the express and courier parcel services as one product market.13

10 See here: https://www.prime-posts.com/what-we-do/prime-tracked/ 11 See here: https://www.ipc.be/services/e-commerce-solutions/interconnect 12 See Commission implementing decision (EU) 2019/1204 of 12 July 2019 concerning the applicability of Directive

2014/25/EU of the European Parliament and of the Council to contracts awarded for certain activities related to the

provision of certain postal services and other services than postal services in Croatia (notified under document

C(2019) 5194)

COMMISSION IMPLEMENTING DECISION of 22 March 2013 exempting certain services in the postal sector in

Hungary from the application of Directive 2004/17/EC of the European Parliament and of the Council coordinating

the procurement procedures of entities operating in the water, energy, transport and postal services https://eur-

lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32013D0154&from=EN 13 COMMISSION DECISION of 16 March 2007 establishing that Article 30(1) of Directive 2004/17/EC of the

European Parliament and of the Council coordinating the procurement procedures of entities operating in the water,

energy, transport and postal services sectors applies to certain courier and parcel services in Denmark. https://eur-

lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32007D0169&from=ET. In relation to this decision and in

response to and in response to question 5 (a) of the European Commission’s RFI dated October 24, 2024, the

applicant explains that in the opinion of the applicant, the Commission’s approach indicates that the Commission

has treated courier and express parcel services as a single market in its analysis. Thus, it is reasonable to conclude

that the Commission may see these markets as interconnected, rather than separate. For further discussion

regarding Commission Decision of 16 March 2007, please refer to the applicant’s response to question 5 (a) of the

European Commission’s RFI dated October 24, 2024.

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(45) The Commission explained in its previous decisions that the segmentation between standard and

express parcel services takes into account that express services are faster and more reliable than

a standard service, that each of those services requires a different infrastructure and that express

services compromise additional value-added services features, such as track and trace services

and are usually also more expensive.

(46) In its previous decisions, the Commission has also made a distinction between domestic and

international parcel delivery services.

(47) The applicant agrees with the past practise of the Commission and explains that in Estonia, parcel

services are offered either as courier services or through drop-off points, i.e. parcel machines. It

is in particular the parcel machines which are increasingly popular in Estonia and customers often

consider them as interchangeable to courier services. Further, all services are provided in Estonia

as same day or T+1 type services, where delivery takes place either on the same day from the

parcel being handed to the service provider or on the next day. This is regardless of whether the

service falls under the standard or express delivery segment under the Commissions previous

practise. This in turn makes the distinction between standard and express services as redundant

in Estonia, in particular in terms of demand substitutability.

(48) As example, it is common practise that even if the delivery is ordered by the customer as “express”

– i.e. pick-up and delivery by courier, the customers still often substitute the delivery in favour of

a parcel machine in practise, due to the ease of pickup (customer may not be at home when

courier arrives).

(49) In terms of supply substitutability, while there are some differences between the costs related to

express and standard parcel service, these are often related to volumes transferred. I.e. From a

collection point of view both express and standard services involve the arrival of a courier to a

pickup location. If the volumes match, then the cost per parcel is also comparable and similar. In

practise, the volumes however vary and on average more parcels are picked in a standard parcel

scenario as compared to an express parcel scenario (1-2 parcels by a courier with express parcel

services (on average) versus 10 parcels picked up on average by a courier in relation to standard

parcel service).

(50) The main cost difference comes in relation to delivery, however as noted there is very strong

demand side substitutability in respect to the delivery express and standard parcel services,

leading to a situation where all market participants are increasingly expected to have access to

standard parcel delivery infrastructure (i.e. parcel machines). The applicant has provided a

comparison between the average costs of standard parcel services and express parcel services

for clarity below.

Activity group Standard parcel

services

Express parcel

services

Collecting 0,10 0,48

Customer service 0,03 0,03

Delivery 0,28 1,02

Sales 0,25 0,25

Sorting 0,08 0,08

TOTAL Direct cost 0,74 1,86

(51) Nevertheless, if a distinction is made between standard and express services, the standard parcel

services would be composed of services using a parcel machine for final delivery and express

services as services using courier services for final delivery. In any case, the applicant believes

13 (94)

that the Commission can leave the final product market definition open, since the services would

be open to competition regardless of the above segmentation.

(52) For fullness of information, the applicant explains that traditional parcel markets are facing

increased competition from delivery platforms, offering same day, even same hour delivery, such

as Bolt14 and Wolt15. In contrast to traditional postal service, where even express delivery takes

up to 24 hours, the delivery platforms are able to organise delivery generally within an hour of the

customer making the purchase. Since Eesti Post is not active in such deliveries, such services

have currently not been included as part of the product market – however such services do enact

competitive pressure on more traditional domestic parcel services.

(53) In response to question 4 of the European Commission’s RFI dated October 24, 2024, the

applicant provides an elaboration and conclusion on demand-side substitutability and supply-side

considerations between standard and express parcel services as follows:

Demand-Side Substitutability

- Interchangeability of Services: In Estonia, customers increasingly view parcel

machines as interchangeable with courier services due to factors like convenience and

accessibility. For instance, many customers prefer parcel machines even for express

deliveries because they allow for easy pickup without needing to be home at the time of

delivery.

- Similar Delivery Times: Both standard and express services often operate on similar

timelines, with many deliveries occurring on the same day or the next day. This overlap

reduces the perceived differences between the two service types for consumers,

supporting the idea that they can be used interchangeably.

- Consumer Preferences: The growing popularity of parcel machines indicates a shift in

consumer preferences toward services that prioritise convenience, further supporting the

argument for demand-side substitutability.

Supply-Side Considerations

- Cost Structures: While there are differences in costs between standard and express

services, these differences are often volume-dependent. In practice, the cost per parcel

can align when the volumes are similar.

- Flexibility due to similar infrastructure: Companies providing both types of services

can adjust their operations based on demand. If demand for express services decreases,

providers can shift to enhance their standard service offerings without significant changes

to their infrastructure.

- Market Dynamics: The availability of alternative delivery options, like platforms (i.e. Bolt

or Wolt in Estonia) that provide fast service, adds competitive pressure to both standard

and express markets.

14 https://bolt.eu/en/cities/tallinn/ 15 https://wolt.com/en/est

14 (94)

(54) Further in response to question 4 of the European Commission’s RFI dated October 24, 2024,

regarding the similarities and differences between standard versus express parcel delivery

services, the applicant presents the following overview:

Demand-Side Considerations

Factor Similarities Differences

Importance of Delivery Time Both express and standard

services appeal to customers

who value certainty about

delivery time.

According to the Case M.7630 -

FEDEX / TNT EXPRESS,

express customers place a

higher emphasis on guaranteed

delivery within a specific

timeframe, while standard

customers are willing to accept

less urgency in delivery timing.

Although, as discussed under

recital 188, Eesti Post's internal

data reveals that parcel

machines (i.e. standard service)

demonstrate higher reliability

and efficiency in delivery speed

compared to couriers (i.e.

express service).

Switching Behaviour (Price

Sensitivity)

Both services are influenced by

price changes. Customers are

willing to shift between services

depending on price differences.

According to the Case M.7630 -

FEDEX / TNT EXPRESS,

customers are more willing to

switch from standard to express

if prices increase but are less

likely to switch from express to

standard even in the event of

price hikes. In contrast,

according to the applicant,

Estonian customers tend to

switch to standard services

when prices increase,

highlighting a regional

difference in price sensitivity

and service preference.

Service Appeal (Customer

Preferences)

Both services offer guarantees

such as track-and-trace.

According to the Case M.7630 -

FEDEX / TNT EXPRESS, the

standard product appeals to

customers who are willing to

trade speed for cost savings.

Express services are seen as a

premium offering for those who

prioritize speed, certainty, and

reliability over cost. Although, as

discussed under recital 188,

Eesti Post's internal data

reveals that parcel machines

(i.e. standard service)

demonstrate higher reliability

15 (94)

and efficiency in delivery speed

compared to couriers.

Supply-Side Considerations

Similarities Differences

Delivery chain: all the key stages of the delivery

chain such as pick-up and delivery haul, sorting,

ramp and customs clearance are the same for the

majority of express and standard deliveries.

Cost Structure: Express services typically incur

higher costs due to the service level offered.

Service Features: Basic tracking is available for

both services.

Service Flexibility: Express services often

provide more delivery options and tracking

capabilities than standard delivery.

Infrastructure: Both types use similar logistical

networks. All integrators use the same network to

ship both express and deferred products.

Market dynamics for consumers: Both are

influenced by customer demand for delivery

speed and service reliability.

1.1.4. Printing and packaging services for mail items

(55) The Commission has previously considered a separate product market for printing and packaging

services.16 The Commission explained that printing and packing services are offered as a

package of services for mass delivery which is a common practice in relation to mass

correspondence. The package includes, among other things, receipt of documents, printing,

enveloping and foliation, packaging. In order to increase cost efficiency, such internal processes

are often outsourced by companies to third parties.

(56) The applicant agrees with the earlier practise of the Commission and maintains that the relevant

market is the market for printing and packaging services.

1.1.5. Third- and fourth-party logistics services (international business)

16 See Commission Implementing Decision (EU) 2016/1195 of 4 July 2016 exempting courier services and other

services than postal services in Poland from the application of Directive 2014/25/EU of the European Parliament

and of the Council on procurement by entities operating in the water, energy, transport and postal services sectors

and repealing Directive 2004/17/EC (notified under document C(2016) 3986).

16 (94)

(57) The Commission has previously, in particular in relation to Sweden17, assessed the market for

third- and fourth-party logistics services. In accordance with its previous practice, third- and fourth-

party logistics services is defined as including import, warehousing and distribution as well as

direction, control and development of the customer’s flows of goods.18 The Commission has in

its previous practice also assessed a similar service under the product market for contract

logistics, which it defined as outsourced logistics and the associated data system

services/logistics application and consultation services.19

(58) The applicant notes that the aforementioned product market definitions of the Commission

overlap to a large extent, since under both definitions, the service provided is in essence

international logistics services entailing the direction and control of the customer’s flow of goods

heading towards a particular destination country. In any case, the applicant submits that there is

no need to reach a conclusion on the final product market definition, since the market share of

Eesti Post would be negligible under any plausible market definition. In line with the earlier

practise of the Commission, the applicant notes that the product market could be defined as the

market for third- and fourth-party logistics services.

(59) The applicant explains that Eesti Post mostly provides services to the major Chinese retailers

AliExpress and Alibaba for the delivery of goods both within the EU as well as outside of the EU.

In essence, the customer will arrange for the shipping (usually via plane) of goods from China

into an airport in Europe. Subsequently, it will request the services of a third- and forth-party

logistics services provider (such as Eesti Post) to arrange for collection, toll procedures, sorting

and arranging the logistics for delivery to the destination country, where the goods are distributed

by the local service providers.

(60) To the extent that the applicant is aware, e.g. Alibaba has an estimated 60 services providers

providing third- and fourth-party logistics services, out of which Eesti Post has a share of

approximately less than 0.1% based on volume. The applicant further notes that the market is

highly dispersed, meaning that to the extent that it is aware out of its main competitors (i.e.

services providers within Europe), only large international service providers, such as DPD or DHL

have a market share of 10% or more, with all other competitors having a lower market share. The

corresponding market data has been provided in Section 5E of this application.

3.2. Please explain the definition of the relevant geographical market or markets that in your opinion should form the basis of the Commission’s analysis. In your reply, please give reasons for assumptions or conclusions, supported by appropriate empirical evidence (13), and explain how the factors outlined above have been taken into account. In particular, please specify the geographical area in which the entity or entities concerned by this request are active in the relevant product market(s), and if you consider the relevant geographical market to be wider than a single Member State, give the reasons for this.

In the questions below, this (or these) definition(s) is (are) referred to as ‘the relevant geographical market(s)’.

17 Commission Decision of 19 December 2008, exempting certain services in the postal sector in Sweden from the

application of Directive 2004/17/EC of the European Parliament and of the Council coordinating the procurement

procedures of entities operating in the water, energy, transport and postal services sectors (notified under document

number C(2008) 8409) 18 Ibid, recital 2 (k). 19 Commission Decision of 6 August 2007, exempting certain services in the postal sector in Finland, excluding the

Åland Islands, from the application of Directive 2004/17/EC of the European Parliament and of the Council

coordinating the procurement procedures of entities operating in the water, energy, transport and postal services

sectors (notified under document number C(2007) 3700), recital 21.

17 (94)

1.1.6. International parcel services (inbound, outbound)

(61) The Commission has in its previous practice considered the market for international parcel

services as national20, however in related merger proceedings, has also noted that market

dynamics are increasingly leading towards international markets.21 The applicant agrees with the

previous practice of the Commission and notes that in respect to Estonia, the geographic market

is at least national, potentially pan-Baltic. For clarity, the applicant has at this stage provided

market data on the smallest possible geographic definition, i.e national.

(62) In respect to a potential pan-Baltic market definition, the applicant notes that the conditions of

competition across Estonia, Latvia and Lithuania are relatively homogeneous. The main factors

supporting a pan-Baltic market definition are that:

(a) customers in all three Baltic states prefer parcel machines as compared to alternative

solutions – e.g. having parcels delivered to their doorstep or picking the parcel from postal

offices /stores offering postal services,

(b) all main market participants in Estonia have a pan-Baltic parcel machine network,

resulting in similar offering across all three Baltic countries;

(c) larger international business or postal operators look for a regional partner (covering at

least Estonia, Latvia and Lithuania), rather than a national partner.

(63) That said and in response to question 10 of the European Commission’s RFI dated October 24,

2024, since the applicant believes that the market can be considered open to competition

regardless of the geographic market definition, the precise definition of the market can be left

open.

1.1.7. Domestic standard and express parcel services

(64) The Commission has in its previous practise assessed the geographic scope of the market for

domestic express parcel services to be national in scope. The Commission further explained that

this segmentation is mainly based on the fact that such services are provided at national level.22

(65) The applicant agrees with the prior practise of the Commission and further notes that the domestic

express parcel services are provided either as courier services or through parcel machines

located in different population centres close to or inside of commercial locations all over Estonia.

Thereby the domestic express parcel service is offered all over Estonia to all consumers located

in Estonia. The foregoing indicates that the geographic scope of domestic express parcel service

is national in scope.

1.1.8. Printing and packaging services for mail items

20 See, e.g. Commission Decision of 27 May 2020, on the applicability of Article 34 of Directive 2014/25/EU of the

European Parliament and of the Council to contracts awarded for activities related to the provision of certain postal

services in Denmark (notified Under document C(2020) 3335), para 21. 21 See e.g. case COMP/M.5152 – Posten AB / Post Danmark A/S, para 68. 22 See Commission implementing decision (EU) 2019/1204 of 12 July 2019 concerning the applicability of Directive

2014/25/EU of the European Parliament and of the Council to contracts awarded for certain activities related to the

provision of certain postal services and other services than postal services in Croatia (notified under document

C(2019) 5194), para 17.

COMMISSION IMPLEMENTING DECISION of 22 March 2013 exempting certain services in the postal sector in

Hungary from the application of Directive 2004/17/EC of the European Parliament and of the Council coordinating

the procurement procedures of entities operating in the water, energy, transport and postal services, para 19.

https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32013D0154&from=EN.

18 (94)

(66) The Commission has in its previous practise assessed the geographic scope of the market for

printing and packaging services for mail items to be national in scope. The Commission explained

that the printing facility is organized nationally (even if the printing can be done outside of the

national territory). The Commission further explained that the national product market definition

is also supported by pricing differences between different Member States and that the services

themselves are performed for potential and actual national senders in view to optimise their

internal processes and reduce their cost.23

(67) The applicant agrees with the prior practise of the Commission and further notes that the facilities

for the provision of services are located in Estonia. For clarity, the applicant has not assessed

pricing differences between different Member States, however notes that the final product market

definition can be left open since even on a national product market definition, Eesti Post is not the

largest services provider and thus access to the market can be considered not restricted due to

the presence of Eesti Post.

1.1.9. Third- and fourth-party logistics services (international business)

(68) The Commission has in its previous practise assessed the geographic scope of the market for

third- and fourth-party logistics services as national24. The applicant notes that while it agrees with

the past practise of the Commission, it notes that the product market definition for the purposes

of the current assessment may be wider than national, potentially covering at least the EEA or

even a wider area.

(69) The applicant notes that the core service Eesti Post offers to its clients is the control of the

customers goods heading towards a particular country. For that purpose, Eesti Post mainly

receives its import volumes in Riga (Latvia). From Riga, the import volumes are transported to

the Kaunas (Lithuania) sorting center for sorting. From Kaunas, volumes are transported mainly

by land transport to destination countries – Lithuania, Latvia, Estonia, Finland, Ukraine, Belarus

(stopped after Ukrainian war), Moldova, Kazakhstan, Kyrgyzstan and Georgia. Depending on the

entry and destination of particular import volumes, Eesti Post has access to sorting centres also

in England, Finland, Holland, Germany and most recently in Estonia.

(70) The applicant notes that to the extent that it is aware, Eesti Post and its main competitors provide

the services internationally, with the advantages and disadvantages being determined by the

location of the hubs (sorting centers) of the respective competitors. Thus, the market shows strong

indications for a wider than national geographic scope. Nevertheless, there are still some

indications that the market is national, since in order to offer final delivery, capacity for local

distribution is required. For the purposes of the applicant, this is generally sourced from third

parties active in the destination country. In any case, there is no need to determine the final

product market definition, since the market share of Eesti Post would remain marginal under any

plausible product market definition.

(71) For clarity, the applicant has provided market data for Eesti Post both on pan-European market,

as well as on a national market.

23 See Commission Implementing Decision (EU) 2016/1195 of 4 July 2016 exempting courier services and other

services than postal services in Poland from the application of Directive 2014/25/EU of the European Parliament

and of the Council on procurement by entities operating in the water, energy, transport and postal services sectors

and repealing Directive 2004/17/EC (notified under document C(2016) 3986), para 30. 24 Commission Decision of 19 December 2008, exempting certain services in the postal sector in Sweden from the

application of Directive 2004/17/EC of the European Parliament and of the Council coordinating the procurement

procedures of entities operating in the water, energy, transport and postal services sectors (notified under document

number C(2008) 8409), para 22.

19 (94)

4. Section 4 — Applicability of the legislative acts referred to in Annex III to Directive 2014/25/EU.

4.1. Is the activity covered by this request subject to one of the legislative acts referred to in Annex III to Directive 2014/25/EU (14)? If so, indicate the act or acts of national law transposing the Union legislation concerned.

(72) In Estonia, Directive 2008/6/EC has been transposed into national law through the Postal Act

(Postiseadus), which was amended to incorporate the provisions of the directive. For reference,

please see: Postal Act (Postiseadus), RT I 2008, 53, 297 (draft law only in Estonian).

Consequently, access to the relevant market should be deemed to be unrestricted in accordance

with Article 34 (3) of Directive 2014/25/EU.

20 (94)

5. Section 5A - International parcel services (inbound, outbound)

5. Section 5 — Information concerning the relevant market and access to that market

Overview of services provided under the product market for international business parcel service

(73) As noted under Section 1.1.2, the market for international parcel services consists of the provision

of standard parcel services originating from outside of a particular EU member state (inbound)

and services relating to parcels to be delivered outside of a particular member state (outgoing).

The main players active on this market in Estonia are Eesti Post, SmartPosti Estonia OÜ

(“SmartPosti”), DPD Eesti AS (“DPD”), FedEx Express Estonia AS (“TNT/Fedex“), DHL Express

Estonia AS (“DHL“), Venipak Eesti OÜ (“Venipak“) and Osaühing EKLT (“EKLT/UPS“).

(74) Eesti Post is the Estonian incumbent postal operator, operating under the trademark “Omniva”.

Rather than an Estonian national postal operator, Eesti Post is better described as an international

logistics company, focusing on the Baltics (Estonia, Latvia and Lithuania).

(75) SmartPosti was formally a standalone market participant operating under the trademark

“SmartPost”. In 2010, SmartPost was acquired by SmartPosti, the Finnish incumbent postal

operator.25 Smartpost Itella adopted the new brand name SmartPosti in the first half of 2025.

(76) DPD belongs to the DPD group, which is one of the world leading parcel delivery networks, with

market presence in all EU member states.26

(77) TNT/Fedex operated as two different companies until September 2023. The takeover of TNT

Estonia by FedEx has started and the merger process of the companies is currently underway.

The main activity of the company is the provision of international express courier and transport

services.27

(78) DHL operates in Estonia through DHL Express Estonia AS and DHL Logistics Estonia OÜ. DHL

is the world's leading logistics company serving more than 220 countries and territories.28

(79) Venipak manages a network of contactless parcel machines in Estonia, Latvia and Lithuania and

offers a fulfillment service.29

(80) EKLT/UPS is an authorized contractor and courier service provider in Estonia under the UPS

brand since 1994.30

(81) In relation to the Estonian parcel market, the Commission has in its past practice noted that

behaviours of customers vary between countries, for instance noting that in Denmark, customers

are used to parcel deliveries at their doorstep, whereas Swedish consumers appear more

accustomed to picking up their deliveries at the post office/shop with post service.31 The applicant

notes that this observation is also relevant for Estonia, where customers prefer picking up and

sending their parcels from parcel machines, often located close to retail stores and other

infrastructure objects. This is also confirmed by the fact that over the years the share and

coverage of parcel machines in the Estonian market has grown rapidly. In essence this means

that the main market participants all have parcel machine networks. Since parcel machines

25 Official webpage of SmartPosti: https://www.smartposti.ee/ 26 Official webpage of DPD: https://www.dpd.com/ee/en/ 27 Official webpage of TNT/Fedex: https://www.tnt.com/express/et_ee/site/home.html 28 Official webpage of DHL: https://www.dhl.com/ee-en/home.html 29 Official webpage of Venipak: https://venipak.com/ee/en/ 30 Official webpage of EKLT/UPS: https://www.eklt.ee/ 31 See Case COMP/M.5152 – Posten AB /Post Danmark A/S, para 66.

21 (94)

generally come with lockers with predetermined size, this is also reflected in the competitive

environment.

(82) In particular, the services provided by Eesti Post and its main competitors can be further

segmented into different price brackets based on either size or weight. The applicant notes

however that the differences between the market participants in each of the categories are

relatively minor, with very similar pricing between each of the main market players. If

internationally the shipment is delivered to a pick-up point or parcel machine, measurement-

based pricing32 is used, whereas in the case of courier delivery, it is based on weight.

(83) Eesti Post, SmartPosti and DPD also provide services where the price depends on the size, and

the differences between size categories are very small:

Table 1 - Parcel sizes (Eesti Post, SmartPosti, DPD)

Dimensions Eesti Post33 SmartPosti34 DPD35

Extra small* - 5*34*42 cm 8*18*61 cm

Small 9*38*64 cm 12*34*42 cm 8*43*61 cm

Medium 19*38*64 cm 20*34*42 cm 17*43*61 cm

Large 39*38*64 cm 34*36*42 cm 36*43*61 cm

Extra-large Longest side 1,5 m,

sum on length and

bottom circumference

up to 3 m.

60*36*60 cm Longest side 1,75 m,

sum on length and

bottom circumference

up to 3 m.

Bigger than extra-

large

Longest side 2,5 m,

sum of length and

bottom circumference

up to 4 m

- -

*the dimensions offered by Eesti Post for extra small parcels are for maxi letters with an item content of up to 2kg.

Table 2 - Parcel maximum weight (Eesti Post, SmartPosti, DPD)

Maximum weight Eesti Post36 SmartPosti37 DPD38

Extra small - 5 kg 31,5 kg

Small 30 kg 35 kg 31,5 kg

Medium 30 kg 35 kg 31,5 kg

32 For clarification and in response to question 7 (a) of the European Commission’s RFI dated October 24, 2024,

"measurement-based pricing" refers to a pricing structure that is determined by the dimensions of the parcels,

specifically their size. 33 Eesti Post parcel sizes available here: https://www.omniva.ee/public/files/failid/hinnakiri-pakk-pakiteenus-era-

est-en-2024-uus.pdf 34 SmartPosti parcel sizes available here: https://www.smartposti.ee/en/sending/parcel-prices#domestic-parcel 35 DPD parcel sizes available here: https://www.dpd.com/ee/en/baltics/ 36 See reference 32. 37 See reference 33. 38 See reference 34.

22 (94)

Large 30 kg 35 kg 31,5 kg

Extra-large 30 kg 35 kg 31,5 kg

Bigger than extra-large 100 kg - -

(84) In the light of above and in the case of measurement-based pricing, Eesti Post does not offer the

XS category, but maxi letters as an alternative. The maximum dimensions of maxi letter can be

either 230*230*20 mm or the sum of the length, width and height being 900 mm and the maximum

weight can be 2 kg, the price depends on the weight (0-250 g, 250-500 g, 0.5-1 kg and 1-2 kg).39

This service is mainly used for small and light items, which competitors offer in the XS category.

(85) In terms of Eesti Post, for the services where the price depends on the weight, the maximum

dimensions and the maximum weight are exactly the same, as for the largest categories in Table

1 and Table 2. As DPD and SmartPosti do not display on their websites the price lists for

international business letters, it is not possible to say with 100% certainty that the price lists are

similar to those of Eesti Post, but this information has been provided by Eesti Post's sales

managers based on customer feedback.

(86) DHL uses a different categorization method slightly different dimensions, which in turn are also

related to the maximum weight:

DHL size category Dimensions Weight

Envelope 35*27,5 cm 0,5 kg

Box 2 33,7*18,2*10 cm 1 kg

Box 3 33,7*32,2*10 cm 2 kg

Box 4 33,7*33,2*18 cm 5 kg

Box 5 33,7*32,2*34,5 cm 10 kg

Box 6 41,7*35,9*36,9 cm 15 kg

Box 7 48,1*40,4*38,9 cm 20 kg

Box 8 54,1*44,4*40,9 cm 25 kg

(87) Based on the tables above, DHL’s weight limits are close to those offered by Eesti Post, with an

exemption being that the upper limit of weight for parcels sent through Eesti Post are higher.

Those parcels make up a marginal share of the overall parcels sent, thus, it can be assumed that

the above implies that parcel categories of both competitors are priced according to similar

principles.

(88) In addition to the above, Venipak, TNT/Fedex, DHL and EKLT/UPS also offer services where the

price depends on both the weight and the size of the shipment, i.e. the volumetric weight is taken

into account and the price is based on either the real weight or the volumetric weight (whichever

is higher). Since they also offer transport of trays, they do not provide the maximum dimensions

of "parcel size" shipments, but the maximum dimensions assume that a shipment is packed on a

tray:

39 Information about the maxi letter service provided by Eesti post is available here:

https://www.omniva.ee/private/letter/letter_to_abroad#popup_box-88

23 (94)

Venipak40 TNT/Fedex41 DHL42 EKLT/UPS43

Maximum

dimensions

120*100*170 cm 240*120*150 cm 240*120*220 cm Longest side 2,47 m

cm, sum of length

and girth 4 m

(89) In conclusion, extra small parcels are only provided by SmartPosti and DPD, with Eesti Post

providing a viable alternative as maxi letters with an item content up to 2kg. Due to weight and

size limits, the maxi letters compete mostly against extra small parcels (please see recital (83) for

more details). This means that maxi letters should be considered as a similar product and an

alternative to extra small parcels provided by competitors.

(90) In response to question 7 (b) of the European Commission’s RFI dated October 24, 2024, in

addition to the key difference mentioned – where measurement-based pricing is used for

shipments delivered to a pick-up point or parcel machine, and weight-based pricing is applied for

courier delivery – there are other factors that influence the method of pricing. These include the

capabilities of the shipping companies' systems and their sorting infrastructure. Depending on the

company's logistics and the type of service provided (e.g., domestic vs. international, standard

vs. express), they may choose to use a size-based pricing model, weight-based pricing, or a

combination of both. Additionally, flat-rate pricing is often used by smaller local companies, while

distance-based pricing is common with services like Wolt or Bolt. Regarding the breakdown of

pricing methods, it is important to note that for postal services and letter-sized shipments, the

pricing is generally based on weight. For 2023, approximately 11% of shipments, particularly for

pick-up and drop-off (PUDO) services, were priced based on size. The remaining 89% were

priced according to weight for other services,

This section must be completed irrespective of the reply to point 4.1 above.

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

5.1. Please give the reasons why you consider that access to the relevant market is not restricted.

(91) The applicant explains that the market is characterised by several major market players, with at

least 5 market players with a market share of above 10%. While out of those Eesti Post is

estimated to have the largest market share, its market share remains below 40%.

(92) This itself indicates that Eesti Post is subject to appreciable competitive pressure, thereby being

a strong indication for the market being open to competition.

40 Venipak maximum parcel size is available here: https://fast.venipak.com/siuntu-pakavimas 41 TNT/FedEx maximum parcel size is available here: https://www.tnt.com/express/et_ee/site/how-to/calculate-size-

and-weight.html and https://www.fedex.com/content/dam/fedex/international/rates/fedex-rates-export-et-ee.pdf 42 DHL maximum parcel size is available here: https://www.dhl.com/content/dam/dhl/local/nl/dhl-

freight/documents/pdf/nl-freight-eurapid-weight-and-dimensions-charging-rules-en.pdf 43 EKLT/UPS maximum parcel size is available here: https://www.ups.com/ee/en/support/shipping-

support/shipping-dimensions-weight.page

24 (94)

(93) The applicant further explains that due to the growing nature of the market and increase in

alternative services providers (i.e. offering same hour delivery (e.g. Wolt) etc.), new undertakings

are encouraged to enter the market. This incentive combined with very low customer loyalty

allows for a rapid change of market shares due to competitive conditions on the market.

(94) The market situation and the lack of access restrictions to relevant market are also described in

more detail in recitals 0-(112) of the application.

5.2. For each relevant market, for each of the last three financial years (15), and for each of the following territories:

(a) the EEA territory;

(b) the EU as a whole;

(c) the territory of the EFTA States as a whole;

(d) each Member State and each EFTA State where the applicant carries out an activity; and

(e) the relevant geographical market (16), if the applicant considers that this market is different

Please provide the information referred to in points 5.2.1 to 5.2.9

5.2.1. an estimate of the total size of the market in terms of sales value (in Euro) and volume (units) (17), indicating the basis for the calculations and sources used and providing documents, where available, to confirm these calculations;

5.2.2. the sales in value and volume, as well as an estimate of the market share held by the applicant;

5.2.3. an estimate of the market share in value (and, where appropriate, volume) of all competitors (including importers) having at least 10 % of the geographical market under consideration. Provide documents, where available, to confirm the calculation of these market shares and provide the name, address, telephone number, fax number and appropriate contact person, of these competitors;

(95) The applicant explains that the relevant market for international parcel services is national, with

indications that the potential scope could be wider, potentially covering all of the Baltics. This is

because multiple market participants, such as Eesti Post, SmartPosti and Venipak for example,

operate across the Baltic region.

(96) In respect to market share on all of EU or EEA, the applicant notes that it only provides parcel

services in Estonia, Latvia and Lithuania. Consequently, its market share on an EEA or EU level

would be marginal. In relation to its market share in the territory of the EFTA States, the applicant

notes that Eesti Post is not active in the EFTA territories in relation to parcel services and thus

does not have market presence. As a result, the applicant requests the Commission to waive the

requirement stipulated under section 5.2 points (a) – (c) to provide data for the relevant market

for each of the last three financial years.

(97) For ease of data interpretation, the applicant has provided information requested under points

5.2.1 - 5.2.3 in a single table, segmenting the information based on value, volume and

distinguishing between B2X and C2X business segments.

Accordingly, the applicant has provided market data for the following international segments in

the following order:

(a) International parcel services (including inbound, outbound);

(b) B2X segment;

(c) C2X segment.

25 (94)

(98) In respect to the total market size and market share of its competitors international parcel service

services in respect to value (EUR), the applicant has relied on its best judgment, public data44

and public data on revenues from the Estonian tax authority for undertakings registered with the

Estonian Classification of Economic Activities (EMTAK, national equivalent to NACE

classification) for Other postal and courier activities (NACE code H53.2) and freight transport by

road (NACE code H49.4.1, for known competitors only).

(99) In respect to the total market size, the applicant notes that, there are further smaller market

players on the market, who possess international parcel networks also extending to Estonia,

however regarding whom clear market data is not available. Such competitors are major

international parcel services providers, such as DHL, TNT/Fedex and UPS. The overall revenue

generated by the Estonian legal entities of such is available on the market, however such revenue

is not segmented based on domestic or international, nor inbound or outbound. Consequently,

the applicant has provided its best estimate for such market players.

(100) The estimates are based on the proportion of international versus domestic postal services for

Eesti Post, with the same logic for the inbound and outbound market segments.

(101) In respect to the market size in terms of volume, no market data is available, and the applicant

has provided the market estimates of the market share as a percentage, based on the pricing

differences between Eesti Post and its competitors. Based on the different price levels of the

competitors, an assumed volume in units of the competitor has been derived. Subsequently, the

market volume of each competitor has been calculated by considering the volume of Eesti Post,

which relies on internal data of Eesti Post.

(102) The applicant further clarifies that Eesti Post lacks specific data regarding the precise breakdown

of competitors' international parcel service between their business (B2X) and private (C2X)

segments. Eesti Post's understanding of this segmentation is based on its best estimation of how

competitors' service volumes are divided between their business and private customers. In

general, the majority of international parcels are e-commerce related and thus part of the B2X

segment. This is also reflected in the overall market numbers, where Eesti Post assumes the

large majority of parcels to be part of the B2X segment, as compared to the C2X segment.

(103) The applicant wishes to note, that there have been changes in data compared to the originally

submitted application, to the extent that the data analysts have changed and, in connection with

this, the quality has also increased. Data changes are not marginal and do not show a drastically

different picture, i.e. changes of market value and volume are generally within 1-2%.

Table 3 - International parcel service (value)

Inbound and Outbound

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Volume (units)

Value (EUR)

Eesti Post 17 953 979 24% 15 017 240 19% 19 267 685 22%

Out of which maxi letters (up to 2kg)

8 361 029 5 190 325 2 341 146

SmartPosti 10 048 446 13% 10 763 786 13% 12 110 975 14%

DPD 12 307 982 16% 13 607 059 17% 12 670 382 15%

Venipak 3 159 177 4% 3 801 584 5% 4 969 337 6%

44 Example of public market share data can be found here: https://www.e-kaubanduseliit.ee/uudised/juuni-juulikuu-

pakiautomaatide-mahtude-monitooring.

26 (94)

TNT/Fedex 14 006 220 19% 14 890 503 18% 17 191 067 20%

DHL 13 256 332 18% 16 536 027 21% 14 048 452 16%

EKLT/UPS 4 743 282 6% 5 929 103 7% 5 924 579 7%

Total market 75 475 418 100% 80 545 302 100% 86 182 477 100%

Table 4 - International parcel service (volume)

Inbound and Outbound

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Eesti Post 6 158 153 38% 4 087 269 26% 6 222 461 35%

Out of which maxi letters (up to 2kg)

4 513 654 2 462 751 1 639 643

SmartPosti 1 944 680 12% 2 083 120 14% 2 368 573 13%

DPD 1 944 680 12% 2 149 936 14% 1 994 779 11%

Venipak 567 198 3,5% 682 536 4% 895 933 5%

TNT/Fedex 2 430 850 15% 2 584 322 17% 2 995 312 17%

DHL 2 268 793 14% 2 830 106 18% 2 413 672 13%

EKLT/UPS 810 283 5% 1 012 854 7% 1 013 655 6%

Total market 16 124 637 100% 15 430 143 100% 17 904 386 100%

Table 5 - B2X (value)

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Eesti Post 13 891 369 21% 11 600 465 16% 15 588 519 20%

Out of which maxi letters (up to 2kg)

2 341 146

SmartPosti 8 038 757 12% 8 611 029 12% 9 893 245 13%

DPD 10 461 785 16% 11 566 000 16% 10 654 264 14%

Venipak 2 843 259 4% 3 421 426 5% 4 566 113 6%

TNT/Fedex 12 885 722 20% 13 699 262 19% 15 981 396 21%

DHL 12 726 079 19% 15 874 586 23% 13 695 381 18%

EKLT/UPS 4 553 551 7% 5 691 939 8% 5 722 967 8%

Total market 45 712 739 100% 65 400 522 100% 70 464 707 100%

Table 6 - B2X (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Eesti Post 5 923 098 39% 3 889 489 27% 6 056 818 36%

Out of which maxi letters (up to 2kg)

1 639 643

27 (94)

SmartPosti 1 750 212 11% 1 874 808 13% 2 153 974 13%

DPD 1 750 212 11% 1 934 942 13% 1 782 413 10%

Venipak 521 822 3% 627 933 4% 838 017 5%

TNT/Fedex 2 309 307 15% 2 455 105 17% 2 864 097 17%

DHL 2 200 729 14% 2 745 203 19% 2 368 351 14%

EKLT/UPS 785 975 5% 982 469 7% 987 824 6%

Total market 15 241 356 100% 14 509 949 100% 17 051 495 100%

Table 7 - C2X (value)

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Eesti Post 4 062 610 40% 3 416 774 34% 3 679 166 36%

SmartPosti 2 009 689 20% 2 152 757 21% 2 217 731 22%

DPD 1 846 197 18% 2 041 059 20% 2 016 119 20%

Venipak 315 918 3% 380 158 4% 403 224 4%

TNT/Fedex 1 120 498 11% 1 191 240 12% 1 209 671 12%

DHL 530 253 5% 661 441 7% 353 072 4%

EKLT/UPS 189 731 2% 237 164 2% 201 612 2%

Total market 10 074 896 100% 10 080 594 100% 10 080 594 100%

Table 8 - C2X (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Eesti Post 235 055 27% 197 780 21% 165 643 19%

SmartPosti 194 468 22% 208 312 23% 214 599 25%

DPD 194 468 22% 214 994 23% 212 367 25%

Venipak 45 376 5% 54 603 6% 57 916 7%

TNT/Fedex 121 542 14% 129 216 14% 131 215 15%

DHL 68 064 8% 84 903 9% 45 321 5%

EKLT/UPS 24 308 3% 30 386 3% 25 831 3%

Total market 883 282 100% 920 193 100% 852 891 100%

(104) While out of the above Eesti Post is estimated to still hold the largest market share in most

international segments of value and volume as of 2023 data (see Table 3, Table 4, Table 6 and

Table 7), its market share remains below 30% in terms of value and 40% in terms of volume.

While Eesti Post has managed to increase its market share marginally, the growth is mostly

attributable to significant volume of low value parcels from Aliexpress and Cainiao, as stated

below in recital 107. Their volumes for 2023 made up almost 30% of Eesti Posts overall volume

and considering that the volume results from 2 single customers who is able to quickly renegotiate

or change suppliers in case of a price increase, the market share of Eesti Post that actually

represents its market strength should be about 30% less than indicated the tables above.

28 (94)

(105) For clarification and response to question 8 of the European Commission’s RFI dated October

24, 2024, the applicant clarifies that the increase in Eesti Post's market share indicated in Table

4, which rose by 9% in 2023 compared to 2022, can be attributed primarily to Eesti Post’s strategic

partnerships with major e-commerce platforms, such as Aliexpress and Cainiao. Eesti Post has

established framework agreements with these companies to manage their parcel flows. While

similar agreements have also been concluded by Eesti Post’s competitors, the final decision on

which operator will handle these parcels is determined through a competitive tender process

among Estonian postal operators. This segment of the market is highly competitive, particularly

due to the substantial volumes handled by, for example, Aliexpress and Cainiao. As such, pricing

strategies play a critical role in securing these contracts. In 2023, Eesti Post successfully

optimized its pricing model, strengthening its competitive position against other operators. This

significantly contributed to the growth of Eesti Post’s market share throughout the year 2023.

(106) For further background regarding Chinese e-commerce clients and in response to question 9 of

the European Commission’s RFI dated October 24, 2024, the applicant further explains that

Chinese e-commerce clients generally do not display long-term loyalty to one service provider.

These customers typically handle large volumes of low-value parcels, and their decisions can be

highly price-sensitive. A small difference in service price – sometimes even as little as a few cents

– can lead to a complete shift in volume to a competing logistics provider. That is why we believe

that the market share of Eesti Post, which appears to be higher due to these large but volatile

international volumes, should be adjusted down. In other words, while the volume from Chinese

customers may make up a significant portion of Eesti Post's overall international parcel volumes,

this volume is less stable and more likely to change rapidly in response to pricing pressures from

competitors. As a result, the market share represented by this business should be considered

less reflective of Eesti Post's long-term market strength.

(107) With regard to the rest of the suppliers, while Eesti Post was the only undertaking who had lost

market share for the period between 2019-2022, it has managed to stabilize thanks to the volumes

connected to Aliexpress and Cainiao. That said, the main competitors of Eesti Post have

managed to increase their market share between 2019-2022 at the cost of Eesti Post, thus

indicating competitive pressure arising from them.

(108) This all indicates that Eesti Post is subject to appreciable competitive pressure, thereby being a

strong indication for the market being open to competition.

(109) One notable competitor is Venipak, who has managed to exponentially increase the coverage of

their parcel machine network, and it is now almost mirroring that of Eesti Post.

(110) Eesti Post also believes that Unisend Eesti OÜ’s45 market share will also increase in the following

years as they have also actively expanded their network with parcel machines similarly to

Venipak. The company was founded on November 29, 2023, and therefore, it is still difficult to

assess their actual impact on the market. However, according to their own website, as of today,

they already have 145 parcel machines across Estonia and over 750 throughout the Baltics. The

total number of parcel machines at the end of 2023 in Estonia was around 900.

(111) It must also be noted that the share of maxi letters has fallen sharply in recent years which further

demonstrates that the market is open to competition. If in 2021, 8 361 029 maxi letters were

served by Eesti Post then in 2023, this number was already 1 639 643, with initial data from 2024

indicating a further decline of about 15%. According to the applicant, this sharp decline is linked

with three factors. Firstly, according to Eesti Post, the sending of maxi letters is a product that is

gradually being phased out, with decreasing consumption by consumers each year, as the service

45 Official wepage of Unised Eesti OÜ: https://unisend.ee/en/

29 (94)

is less convenient for the consumer as compared to parcel machines (parcel machines are more

widely available with better opening hours (if not accessible at all times). Secondly, as a result of

the expansion of its competitors' market, Eesti Post has lost a large part of its maxi letter service

volumes to the alternatives offered by its main competitors because, as described above, the

latter have expanded rapidly in the market. According to Eesti Post, Eesti Post has lost the volume

of its maxi letters primarily to DHL but also to other market participants. Thirdly, a further reason

for the decrease in the volume of maxi letters is that parcels sent from AliExpress started to be

consolidated (if one person ordered from several different sellers at the same time, they were no

longer sent as separate parcels but packed together into a single shipment).

(112) In light of the above, the expansion of competitors’ activities in the market has led to a situation

where the market share of Eesti Post has decreased in recent years, both in terms of value and

volume, leading to increased prominence of its competitors. Considering these circumstances, it

can be stated that the market is opened to competition.

(113) The contact details for the competitors are provided below:

Competitor Contact info

DPD Eesti AS

Address; Harju County, Rae parish, Lehmja village, Taevavärava tee 1,

75306

Phone: +372 613 0012

Email address: [email protected]

Internet address: https://www.dpd.com/ee/en/

SmartPosti

Address; Harju County, Rae parish, Lehmja village, Loomäe tee 13, 75306

Phone: +372 699 0431

Email address: [email protected]

Internet address: https://www.smartposti.ee/

Venipak Eesti

OÜ

Address; Harju County, Tallinn, Lasnamäe, Osmussaare tn 8, 13811

Phone: +372 641 4481

Email address: [email protected]

Internet address: https://venipak.com/ee/en/

Federal

Express

Corporation

Eesti filiaal

Address; Harju County, Tallinn, Lasnamäe, Valukoja tn 32/3, 11415

Phone: +372 605 8692

Email address: [email protected]

Internet address: https://www.tnt.com/express/et_ee/site/home.html

DHL Express

Estonia AS

Address; Harju County, Tallinn, Lasnamäe, Valukoja tn 32/3, 11415

Phone: +372 680 8555

Email address: [email protected]

Internet address: https://www.dhl.com/ee-en/home.html

Osaühing

EKLT

Address: Harju maakond, Tallinn, Lasnamäe, Valukoja tn 22, 11415

Phone: +372 666 4700

Email address: [email protected]

Internet address: www.eklt.ee

30 (94)

5.2.4. an estimate of the total value, volume and source of imports from outside the EEA territory and identify:

(a) the share of such imports attributable to the applicant;

(b) an estimate of the extent to which any quotas, tariffs and non-tariff barriers to trade constitute barriers to these imports; and

(c) an estimate of the extent to which transportation and other costs affect these imports.

(114) The applicant explains that the provision of postal services requires the presence of a local postal

network, which in turn requires local presence for market players. This remains true for

international (outbound, inbound) postal services. This is because the provision of outbound and

inbound international parcel services requires a national postal network with access to networks

in destination countries or countries, wherefrom the parcel originates.

(115) Consequently, the applicant notes that the share of imports from outside the EEA territory is not

relevant for assessing the direct exposure to competition for the provision of postal services and

asks the Commission to waive the requirement under this Section 5.2.4.

5.2.5. the extent to which trade between States within the territory of the EEA is hindered by:

(a) transportation and other costs; and

(b) other non-tariff barriers to trade.

(116) The applicant explains that for the provision of international parcel services, the key requirement

is a local (national) parcel network and access to networks in destination countries or where the

parcel originates from or where the outgoing parcel is directed.

(117) Such access is provided through vertical agreements with service providers located in other

jurisdictions.

(118) The applicant explains that within the EEA, as long as postal operators have access to any of the

aforementioned networks, along with a local presence, there are no appreciable barriers to trade.

5.2.6. the manner in which the applicant produces and sells the products or services; for example, whether they are manufactured locally, or are sold through local distribution networks;

(119) The applicant notes that international parcel services (both inbound and outbound) are provided

through the same local distribution network consisting of post offices and parcel machines and

services. Majority of market players (e.g. DHD, UPS) also provide the service through its courier

network.

(120) The preference between post offices versus parcel machines is generally determined by the

customer, with the overwhelming majority of Estonian customers preferring parcel machines.

(121) From the supply side, the applicant notes that while only Eesti Post has access to a post office

network, this is not an advantage, since the costs associated with the upkeep of such a network

do not allow for the provision of parcel services to compete without public subsidies.

5.2.7. a comparison of the applicant's and its competitors' price levels in each Member State and EFTA State and a similar comparison of price levels between the EU, the EFTA States and other areas where these products are produced (for example, Eastern Europe, the United States of America, Japan, or any other relevant area);

(122) Eesti Post assesses its price based on costs as well as competitor pricing.

(123) As noted under recital (83), parcels can be segmented into six different categories by size, with

each category having its own pricing. Generally, the pricing is very similar between Eesti Post

31 (94)

and its main competitors and depends on the weight, size and destination of the parcel as is

illustrated by the tables under recital (124).

(124) The applicant explains that in general the pricing between Eesti Post46 and its competitors

(SmartPosti47 and DPD48) is more or less the same. A comparison between the provision of

services from Estonia to Latvia and Lithuania can be found below for small, medium and large

parcels:

Small parcels Estonia - Latvia Estonia - Lithuania

Eesti Post 6,99 € 8,09 €

SmartPosti 7,01 € 8,13 €

DPD 6,92 € 8,03 €

Small parcels Estonia - Latvia Estonia - Lithuania

Eesti Post 8,09 € 9,28 €

SmartPosti 8,02 € 9,14 €

DPD 7,93 € 9,05 €

Small parcels Estonia - Latvia Estonia - Lithuania

Eesti Post 9,09 € 11,39 €

SmartPosti 9,04 € 10,15 €

DPD 8,94 € 10,07 €

(125) For clarity, the applicant further notes that it also provides international parcel services through

maxi letters with an item content of up to 2kg, using the post office network. In respect to pricing,

the price is determined by the weight of the letter and the destination and thus varies significantly.

5.2.8. the nature and extent of the vertical integration of the applicant compared with the largest competitors;

(126) The applicant notes that in general, the importance of vertical integration is limited and does not

result in any significant competitive advantage. At most, vertical integration is an indication of

closeness of competition between each of the postal operators.

(127) As a starting point, the provision of international business parcel delivery uses several inputs

which can either be sourced from third parties or provided by the postal operators themselves.

Whether or not certain inputs are sourced from third party service providers or are supplied

“inhouse” through vertical integration depends on the business models of each of the postal

operators.

(128) The main inputs which may either be bought in or provided via vertically integrated divisions of

the postal operators are IT and land or air transport. In respect to IT, the costs to developing an

inhouse IT solution for customers to interact with e.g. parcel machines are comparable to having

the IT solutions provided by third parties. While the inhouse solution does provide more flexibility,

46 Eesti Post parcel prizing is available here: https://www.omniva.ee/public/files/failid/hinnakiri-pakk-pakiteenus-era-

est-en-2024-uus.pdf 47 SmartPosti parcel prizing is available here: https://www.smartposti.ee/en/sending/parcel-prices#domestic-parcel 48 DPD parcel prizing is available here: https://www.dpd.com/ee/en/price-list/

32 (94)

ultimately, the solutions provided by third parties have sufficiently matured and the need for

additional flexibility as compared to third party solutions is relatively low.

(129) In respect to vertical integration related to transport – this does result in some advantages, in

particular in relation to express parcel services, however the volumes needed to take significant

advantage of this are not present on the Estonian market, thus the competitive advantage is

minor, if present at all.

(130) One notable exception regarding the extent of vertical integration for international parcel delivery

is the fact that Eesti Post and its main competitors are also present in other Baltic countries. Since

international business parcels also move between Estonia, Latvia and Lithuania, this allows each

of the market participants to use their own parcel networks in Estonia and in the other Baltic

countries. In practice, this allows for a more flexible provision of services for parcels moving

between Estonia, Latvia and Lithuania – e.g. increased IT integration so that cross-border parcel

services are provided to customers under similar conditions as domestic parcel services.

5.2.9. information on the cost structure of the applicant (18). Also, specify any assets or infrastructure used jointly with other entities or used to carry out more than one activity covered by Directive 2014/25/EU. Where the use of such assets or infrastructures is subject to special conditions, such as universal service obligations or special rights, please specify.

(131) The applicant explains that in terms of infrastructure used, Eesti Post uses two distinct

infrastructures to provide international parcel services. In particular, the parcel machine network

and the post office network. The applicant explains however that the post office network is not

required for the provision of international parcel services and is there only due (i) the universal

service obligation resting on Eesti Post, and (ii) since the provision of maxi letters (with an item

content of up to 2kg) remains competitive with alternatives offered by the main competitors of the

Eesti Post (who use the parcel machine network to do so).

(132) In addition to the presence of a parcel machine network, the other main costs are made up by

land and air transport and IT.

(133) Aside from transport, almost all other required assets and infrastructure is used to carry out more

than one activity covered by Directive 2014/25/EU. In particular, the parcel machine network is

used to offer both domestic and international standard parcel services and the post office network

is used to carry out all services under the universal service obligation.

(134) In particular, the following assets are used for the provision of international parcel services49:

(a) parcel machines;

(b) post offices;

(c) distribution centers;

(d) sorting line and related equipment;

(e) commercial vans and truck;

(f) domestic transport;

(g) frontline workwear;

(h) office;

(i) IT: Core system (infa, ERP, CRM, DWH);

(j) IT: Parcel related.

(135) The universal service obligation in Estonia includes the following50:

49 The table also illustrates the assets concurrently used by Eesti Post for other service segments. 50 Article 5(2) of the Estonian Postal Act. Available online here:

https://www.riigiteataja.ee/en/eli/531122021006/consolide

33 (94)

(a) the forwarding of items of correspondence weighing up to 2 kilograms as ordinary,

registered and insured items;

(b) the forwarding of postal parcels weighing up to 20 kilograms as registered and insured

items.

(136) In response to question 11 (b) of the European Commission’s RFI dated October 24, 2024, Eesti

Post explains that it does receive compensation for discharging the Universal Service Obligation

(USO), but the compensation is strictly allocated for these universal services and does not involve

any cross-subsidization with other business segments. In the context of Eesti Post’s exemption

request, the compensation is only relevant for the provision of “maxi letter” related services under

international parcel service business segment, as this falls within the definition of universal postal

services according to the Postal Act. In response to question 3 of the European Commission’s

RFI dated December 16, 2024, the applicant confirms that there is no cross-subsidisation

between services under the universal service obligation (maxi-letters) and other business

segments, such as international parcel services.

5.3. Please provide the following information:

5.3.1. Over the last five years, has there been any significant entry to the geographical market(s) for the relevant products (19)? If the answer is ‘yes’, where possible provide the name, address, telephone number and fax number of the undertaking concerned, as well as the appropriate contact person, and an estimate of their current market share.

(137) Eesti Post is not aware of any significant entry to the geographic markets within the last five years.

That said, Venipak and Unisend are competitor who have aggressively expanded their market

presence, via installation of new parcel machines (see recitals (109) and (110) above). Thus, the

applicant expects that both Venipak and Unisend will significantly increase, potentially triple its

market share in the next few years.

5.3.2. In the opinion of the applicant are there any undertakings (including those at present operating only in markets outside the EU or outside the EEA) that could enter the market? If the answer is ‘yes’, please explain why and identify such undertakings by name, address, telephone number, fax number and appropriate contact person, and give an estimate of the time within which such market entry is likely to occur.

(138) The applicant does not consider there to be any applicants who could enter the market from

outside the EU or EEA.

5.3.3. Describe the various factors influencing entry into the relevant markets in this case, from both a geographical and product viewpoint. In so doing, take account of the following, where appropriate:

(a) the total costs of entry (research and development, distribution systems necessary, promotions, advertising, after-sales service, etc.) on an equivalent scale to that of a significant viable competitor, indicating the market share of a such competitor;

(139) The applicant notes that in respect to international parcel services, the average Estonian

customer has a very strong preference towards parcel machines compared to other alternative

options (i.e. postal offices or even courier). This means that successful market entry requires a

parcel machine network, with Eesti Post estimating the minimum number of parcel machines

required at around 50 with an average cost of under EUR 10 000 per parcel machine. Accordingly,

and in response to question 3 of the European Commission’s RFI dated October 24, 2024,

establishing a reliable logistics network may pose another barrier to entry. However, in Estonia's

relatively small market, the geographical distance and population density allow some flexibility

compared to larger countries, making it less challenging to scale up an efficient logistics network

in Estonia as it might be in more densely populated regions. As a result, the entry barriers in

Estonia are lower due to its small size, but players must invest in technology to stay competitive.

34 (94)

(140) Other costs necessary for market entry relate to the presence of an online IT solution (e.g.

investing in advanced tracking systems), which can generally either be sourced from third parties

or built inhouse. In case the IT solutions are sourced from third parties, a monthly subscription is

possible. In response to question 1 of the European Commission’s RFI dated December 16, 2024,

the applicant further explains that the main investments required from the IT side to operate on

the market or operating on the international parcel services market is advanced software for

routing and logistics as well as apps for better customer experience. Today, a number of service

providers offer Software-as-a-Service (SaaS) solutions that provide essential functionalities at

competitive prices, significantly lowering the initial investment barrier. For instance, SaaS

products can cost as little as €0.5 per kg, depending on the provider. Examples of such services

include platforms like Qstep51, CargoWise52, IBS iCargo53, and Logistaas54. These solutions allow

new entrants to leverage advanced technology without requiring significant initial capital.

Furthermore, partnerships with established players in the logistics and delivery industry also

provide an opportunity for new businesses to enter the market with minimal investment. An

example of this model is Post.plus55, which started by partnering with Lithuanian Post to offer

services, effectively lowering the capital requirements. Alternatively, a company could choose to

develop its own software system, which could lead to further reductions in long-term operating

costs.

(141) Further costs relate to the presence of a distribution center. To sum up, entering the market is

quite simple, primarily requiring a sufficient volume of shipments to be serviced rather than any

specific expertise or specialized know-how. The total costs for market entry can be estimated at

between price range of about MEUR 1 – 1.5. Provided the market entry is initiated from larger

population centers, 50 parcel machines could net a market share of around 5.5%.

(142) In relation to timing, market entry can take place relatively fast (in as little as 9 months) and there

are no significant barriers to reaching significant market penetration, due to low customer loyalty

and sensitivity to pricing and quality of the service. In particular, a customer’s main contact with

the postal operator in relation to international parcel services takes place online, where the

necessary application for parcel services can be made. This also means that competing prices

can easily be compared, with small price differences able to shift customer choice.

(143) In relation to brand loyalty, one exception is SmartPosti with relation to international parcels going

to or arriving from Finland. As a general trend, customers of SmartPosti wishing to send parcels

to Finland or receiving parcels from Finland overwhelmingly favour SmartPosti for their service

provider, with Eesti Post estimating that roughly 70-80% for Finland related international parcels

moving through the SmartPosti network.

(144) As a result, each of the main market participants aim to differentiate their product offerings, which

could allow for different pricing for different product segments.

(b) any legal or regulatory barriers to entry, such as government authorisation or the existence

of any standards;

(145) The provision of international parcel services does not require any permits, government

authorization or mandatory standards.

51 https://qstep.eu/ 52 https://www.cargowise.com/ 53 https://www.ibsplc.com/product/air-cargo-solutions/icargo 54 https://logistaas.com/enterprise/ 55 https://post.plus/

35 (94)

(c) any restrictions created by the existence of patents, know-how and other intellectual property rights in these markets and any restrictions created by the licensing of such rights;

(146) The applicant submits that there are no restrictions to entry created by the existence of patents,

know-how or other intellectual property rights.

(d) the extent to which the applicant is a licensee or licensor of patents, know-how and other rights in the relevant markets;

(147) Eesti Post is not a licensee or licensor of patents, know-how or other relevant rights which may

impact market entry for competitors.

(e) the importance of economies of scale for the production of products in the relevant markets;

(148) Due to a large portion of costs being fixed, economics of scale are important for the provision of

international parcels services. In particular, significant economies of scale in the parcel sector

would allow for further integration, which would generate efficiencies and allow for lower pricing.

(149) However, due to the smallness of the Estonian market, Eesti Post considers it unlikely that

economies of scale could impact competition between the market participants. That said Eesti

Post notes that in order to recoup initial investment costs and fixed costs related to the parcel

machine network, a minimum of 10% customers/ market share is required. Regarding the above

number, according to the applicant, a market player with a 10% market share has sufficient

capacity to cover its own operating costs. In the case of parcel services, this percentage is more

likely to be around 5 %, but for courier services the figure is higher, estimated to be slightly above

10 %, as serviced volume is more important in this business segment.

(f) access to sources of supply, such as availability of raw materials.

(150) Access to various supplies is freely available.

RESEARCH AND DEVELOPMENT

5.3.4. Give an account of the importance of research and development in the ability of an undertaking operating in the relevant market(s) to compete in the long term. Explain the nature of the research and development carried out by the applicant in the relevant markets.

In so doing, take account of the following, where appropriate:

(a) trends and intensity of research and development (20) in these markets and for the applicant;

(b) technological developments in these markets over an appropriate time period (in particular developments in products and/or services, production processes, distribution systems, and so on);

(c) the major innovations that have been made in these markets and the undertakings responsible for these innovations;

(d) the cycle of innovation in these markets and where the parties are in this cycle of innovation.

(151) The applicant notes that research and development plays a marginal role in competition, with the

main development related to the IT – i.e. user experience (UX) design and the presence of online

services.

(152) Other potential developments could relate to alternatives to parcel machine networks, such as

delivery by drones etc., however such developments have not yet seen widespread use in

Estonia.

36 (94)

COOPERATION AGREEMENTS

5.3.5 To what extent do cooperation agreements (horizontal or vertical) exist in the relevant markets?

5.3.5 Give details of the most important cooperation agreements concluded by the applicant in the relevant markets, such as research and development, licensing, joint production, specialisation, distribution, long term supply and exchange of information agreements.

(153) Due to the provision in international parcel services requiring a local network both in the country

where the parcel originates from, as well as in the destination country of the parcel, cooperation

agreements are quite common.

6. Section 6 — Exposure to competition

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

According to Article 34(2) of Directive 2014/25/EU, the question of whether an activity is directly exposed to competition must be decided on the basis of criteria that are in conformity with provisions on competition of the TFEU, such as the characteristics of the goods or services concerned, the existence of alternative goods or services, the prices, and the actual or potential presence of more than one supplier of the goods or services in question.

6.1. Explain why you consider that the activity covered by this request is fully exposed to competition in the relevant product market on the relevant geographical market(s). In particular, give the following information:

(154) In summary, the applicant notes that the market for international parcel services is highly

competitive, with several market players on the market with similar market shares. While Eesti

Post remains (based on 2023) data, the largest market participant on the overall market for

international parcels in terms of volume, it has lost market share in terms of value and is no longer

the largest market participant. As such, it has nearly equivalent market shares with DPD and

TNT/Fedex, who are all large international parcel service providers and thus have an advantage

when compared to local and regional operators, such as Eesti Post, SmartPosti and Venipak. In

respect to Venipak, it is the understanding of the applicant that Venipak is planning to expand its

business to both in the Baltic States, but also expand its business in Poland, Germany and other

EU Member States. Thus, it could also soon be considered an international player. In response

to question 12 (b) of the European Commission’s RFI dated October 24, 2024, the applicant

further clarifies that Venipak has undertaken several strategic steps to expand its business across

Europe and enhance its service offerings to meet the growing demand for e-commerce logistics.

The following concrete actions demonstrate how the company has expanded its footprint in both

the Baltic region and beyond:

(n) Expansion Across the Baltics: In September 2023, Venipak completed its expansion

in the Baltics and extended its delivery network, connecting all three Baltic countries into

a joint network of over 600 parcel lockers, enhancing connectivity and service coverage.56

56 https://venipak.com/news/2023-09-11/venipak-completes-expansion-in-the-baltics-and-takes-on-europe/

37 (94)

(o) Strategic Acquistion: In May 2023, Venipak acquired a Dutch e-commerce wholesaler,

Strengholt Entertainment BV, gaining access to global platforms like Amazon and major

European retailers, thereby strengthening its position in e-commerce logistics.57

(p) Infrastructure Investment: In February 2023, Venipak opened its first e-fulfillment

warehouse in Poland, aiming to enhance service quality, strengthen its position in the

Baltics, and create new business opportunities in Europe.58

(155) Further, the presence of several equivalent competitors by itself is a strong indicator that the

market is open to competition and for customers and service providers, no single service provider

can be considered to have a must have product. Thus, all market participants are obliged to

compete with each other to the best of their ability.

(156) The only market segment where Eesti Post has the largest market presence in terms of value is

C2X (estimated 36% market share, 2023 data), however even on that segment, there are several

equivalent competitors, such as DPD and SmartPosti who are able to provide competition to Eesti

Post. Moreover, the market shares of other international players, such as DHL, TNT and UPS

have all been showing an increase (in contrast to the falling market share of Eesti Post).

(157) Further and in response to question 12 (a) of the European Commission’s RFI dated October 24,

2024, to clarify the advantage of DPD, TNT/FedEx, and similar global players in comparison to

Eesti Post, the applicant can highlight several key factors. Global players like DPD and

TNT/FedEx benefit from extensive international networks, giving them direct access to large

volumes of parcels from around the world. This enables them to offer more competitive rates,

faster delivery options, and a broader range of services. In contrast, Eesti Post, being more

regionally focused, may not have the same volume of international parcels, which can make it

harder to compete on speed, scale, and cost-efficiency. Furthermore, global operators can

negotiate better terms with suppliers, partners, and customers due to their large-scale operations.

They offer integrated services across multiple regions, including standard and express delivery,

which can attract larger customers who value the convenience of dealing with a single provider.

Eesti Post, as a smaller, local operator, may lack the leverage and broad geographic coverage to

compete effectively in both local and international markets. Additionally, global players typically

have far greater purchasing power when it comes to acquiring resources like parcel machines,

warehouses, IT systems, and software. They can optimize investments by deploying resources

across multiple countries and regions, achieving economies of scale that reduce costs. These

factors collectively create a competitive advantage for larger international players like DPD and

TNT/FedEx, allowing them to offer more competitive pricing, a wider service range, and more

consistent quality across multiple markets – advantages that are difficult for smaller, regional

players like Eesti Post to match without significant investment in infrastructure and resources.

(158) In conclusion, the provision of international parcel services in Estonia is not only open to

competition, but a market subject to strong competition between international and regional

players. This is also indicated from the market shares remaining dynamic, allowing for rapid

changes from year to year.

GENERAL CONDITIONS ON THE RELEVANT MARKET

6.1.1. Identify the five largest independent suppliers (21) to the applicant and their individual shares of the applicant's purchases (of raw materials or goods used to produce the relevant products).

57 https://venipak.com/news/2023-05-23/venipak-acquires-dutch-e-commerce-wholesaler-opening-up-avenuesto-

amazon-and-other-global-platforms-as-well-as-major-european-retailers/ 58 https://venipak.com/ee/en/news/2023-02-07/venipak-development-aims-to-facilitate-baltic-business-trade-

inpoland-and-remaining-europe/

38 (94)

Provide the name, address, telephone number, fax number and appropriate contact person, of these suppliers:

(159) The contact details of the five largest independent suppliers are as follows:

Name of the

supplier

Supply

sourced

from the

supplier

Share of

supplier

from the

applicant´s

purchases

(%)

Contact information

OY

MATKAHUOLTO

AB

Last mile

delivery 8%

Address: Kaivokatu 10A, 00101 Helsinki,

Finland

Phone: +358 40 182 7076

E-mail: [email protected]

Internet address:

https://www.matkahuolto.fi/en

RESTAN

PARTNER OÜ

Courier

services 7%

Address: Harju county, Saku parish,

Roobuka village, Soonurme tee 31,

Estonia 75516

Phone: +372 5599 7092

Email address: [email protected]

Internet address: N/A

RAIN TRANSPORT

AS Transport 6%

Address: Ravila 63b, Tartu city, Estonia

50411

Phone: +372 742 0805

Email: [email protected]

Internet address: https://rain.ee/

LUFTHANSA

CARGO AG Transport 7%

Address: Schutzenwall 1, D-22844

Norderstedt, Germany

Phone: +49 696 969 1181

Internet address: https://lufthansa-

cargo.com/

SCHENZHEN HIVE

BOX TECNOLOGY

CO LTD

Parcel

machines 4%

Address: 16F，Building2#, Yongxinhui,

Dongbin Road 4078,Shenzhen, China

Phone: +86 1382 7465 653

Email: [email protected]

Internet address:

http://www.fcbox.com/en/pc/index.html#/

SAKU AB AS Transport 4%

Address: Paneeli 2/1, Tallinn, Estonia 13816

Phone: +372 605 2370

Email: [email protected]

Internet address: www.sakuab.ee

39 (94)

Please also identify the undertakings affiliated to the applicant and their individual shares of the applicant's purchases (of raw materials or goods used to produce the relevant products). Provide the name, address, telephone number, fax number and appropriate contact person, of these undertakings.

(160) The applicant provides services for its Latvian and Lithuanian postal entities. In 2023, Eesti Post

remunerated Latvian and Lithuanian subsidiaries with a sum of 0.9 MEUR. At the same time,

Eesti Post paid its subsidiaries in Latvia and Lithuania approximately 14.4 MEUR for the delivery

of parcels (e.g. About You parcels, etc.).

STRUCTURE OF SUPPLY IN THE RELEVANT MARKETS

6.1.2. Describe the distribution channels and after-sales service networks that exist in the relevant markets. In doing so, take account of the following, where appropriate:

(a) the existing distribution systems and their importance in these markets. To what extent is

distribution performed by third parties or by undertakings affiliated to the applicant?

(161) The applicant explains that services are provided to customer directly through the relevant

networks. Third parties or undertakings affiliated to the applicant do not provide any such services.

(b) the existing after-sales service networks (for example, maintenance and repair) and their importance in these markets. To what extent are these services performed by third parties or by undertakings affiliated to the applicant?

(162) After-sales services are not relevant for the provision of parcel services.

6.1.3. Where appropriate, provide an estimate of the total EU-wide and EFTA-wide capacity for the last three years. During this period, what was the capacity of the applicant and what was the rate of its capacity utilisation?

(163) Outside of exceptional circumstances (e.g. COVID-19 and / or war), capacity concerns are

generally not relevant for the provision of parcel services within the EU or EFTA.

(164) The applicant notes that some capacity concerns may arise as a result of parcel machine

networks during increased shopping times - e.g. Christmas –, provided that customers do not pick

up their parcels in a timely manner. This, however, is generally not a problem for the provision of

services outside of those peak times.

6.1.3. Please indicate any other supply-side considerations you consider to be relevant.

(165) Supply in Estonia is supported by the presence of local parcel machine networks. Since parcel

machine networks are used for the provision of different postal services, market participants active

in those markets are able to easily enter the market for international parcel services as well.

STRUCTURE OF DEMAND IN THE RELEVANT MARKETS

6.1.5. Identify the five largest independent customers of the applicant in the relevant market and their individual shares of total sales of the relevant products by the applicant. Provide the name, address, telephone number, fax number and appropriate contact person, of each of these customers.

(166) The five largest independent customers of the applicant are indicated in the following table. For

clarification, the table does not include other postal operators (i.e. if, for example, customers send

parcels via Dutch Post, Dutch Post is not included in this table).

Name of the

customer

Share of

total sales of

the

Contact information

40 (94)

applicant

(%)

HANGZHOU

CAINIAO SUPPLY

CHAIN

MANAGEMENT

CO.,LTD. 11%

Address: Block B1,XiXi center, No.588 West

Wenyi Road, 310012, Xihu District,

Hangzhou, China

E-mail: [email protected]

Internet address: https://global.cainiao.com

UBSEND 8%

Address: Laplandsgade 4A, 2300

Copenhagen, Denmark

Phone: +45 41 48 38 38

Email: [email protected]

Internet address: https://ubsend.com

UKISI OÜ 9%

Address: Remmelga tn 6/1, Tallinn, 11216,

Estonia

Email: [email protected]

PEPI RER SIA 2%

Address: Parka iela 25, Valka, LV-4701, Latvia

Phone: +371 64707024

Email: [email protected]

Internet: https://www.pepirer.lv

FASHION RETAIL

S.A. 1%

Address: AVENIDA DE LA DIPUTACIÓN,

EDIFICIO INDITEX, 15143, Arteixio, Spain

Phone: 08005891603

Email: [email protected]

PACKETA

INTERNATIONAL

S.R.O 1%

Address: Zásilkovna s.r.o. Českomoravská

2408/1a, 190 00 Praha

Email: [email protected]

Internet: https://www.packeta.com

6.1.6. Explain the structure of demand in terms of:

(a) the different phases of the markets, for example, take-off, expansion, maturity and decline, and a forecast of the growth rate of demand;

(167) The applicant notes that the international parcel services market is in a growth phase, due to ever

increasing popularity of e-commerce and its related services.

(b) the importance of customer preferences, in terms of brand loyalty, product differentiation and the provision of a full range of products;

(168) The applicant notes that there are strong customer preferences on how parcel services are

provided (i.e. using the parcel machine network). However, since all main market participants

have parcel machine networks, they can all be considered substitutable from the perspective of

the customer.

(169) In relation to product differentiation and the provision of full range of products, the applicant notes

that Eesti Post as well as its main competitors all provide similar product, with very small

differences in the products in practise. The differences are a result of each of the market

participants trying to distinguish its offering from the competitors, which allows it to offer a slightly

41 (94)

different price. Overall, the product offerings are strongly influenced by the particular parcel

machine network that a market participant has. Eesti Post notes that brand loyalty is very low, if

present at all. In response to question 3 of the European Commission’s RFI dated October 24,

2024, the applicant further specifies that established companies may benefit from brand loyalty

and trust, but in Estonia, brand loyalty in the post sector is typically lower than in consumer-facing

sectors. Consumers are generally more willing to switch service providers for better service or

lower prices. However, incumbent players such as Eesti Post still may enjoy a degree of trust due

to their established reputation, but all in all the brand loyalty is very low.

(c) the degree of concentration or dispersion of demand;

(171) The applicant notes that demand is dispersed, since there is a large number of customers, with

no single customer making up more than 10 – 15 % (see table under recital (166) of the provision

of services by Eesti Post.

(d) segmentation of customers into different groups with a description of the ‘typical customer’ of each group;

(172) The applicant notes that while there can be potential distinctions made between business

customers and consumers, a segmentation into different customer groups is not warranted.

(e) the importance of exclusive distribution contracts and other types of long-term contracts;

(173) Exclusive distribution and other long-term contracts are not relevant for the provision of

international parcel services.

(f) the extent to which contracting authorities, State undertakings or similar bodies are important as a source of demand.

(174) The applicant notes that contracting authorities of other member states are important sources of

demand, since parcels originating from such entities make up an estimated 50% of all inbound

parcels. At the same time, however, the applicant explains that this share is decreasing, as Eesti

Post is at the same time entering into commercial contracts with postal operators.

(175) State undertakings or similar bodies, however, are not an important source of demand, i.e. at

least no different than a large corporation.

6.1.7. Provide estimates of the degree of consumer activity in terms of switching supplier and renegotiating contracts in the last five years. Also give the sources used for this and, where available, the necessary documents to confirm the estimates:

(176) The applicant explains that customers regularly change suppliers, thus the degree of switching

between suppliers can be considered high. This is also reflected in the relatively rapid change in

market shares year to year in all potential segments for international parcel services.

Section 5B – Domestic standard and express parcel services

5. Section 5 — Information concerning the relevant market and access to that market

This section must be completed irrespective of the reply to point 4.1 above.

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

5.1. Please give the reasons why you consider that access to the relevant market is not restricted.

42 (94)

Overview of services provided under the product market for international business parcel service

(177) The market for domestic standard and express parcel services consists of the same market

players as the international parcel service, with addition of Jet Express OÜ (“Jet Express”) and

Bullet Express OÜ (“Bullet Express”).

(178) Jet Express is primarily a transport logistics company, offering mainly services related to road

and air transport.

(179) Bullet Express offers international express courier and supply chain solutions with main

production conferences being international industries and companies. A large part of Bullet

Express's turnover comes from the export of services outside Estonia.

(180) The applicant explains that overall, the domestic standard and express parcel service market has

shown growth, thereby creating an incentive for new players to enter and existing players invest

into their business. In overall, the concentration of the market can be described as having several

strong players, such as Eesti Post, DPD and SmartPosti as well as several smaller undertakings.

(181) In response to question 13 (a) and (b) of the European Commission’s RFI dated October 24,

2024, the Estonian market for standard and express parcel services is highly competitive, with

numerous providers active in different segments. The exact number of competitors can vary

depending on the data source and the criteria used. According to the Estonian Statistical Office,

there were 430 enterprises in 2022 whose primary activities included postal and courier services,

such as the collection, transport, and delivery of letters, parcels, and other items. This includes a

broad range of providers, from local regional players to larger national and international

companies, not all of which may be active in the market:

Creditinfo data for 2023 indicates that 74 companies were involved in providing postal, parcel,

and courier services in Estonia, reflecting the fragmented nature of the market. The Estonian

Competition Authority's annual report for 2023 identifies 59 registered postal service providers in

Estonia. Among these, 48 companies are listed in the Register of Economic Activity as registered

courier service providers, offering a range of services, including both national and international

parcel delivery, as well as express and standard options. However, only 21 of these providers

were actively delivering courier services as of the end of 2023. These active courier service

providers include: Bolt Operations OÜ, AS Eesti Post, A-Kuller & Partnerid, AS Express Post, AS

DPD Eesti, OÜ EKLT, DHL Express Estonia AS, SmartPosti OÜ, FedEx Express Estonia AS, T

grupp OÜ, Autopost Terminal OÜ, Aberg Express OÜ, Euroxkuller OÜ, Venipak Eesti OÜ, DK

Logistics OÜ, Jet Express OÜ, OSC Transport OÜ, Balti Logistika AS, K Security OÜ,

43 (94)

FamLogistics OÜ, and Nova Post Estonia OÜ. These data sources confirm that the market for

standard and express parcel services in Estonia is characterized by a significant number of active

competitors, indicating a diverse competitive landscape where Eesti Post does not hold significant

market power compared to the many other players operating in the market.

(182) One notable competitor is Venipak, who has previously been active primarily on the express

parcel segment but has recently also entered into the standard parcel services segment and to

the extent that the applicant is aware plans to take further investments for rapid expansion.

Considering that the only market segment, where the applicant has an estimated market presence

of above 30% is standard parcel service, the aggressive entry of a new competitor (Venipak,

Unisend) as well as the presence of strong competitors (DPD, SmartPosti), is a strong indication

that despite the market presence of above 30%, the market is open to competition and new

undertakings can enter the segment.

(183) Applicant’s estimated data of 2024 has showcased that there have been multiple newcomers to

the standard and express parcel services as of now. Newcomers Unisend and OÜ Udrop EE59

are both new to the market but have extensively expanded. As stated in recital (110), Unisend

has 145 parcel machines across Estonia and over 750 throughout the Baltics, while Udrop has

59 parcel machines across Estonia and over 180 throughout the Baltics.

(184) Thus, in summary the applicant considers that access to the relevant market for domestic and

standard express parcel services is not restricted.

5.2. For each relevant market, for each of the last three financial years (15), and for each of the following territories:

(a) the EEA territory;

(b) the EU as a whole;

(c) the territory of the EFTA States as a whole;

(d) each Member State and each EFTA State where the applicant carries out an activity; and

(e) the relevant geographical market (16), if the applicant considers that this market is different

Please provide the information referred to in points 5.2.1 to 5.2.9

5.2.1. an estimate of the total size of the market in terms of sales value (in Euro) and volume (units) (17), indicating the basis for the calculations and sources used and providing documents, where available, to confirm these calculations;

5.2.2. the sales in value and volume, as well as an estimate of the market share held by the applicant;

5.2.3. an estimate of the market share in value (and, where appropriate, volume) of all competitors (including importers) having at least 10 % of the geographical market under consideration. Provide documents, where available, to confirm the calculation of these market shares and provide the name, address, telephone number, fax number and appropriate contact person, of these competitors;

(185) As noted under section 1.1.3 of this exemption request, standard parcel services are composed

of services using a parcel machine for final delivery and express services as services using

courier services for final delivery. Eesti Post is active in both potential segments, however notes

that while some differences exist between standard and express services, this distinction is small

59 Webpage of OÜ Udrop EE (''Udrop''): https://udrop.ee/en/

44 (94)

and is decreasing over time, the key factors include as stated in response to question 4 of the

European Commission’s RFI dated October 24, 2024:60

(a) Market Trends: The increasing preference for parcel machines among consumers suggests

that the operational and cost differences between standard and express services are

diminishing. For example, some market participants previously only active in express parcel

services (e.g. Veinpak) have started to also enter the standard parcel services market.

(b) New entrants: The entry of new market participants that offer both types of services indicates

a trend towards businesses providing a more unified service.

(c) Consumer Expectations: As customers place a higher value on speed and convenience,

strict classifications based on delivery speed becomes less relevant. Previously, the main

distinction between standard and express services was their speed, however, this boundary

has now blurred in Estonia as the delivery times for both standard and express services are

similar.

According to the applicant, both demand-side and supply-side factors support the argument

that the traditional distinctions between standard and express services are becoming less

significant in the Estonian market context. Consequently, leaving the final product market

definition open is justified.

(186) Further and for clarity, to some extent, express services by Eesti Post have been provided either

directly or recently also in cooperation with delivery platform providers (in particular Bolt61 or Wolt)

over recent years, as part of a pilot project, where the final delivery of the parcel is left to

independent service providers operating under the platform provided by Bolt or Wolt. The

standard services have been provided through parcel machines, located in population centers, in

particular close to or inside shopping malls, shops or similar facilities.62

(187) In response to question 14 (a) of the European Commission’s RFI dated October 24, 2024

regarding the differences between standard and express delivery services, the applicant further

reiterates that the delivery method is one of the key differences between standard and express

delivery services. Standard parcel services typically use parcel machines for final delivery,

whereas express services rely on courier services. However, this difference is becoming less

noticeable over time, as many consumers in Estonia prefer the convenience of parcel machines,

leading some providers previously focused solely on express services to also enter the standard

services market. Additionally, both delivery methods can achieve similar timeframes, such as

same-day or next-day delivery, effectively making the quality of service more comparable from

the customer’s perspective. Furthermore, customers often see these services as interchangeable,

with many opting for delivery to parcel machines instead of direct courier service, particularly

when convenience is a factor.

(188) As noted also in the context for the market for international parcel services, parcel machines are

highly popular in Estonia (as well as the Baltics), since they allow for non-contact delivery and

flexibility regarding when the parcel arrives at the customer. Depending on where the parcel is

handed over to Eesti Post, either same day or T+1 delivery is possible both via courier as well as

via parcel machines. This means that there is essentially no difference in the quality of parcel

60 Regarding the argument that the differences between standard and express services are small and diminishing,

please refer to the applicant’s response to question 4 of the European Commission’s RFI dated October 24, 2024. 61 See https://bolt.eu/en/cities/tallinn/ for more information. 62 In response to question 14 (b), (c) and (d) of the European Commission’s RFI dated October 24, 2024, the

applicant notes that the pilot project between Eesti Post and Wolt was a short-lived pilot test, rather than a formalized

agreement or strategic cooperation. The test was not a continuation, and it was not designed to be a long-term

partnership.

45 (94)

service and express service for the end-customer (in both the B2X and C2X business segments),

and the customer receives the parcel in a relatively similar timeframe.63 In response to question

15 (b) of the European Commission’s RFI dated October 24, 2024, the applicant clarifies that

internal data from Eesti Post, as illustrated in the attached chart, below, shows that the majority

of parcels in Estonia, Latvia, and Lithuania are delivered within the same timeframe, typically on

the same or first day after dispatch. Specifically, when using parcel machines, approximately 95%

of packages are delivered the same or next day in Estonia. In contrast, for courier services, the

percentage of the same or next-day deliveries is about 14% lower. While it is traditionally

understood that express services (i.e. courier services) are faster and more reliable than standard

parcel services (i.e. parcel machine services), Eesti Post’s data suggests that, in practice, the

delivery performance of express and standard services is more comparable than commonly

perceived. Specifically, Eesti Post's internal data reveals that parcel machines demonstrate

higher reliability and efficiency compared to couriers.

For further clarification, regarding the B2X and C2X segments, Eesti Post does not possess

specific data that differentiates the delivery speeds between these two segments. However, the

underlying infrastructure supporting both B2X and C2X services in Estonia is largely identical.

Both segments rely predominantly on the same network of parcel machines. Consequently,

parcels in both the B2X and C2X segments are delivered to similar collection points (i.e., parcel

machines), and the delivery timelines are generally aligned. In the light of the above, while

express services may traditionally be viewed as faster than standard services, Eesti Post’s

internal data suggests that delivery times are generally comparable. Similarly, the infrastructure

and operational processes supporting both B2X and C2X deliveries result in similar delivery

timeframes for customers in both segments. Accordingly, the applicant believes that the

63 In response to question 15 (a) of the Commission’s RFI dated October 24, 2024, please note that when referring

to “parcel service,” the applicant is discussing standard parcel delivery services. The statement highlights that both

standard and express delivery options offer comparable quality and delivery times for the end-customer. In the

context of the Estonian market, both services can provide same-day or next-day delivery, leading to a similar

experience for customers in both B2X and C2X segments.

46 (94)

Commission's previous practice of distinguishing between standard and express services is not

applicable in Estonia. Specifically, the factors the Commission has relied upon to differentiate

between these services – mainly that express services are generally faster and more reliable than

standard services – are not relevant in the context of the points raised above. Therefore, it is not

possible to draw the same conclusions for Estonia based on the Commission's past approach.

(189) In light of the above, customers consider the services as alternatives and interchangeable, and it

is common that courier services are diverted in favour of delivery to parcel machines by request

of the final customer (where this is possible). This can happen most often when it is inconvenient

for the customer to receive the parcel directly from the courier. Moreover, in practice, courier

services in Estonia are provided in a manner that it is not possible for the addressee to choose

the exact time at which the addressee can receive the parcel, for example at the addressee’s

home or office. In practice, this means that if the courier fails to deliver the package to the

addressee at certain time, the courier offers the possibility to deliver the parcel to the nearest

parcel machine for the addressee, which further demonstrates that in terms of quality of content,

parcel service and express service are interchangeable for the consumer.

(190) Furthermore, in response to question 15 (c) of the European Commission’s RFI dated October

24, 2024, regarding the differences in the infrastructure for the different stages of the delivery

chain for C2X an B2X, the applicant explains that the infrastructure for C2X and B2X parcel

delivery services is largely the same in Estonia. Both segments primarily use parcel machines for

deliveries, with 25% of C2C deliveries and 14% of B2B deliveries being directly handled by

couriers. Parcels are centrally sorted and share the same linehaul network for transportation,

meaning there is no significant infrastructure difference between C2X and B2X in terms of delivery

handling. The main difference arises in B2B services, where goods are often directed to parcel

machines, though they still use the same core infrastructure. Unlike B2C, B2B logistics are

primarily managed by courier services and involve the transportation of heavier and bulkier items.

Regarding the collection flow, there is a slight difference in how parcels are collected for the two

segments. For C2X deliveries, most parcels are collected from parcel machines, which are

accessible to private customers, while B2X collections typically involve couriers or direct injection

of parcels into sorting facilities. However, it is important to note that the resources involved in the

collection process are not separated, the same couriers generally handle both C2X and B2X

collections. Couriers may collect parcels from parcel machines for C2X customers or directly from

business customers for B2X services, further highlighting the lack of distinct infrastructure for

these segments. Overall, while there are minor differences in service processes, the infrastructure

supporting parcel delivery for both C2X and B2X segments is largely the same, relying on the

same sorting facilities, linehauls, and couriers, with distinctions mainly arising from the type of

collection method used (parcel machines for C2X vs. couriers/direct injection for B2X). Therefore,

the applicant believes that the infrastructure used to serve these segments does not support the

view that they must be considered distinct in terms of the delivery network.

(191) Since the market for domestic parcel services is national in scope, as explained under recitals

(64) – (65) above, the size of the market as defined by EEA territory or EU as a whole is not

relevant for the assessment of direct exposure to competition. Consequently, the applicant

requests the Commission to waive the requirement stipulated under section 5 points (a) – (c) to

provide data for the relevant market for each of the last three financial years.

(192) In respect to section 5.2 points (d) – (e), the applicant notes the product market should be

considered national in scope and the services are not provided in any EFTA state.

(193) For ease of data interpretation, the applicant has provided information requested under points

5.2–1 - 5.2.3 in a single table, segmenting the information based on value and volume.

(194) The applicant has provided market data for the total market for domestic parcel services in tables

9 – 22, along with a potential segmentation based on express and standard parcels services.

47 (94)

(195) In respect to the market data, the applicant notes that public data is not fully available, thus the

applicant notes that the market data is the best estimate of the applicant and may not reflect

actual market shares.

(196) For estimating the market share based on value, the applicant has access to its own internal data

and has provided estimates for the market shares of its competitors. The market share of its

competitors has been derived from their annual reports.

(197) For the calculation of domestic parcel services in terms of volume (Table 12), Eesti Post only has

access to its own volume data. For the purpose of calculating the assumed share of other

competitors' volumes, it is assumed that the market share of the competitors is the same as their

market share in terms of value. This approach is also supported by the fact that the price levels

of the competitors are relatively similar. In this way, the total assumed market volume has also

been derived.

(198) In respect to the split between express and standard parcel services, the applicant has available

the internal data from Eesti Post. In respect to the market shares of competitors of Eesti Post, the

applicant has provided data based on its best estimates, taking into account the business model

and focus of each particular competitors. E.g. it is estimated that SmartPosti Estonia has a similar

split to Eesti Post between standard and express parcel services, due to its ownership relation to

the Finnish incumbent postal operator. In respect to other competitors, such as DPD (also DHL,

who is currently not covered in the market data, due to lack of any reliable market data), due to a

stronger international influence, there has been a stronger preference for express parcel services,

which is reflected in their market shares as well.

(199) Lastly, the market data included both domestic and inbound statistics. It does not include revenue

or value estimates for outgoing parcels, since such parcels are part of the market for international

parcel services (see Section 5A of this application).

(200) For clarity, the market data below is for the following segmentations:

(a) Total market combining standard and express services (tables 9-10);

(b) Standard parcel services (tables 11-12);

(c) B2X standard parcel services (tables 13-14);

(d) C2X standard parcel services (tables 15-16);

(e) Express parcel services (tables 17-18);

(f) B2X express parcel services (tables 19-20);

(g) C2X express parcel services (tables 21-22).

Table 9 Standard and express services (value)

2021 2022 2023

Value (EUR) Market share (%)

Value (EUR) Market share (%)

Volume (units)

Value (EUR)

Eesti Post 28 972 815 24% 28 353 331 23% 24 671 652 21%

DPD 19 642 923 16% 21 282 836 18% 22 045 611 19%

SmartPosti 16 036 816 13% 16 835 665 14% 17 622 798 15%

Venipak 11 365 792 9% 12 696 591 11% 13 040 272 11%

Jet Express 6 564 403 5% 7 804 304 6% 8 061 846 7%

Bullet Express 6 299 081 5% 2 158 594 2% 2 143 540 2%

DHL - - - - 140 000 0,1%

48 (94)

EKLT/UPS - - - - 300 000 0,3%

Other 31 255 415 26% 31 567 969 26% 30 989 150 26%

Total market 120 137 245 100% 120 699 290 100% 119 014 868 100%

Table 10 Standard and express services (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Volume (units)

Eesti Post 8 794 685 24% 9 285 441 23% 8 763 878 21%

DPD 6 229 569 17% 7 118 680 18% 8 136 275 19%

SmartPosti 5 130 233 14% 5 631 191 14% 5 947 744 14%

Venipak 3 298 007 9% 4 246 754 11% 3 986 590 9%

Jet Express 1 832 226 5% 2 610 383 6% 3 287 588 8%

Bullet Express 1 832 226 5% 722 006 2% 824 460 2%

DHL - - - - 56 189 0,1%

EKLT/UPS - - - - 62 500 0,1%

Other 9 527 575 26% 10 558 850 26% 11 373 457 27%

Total market 36 644 521 100% 40 173 305 100% 42 438 681 100%

Table 11 Standard parcel services (value)

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Volume (units)

Value (EUR)

Eesti Post 20 614 809 48% 20 140 998 44% 17 178 963 40%

DPD 8 839 315 21% 10 641 418 24% 11 053 028 26%

SmartPosti 11 410 555 27% 11 959 339 26% 12 585 553 29%

Venipak 1 704 869 4% 2 539 318 6% 1 933 567 4%

DHL - - - - 140 000 0%

EKLT/UPS - - - - 300 000 1%

Total market 42 569 548 100% 45 281 073 100% 43 191 112 100%

Table 12 Standard parcel services (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Volume (units)

Eesti Post 7 527 993 49% 7 953 246 46% 7 425 096 44%

DPD 2 180 349 14% 2 491 538 14% 2 590 927 15%

SmartPosti 4 391 329 28% 4 823 276 28% 5 082 007 30%

Venipak 1 319 203 9% 2 123 377 12% 1 616 848 10%

Jet Express - - - - 56 189 0%

Total market 15 418 874 100% 17 391 437 100% 16 833 567 100%

49 (94)

Table 13 Standard parcel services B2X (value)

2021 2022 2023

Value (EUR) Market share (%)

Value (EUR) Market share (%)

Volume (units)

Value (EUR)

Eesti Post 17 366 991 48% 17 051 457 44% 14 749 493 39,1%

DPD 7 446 701 21% 9 009 071 23% 9 747 151 25,8%

SmartPosti 9 612 847 27% 10 124 829 26% 11 117 945 29,5%

Venipak 1 653 723 5% 2 463 139 6% 1 874 452 5,0%

DHL - - - - 70 000 0,2%

EKLT/UPS - - - - 150 000 0,4%

Total market 36 080 262 101% 38 648 496 99% 37 709 041 100%

Table 14 Standard parcel services B2X (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Volume (units)

Eesti Post 6 364 705 48% 6 767 409 45% 6 643 916 44%

DPD 1 843 423 14% 2 120 047 14% 2 293 735 15%

SmartPosti 3 712 745 28% 4 104 121 27% 4 506 683 30%

Venipak 1 279 627 10% 2 059 676 14% 1 567 416 10%

DHL - - - - 34 314 0%

EKLT/UPS - - - - 31 250 0%

Total market 13 200 500 100% 15 051 253 100% 15 077 313 100%

Table 15 Standard parcel services C2X (value)

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Volume (units)

Value (EUR)

Eesti Post 3 247 818 50% 3 089 541 47% 2 429 470 44%

DPD 1 392 615 21% 1 632 347 25% 1 305 878 24%

SmartPosti 1 797 708 28% 1 834 510 28% 1 467 608 27%

Venipak 49 612 1% 73 894 1% 59 115 1%

DHL - - - - 70 000 1%

EKLT/UPS - - - - 150 000 3%

Total market 6 487 753 100% 6 630 292 101% 5 482 071 100%

Table 16 Standard parcel services C2X (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Volume (units)

Eesti Post 1 163 288 52% 1 185 837 51% 781 180 44,5%

DPD 336 926 15% 371 491 16% 297 193 16,9%

50 (94)

SmartPosti 678 585 31% 719 155 31% 575 324 32,8%

Venipak 38 389 2% 61 790 3% 49 432 2,8%

DHL - - - - 21 875 1,2%

EKLT/UPS - - - - 31 250 1,8%

Total market 2 217 187 100% 2 338 273 100% 1 756 254 100,0%

Table 17 Express parcel services (value)

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Volume (units)

Value (EUR)

Eesti Post 8 358 006 11% 8 212 333 11% 7 492 689 10%

DPD 10 803 608 14% 10 641 418 14% 10 992 583 14%

SmartPosti 4 626 261 6% 4 876 326 6% 5 037 244 7%

Venipak 9 660 923 12% 10 157 273 13% 11 106 704 15%

Jet Express 6 564 403 8% 7 804 304 10% 8 061 846 11%

Bullet Express 6 299 081 8% 2 158 594 3% 2 143 540 3%

Other 31 255 415 40% 31 567 969 42% 30 989 150 41%

Total market 77 567 697 99% 75 418 217 100% 75 823 757 100%

Table 18 Express parcel services (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Volume (units)

Eesti Post 1266692 6% 1332195 6% 1 338

783 5%

DPD 4 049 220 19% 4 627 142 20% 5 545

347 22%

SmartPosti 738 904 3% 807 915 4% 865

737 3%

Venipak 1 978 804 9% 2 123 377 9% 2 369

742 9%

Jet Express 1 832 226 9% 2 610 383 11% 3 231

399 13%

Bullet Express 1 832 226 9% 722 006 3% 824

460 3%

Other 9 527 575 45% 10 558 850 46% 11 373

457 45%

Total market 21 225 647 100% 22 781 868 100% 25 548

925 100%

Table 19 Express parcel services B2X (value)

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Volume (units)

Value (EUR)

Eesti Post 8 018 501 11% 7 892 251 11% 7 148 426 10%

DPD 10 364 761 14% 10 226 660 14% 10 564 140 14%

51 (94)

SmartPosti 4 438 341 6% 4 686 268 6% 4 840 914 7%

Venipak 9 177 877 12% 9 649 409 13% 10 582 081 14%

Jet Express 6 236 183 8% 7 414 089 10% 7 658 754 10%

Bullet Express 5 984 127 8% 2 050 664 3% 2 118 336 3%

Other 30 942 861 41% 31 252 289 43% 30 676 662 42%

Total market 75 162 651 100% 73 171 630 100% 73 589 314 100%

Table 20 Express parcel services B2X (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Volume (units)

Eesti Post 1 220 038 6% 1 288 338 6% 1 297 355 5%

DPD 3 900 081 19% 4 474 813 20% 5 375 289 22%

SmartPosti 711 689 3% 781 317 4% 839 187 3%

Venipak 1 879 864 9% 2 017 208 9% 2 257 808 9%

Jet Express OÜ 1 740 615 8% 2 479 863 11% 3 069 829 12%

Bullet Express OÜ 1 740 615 8% 685 906 3% 814 766 3%

Other 9 432 300 46% 10 453 262 47% 11 258 770 45%

Total market 20 625 201 100% 22 180 707 100% 24 913 004 100%

Table 21 Express parcel services C2X (value)

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Volume (units)

Value (EUR)

Eesti Post 339 504 14% 320 081 14% 344 263 15%

DPD 438 845 18% 414 756 18% 428 443 19%

SmartPosti 187 920 8% 190 058 8% 196 330 9%

Venipak 483 046 20% 507 864 23% 524 623 23%

Jet Express OÜ 328 220 14% 390 215 17% 403 092 18%

Bullet Express OÜ 314 954 13% 107 930 5% 25 204 1%

Other 312 554 13% 315 680 14% 312 488 14%

Total market 2 405 043 100% 2 246 583 100% 2 234 443 100%

Table 22 Express parcel services C2X (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Volume (units)

Eesti Post 46 654 8% 43 857 7% 41 428 7%

DPD 149 138 25% 152 329 25% 170 058 27%

SmartPosti 27 215 5% 26 597 4% 26 549 4%

Venipak 98 940 16% 106 169 18% 111 934 18%

Jet Express OÜ 91 611 15% 130 519 22% 161 570 25%

Bullet Express OÜ 91 611 15% 36 100 6% 9 694 2%

52 (94)

Other 95 276 16% 105 589 18% 114 687 18%

Total market 600 446 100% 601 161 100% 635 921 100%

(201) In respect to the overall market for standard and express parcels, the market overall has been

increasing due to the increasing popularity of e-commerce. This increase is also reflected in the

increase in the value and volume offered by most market participants, apart from Eesti Post. In

contrast to the market, the market share of Eesti Post has been decreasing in terms of both

volume and value, with the decrease being more significant in terms of volumes.

(202) This is partially due to Eesti Post having an increase regulatory burden (it is subject to public

tender rules), which limits its ability to adopt to market changes. While Eesti Post remains the

largest market participant by 21% (in terms of standard and express services taken together, see

Table 9 and Table 10), there are several other market participants able to operate on the market

profitably. Two of them (DPD and SmartPosti) having very close market shares to Eesti Post,

however there are also number of other competitors on the market of courier or express parcel

services as outlined in recital 181. This indicates that while there may be some scale advantages,

these are not significant enough to act as barriers to entry to the market and smaller competitors

can be as efficient as smaller market players. In response to question 16 of the European

Commission’s RFI dated October 24, 2024, the “scale advantages” Eesti Post refers to primarily

involve factors such as economies of scale in operations, purchasing power, and limited brand

recognition that companies like Eesti Post may benefit from. For example, companies like Eesti

Post can often spread costs over a larger volume of services, leading to lower average costs per

unit. This includes costs associated with e.g. logistics, transportation, and infrastructure. These

market players may also negotiate better terms with suppliers due to their higher purchasing

volumes. However, despite these advantages, the presence of numerous smaller competitors

demonstrates that they can operate efficiently and profitably without being significantly affected

by the scale advantages of these players. The latter means that barriers to entry are relatively

low, enabling smaller firms to also succeed.

(203) Overall, the applicant notes that the market is highly competitive with no particular competitor

having a strong market presence.

(204) In respect to a segmentation into express and standard parcel services, while the main market

participants are present on both segments and historically there has been market participants that

focused only on the express services market (due to not requiring a parcel machine network), this

trend is changing, with at least one aggressive entry from the express parcel services to standard

parcels services by Venipak. This means that the segmentation between express and standard

parcels, while it may have been relevant in the past, may no longer be relevant currently, at least

for the purposes of assessing whether the markets are open to competition. In any case, the entry

and rapid expansion of Venipak clearly indicates that the market is open to competition.

(205) The applicant further explains that the aforementioned trend started changing since 2016, with

the entry of DPD into the standard parcel market. Further, to the extent that the applicant is aware,

two further entries into the market are expected in 2024. In particular, Latvijas Pasts, the Latvian

State-owned postal services provider, and the Lihtuanian state owned postal services provider

Lietuvos Paštas have both announced aggressive entry plans. Lietuvos Paštas has in particular

noted that it will open up a total of 300 parcel machines by March 2024 in Latvia and Estonia

combined.64 Lietuvos Paštas plans have held true as through the Unisend subsidiary, parcel

64 Announcement is available here: https://www.aripaev.ee/uudised/2023/09/20/leedu-post-murrab-eestis-

pakiautomaatide-turule. The article may be behind a paywall, however we are able to provide a google translated

PDF of the article if necessary.

53 (94)

machines have been installed all over Estonia (see recital (110)).65 Even larger global players

such as DHL, who as historically only provided express services has opened up 76 parcel

machines in Estonia within 2023.

(206) In response to the Commission’s question regarding the competitive pressure faced by Eesti Post

in the standard parcel delivery services market and its sub-segments in Question 4 of the

European Commission’s RFI dated December 16, 2024, Eesti Post would like to provide further

context and arguments to support this view. While it is acknowledged that Eesti Post currently

holds relatively high market share, estimated at approximately 44% by volume and 40% by value,

it is important to highlight a key trend: the market share of Eesti Post has been decreasing year

over year. This decline is significant, and the gap between Eesti Post and its closest competitors

is narrowing, with competitors now closing in to within 10% of Eesti Post's market share. This shift

is a clear indicator that Eesti Post is increasingly subject to competitive pressure. Several concrete

factors contribute to this trend. For instance, Eesti Post recently lost a major client, ASOS, to

Venipak. This loss resulted in a 1.5% market share decrease per month in Estonia. Additionally,

Eesti Post has been unable to secure major clients like Zalando, H&M, Bestsecret, and Modivo,

which have instead partnered with competitors such as SmartPosti and DPD. SmartPosti and

DPD benefit from the ability to cross-subsidize between countries, enabling them to offer more

competitive pricing and service packages, which Eesti Post has been unable to effectively match.

On the B2B side, Eesti Post faces significant challenges in competing for large-scale clients. For

example, companies like Würth, Tamrex, Nordic Digital, Stokker, and Charlot have all chosen to

work with DPD rather than Eesti Post. This is further evidence of the competitive pressure Eesti

Post faces, particularly from competitors with strong positioning in the market. In addition to these

market dynamics, another factor is the profitability of Eesti Post compared to its competitors. The

financial results for the year 2023 showed that Eesti Post had a net profit margin of -1%, while

DPD and other competitors reported net profit margins of 4.9% and 2.9%, respectively. This

disparity in profitability suggests that in the event of a price war or market downturn, competitors

would be better positioned to remain profitable for a longer period than Eesti Post. This further

highlights the competitive pressure on Eesti Post, as it faces an environment where rivals are not

only better capitalized but also more capable of adapting to market fluctuations. In conclusion,

the combination of a shrinking market share, the loss of key clients to competitors, and the

stronger financial performance of rivals collectively demonstrates that Eesti Post is indeed facing

significant competitive pressure in the standard parcel delivery services market and its sub-

segments.

(207) In respect to express parcel services, due to historic reasons, there are more market participants

on this segment. However, all major competitors are also present both segments, thus for the

purposes of assessing whether the market is open to competition, it can be left open whether

there is a need to segment the market further into express and standard parcel services. In any

case, there are several equal competitors on the express parcel services market, indicating that

the market is open to competition.

(208) Lastly, in relation to a potential segment between C2X and B2X, since the majority of business

volumes are connected to B2X, assessing the market based only on the C2X segment does not

correctly reflect the market share of the market players, since it would not be viable to stay on the

market only in relation to C2X. That said, since there is little, if no customer loyalty between

65 In response to question 17 of the European Commission’s RFI dated October 24, 2024, to the best of Eesti Post’s

knowledge, Latvijas Pasts and Lietuvos Paštas have announced their intention to enter the Estonian market with a

focus on standard parcel delivery services in 2024. However, we do not have full visibility on their complete strategic

plans at this stage. What we can confirm is that both postal operators have already made significant moves to

establish themselves in the standard parcel delivery segment in Estonia in 2024.

54 (94)

different market participants (either in respect to standard or express parcel services), customers

can easily switch from one supplier to another, should the quality of services or prices become

uncompetitive.

(209) The contact details of the competitors are provided below:

Competitor Contact info

DPD Eesti AS

Address; Harju County, Rae parish, Lehmja village, Taevavärava tee 1,

75306

Phone: +372 613 0012

Email address: [email protected]

Internet address: https://www.dpd.com/ee/en/

SmartPosti OÜ

Address; Harju County, Rae parish, Lehmja village, Loomäe tee 13, 75306

Phone: +372 69 90 431

Email address: [email protected]

Internet address: https://www.smartposti.ee/

Venipak Eesti

OÜ

Address; Harju County, Tallinn, Lasnamäe, Osmussaare tn 8, 13811

Phone: +372 641 4481

Email address: [email protected]

Internet address: https://venipak.com/ee/en/

Jet Express OÜ

Address; Harju County, Tallinn, Nõmme, Liivalao tn 11, 11216

Phone: +372 646 3222

Email address: [email protected]

Internet address: https://kuller.ee/en/

Bullet Express

OÜ

Address; Harju County, Tallinn, Lasnamäe, Lõõtsa tn 8a, 11415

Phone: +372 564 829 36

Email address: [email protected]

Internet address: https://www.bulletexpress.ee

5.2.4. an estimate of the total value, volume and source of imports from outside the EEA territory and identify:

(a) the share of such imports attributable to the applicant;

(b) an estimate of the extent to which any quotas, tariffs and non-tariff barriers to trade constitute barriers to these imports; and

(c) an estimate of the extent to which transportation and other costs affect these imports.

(210) The applicant explains that the provision of postal services requires the presence of a local postal

network, which in turn requires local presence for market players. Consequently, the applicant

notes that the share of imports from outside the EEA territory is not relevant for assessing the

direct exposure to competition for the provision of postal services.

5.2.5. the extent to which trade between States within the territory of the EEA is hindered by:

(a) transportation and other costs; and

(b) other non-tariff barriers to trade.

(211) The applicant explains that due to the national geographic market, trade between EU or EEA

States is not relevant for the current product market assessment.

5.2.6. the manner in which the applicant produces and sells the products or services; for example, whether they are manufactured locally, or are sold through local distribution networks;

55 (94)

(212) The applicant explains that the provision of express parcel services can either be initiated by a

customer using a self-service option (either online or through a digital interface of a parcel

machine), or by an entity active in e-commerce requesting the service, generally based on a

framework agreement or simply based on general terms and conditions of a particular postal

operator.

(213) The applicant notes in this context that some e-commerce platforms do have integration which

combines the payment solution used for the platform with a delivery option. While previously,

Eesti Post benefited from such integration due to a group entity providing payment solutions

integration for e-commerce platforms (AS Maksekeskus), that entity has since been sold and

Eesti Post no longer has control over the entity.

5.2.7. a comparison of the applicant's and its competitors' price levels in each Member State and EFTA State and a similar comparison of price levels between the EU, the EFTA States and other areas where these products are produced (for example, Eastern Europe, the United States of America, Japan, or any other relevant area);

(214) The applicant notes that the price points of Eesti Post and its main competitors are highly

comparable, with very minor differences between the services. This is because the customers

are generally highly price sensitive and brand loyalty or customer preference for one postal

service provider vs another is minimal, if present at all. One potential exception to this is

SmartPosti Estonia, owned by the Finnish incumbent postal entity, where Finnish nationals or

customers with a strong connection to Finland have a preference for services provided by

SmartPosti. No such preference is apparent for Eesti Post.

5.2.8. the nature and extent of the vertical integration of the applicant compared with the largest competitors;

(215) Eesti Post notes that vertical integration is limited, if present at all.

5.2.9. information on the cost structure of the applicant (18). Also, specify any assets or infrastructure used jointly with other entities or used to carry out more than one activity covered by Directive 2014/25/EU. Where the use of such assets or infrastructures is subject to special conditions, such as universal service obligations or special rights, please specify.

(216) The applicant notes that the assets and infrastructure used for the provision of domestic postal

services is made up predominantly by:

(a) parcel machines;

(b) post offices;

(c) distribution centres;

(d) sorting line and related equipment;

(e) commercial vans and truck;

(f) domestic transport;

(g) frontline workwear;

(h) office;

(i) IT: Core system (infa, ERP, CRM, DWH);

(j) IT: Parcel related;

(k) software licences to operate the self-service and online interfaces;

(l) software to operate the logistics.

(217) Out of the above, the distribution centres and sorting lines are also used for all other services

covered by Directive 2014/25/EU.

(218) Parcel machines and software is used in order to provide international and domestic parcel

services and international letters, since parcels can currently be sent cross border within the

Baltics, similarly on how domestic parcels are sent by customers.

56 (94)

5.3. Please provide the following information:

5.3.1. Over the last five years, has there been any significant entry to the geographical market(s) for the relevant products (19)? If the answer is ‘yes’, where possible provide the name, address, telephone number and fax number of the undertaking concerned, as well as the appropriate contact person, and an estimate of their current market share.

(219) The applicant is not aware any significant entry over the last five years. Nevertheless, Venipak

and Jet Express OÜ has expanded very strongly in the market, with its market share increasing

both in terms of value and volume during the last 3 years.

(220) DHL has also opened up 76 parcel machines in 2023, however to the extent that the applicant is

aware, DHL remains primarily focused on courier services.

(221) To the extent that the applicant is aware, both the Latvian and Lithuanian state-owned postal

operators have announced their plan to enter the market in Estonia in 2024.

5.3.2. In the opinion of the applicant are there any undertakings (including those at present operating only in markets outside the EU or outside the EEA) that could enter the market? If the answer is ‘yes’, please explain why and identify such undertakings by name, address, telephone number, fax number and appropriate contact person, and give an estimate of the time within which such market entry is likely to occur.

(222) The applicant is not aware of any undertakings form outside the EEA that have made preparation

or intend to enter the Estonian market.

5.3.3. Describe the various factors influencing entry into the relevant markets in this case, from both a geographical and product viewpoint. In so doing, take account of the following, where appropriate:

(a) the total costs of entry (research and development, distribution systems necessary, promotions, advertising, after-sales service, etc.) on an equivalent scale to that of a significant viable competitor, indicating the market share of a such competitor;

(223) The applicant notes that the same level of investment is needed to enter the market for both

domestic and international services. An extensive delivery network can be a barrier for new

entrants, as they may need time to develop a comparable and competitive infrastructure. While

this can be a challenge in larger countries, Estonia's relatively small geographical size and well-

developed infrastructure make it easier for new entrants to build up a competitive network within

a reasonable time frame. In response to question 2 of the European Commission’s RFI dated

December 16, 2024, the applicant explains that the network’s setup time depends on the scope

of the network. For a minimal parcel network covering Tallinn and Tartu, which includes about

70% of the population, courier-based operations can typically be set up in less than 3 months,

focusing on hiring personnel and acquiring fleet, with no permits required. If the network is based

on owned parcel machines, the setup would generally take around 6 months, mainly due to

negotiations with landlords for machine locations, but again, no permits are needed. Alternatively,

if parcel machine-based operations utilize existing networks, the time frame is shortened to about

3 months, depending on IT integration resources, with no permits required. For full national

coverage, including more rural areas, the setup time would be similar due to the country’s small

geographic size.

(224) The network must also be built efficiently to offer competitive pricing and reliability. For example,

a company can start by offering courier services only in densely populated areas (e.g., Tallinn),

avoiding rural regions at first and gradually expanding as the business grows. This approach

allows new entrants to focus on high-demand urban areas, minimizing initial investment and

logistical complexity. More specifically, the main items necessary for market entry are either a

courier service network or a parcel machine network. This can be done step by step, with the total

costs estimated at around MEUR 1 – 1.5. By entering the market, it is estimated that a new entrant

57 (94)

could achieve a minimum market share of 5-10%. To clarify, if entering one business segment

(e.g. only the domestic market), the market share could reach around 10%. If, on the other hand,

one enters international and domestic markets at the same time, the market share could be

around 5%.

(225) In addition, new entrants will need to invest in advanced routing and logistics software, which can

be expensive. However, since Estonian consumers are very tech competent, they are more likely

to adopt tech-driven solutions. This makes it easier for new companies to succeed if they offer

innovative features like AI-based route optimization or real-time tracking. Additionally, such

software is widely available in today’s IT market, with many options offering low-cost or even free

options, allowing them to begin with minimal financial commitment.

(226) In response to question 2 of the European Commission’s RFI dated December 16, 2024,

regarding the costs associated with advanced routing and logistics software, the pricing for such

solutions varies depending on the scale and features required. For entry-level solutions, prices

typically range from $10 to $50 per user per month, providing basic route planning, mobile apps,

and limited analytics. Examples of SaaS-based solutions include Circuit66, Onfleet and

OptimoRoute67. Mid-tier solutions can range from $100 to $500 per month for small teams or $10

to $50 per vehicle per month for larger operations, offering features like real-time tracking,

dynamic route optimization, and integration with third-party platforms. Examples of mid-tier

solutions include Routific68, LogiNext69, and Route4Me70. For enterprise-level solutions, pricing

can range from $1,000 to $10,000+ per month, with advanced features such as AI-based

predictive analytics, custom integrations, and scalability for global operations. Examples of

enterprise-level solutions include Shipsy71, FarEye72, and Descartes73. Regarding the adoption of

tech-driven solutions, Estonian consumers are highly receptive to digital and software-based

solutions for parcel sending. This is evident from the widespread use of parcel machines, with

80% of parcels being ordered via these machines, and from the high adoption of e-commerce,

which already accounts for nearly 25% of total retail trade volume. Additionally, 55% of online

purchases are made from Estonian online stores, while 45% are cross-border. Estonians are also

strong users of e-payments, with 76% of the population using them regularly. Estonians are

accustomed to using online platforms and mobile apps to prepare for parcel shipments, with

various international studies showing that 90% of initial product searches and 60% of online

purchases are made via mobile phones. This tech-savvy consumer base, combined with over

9,000 online stores in the country, further reduces the need for customer service staff, as

consumers are comfortable navigating digital solutions themselves. Accordingly, high level of

consumer competence in using technology helps new entrants quickly establish their presence in

the market with minimal investment in customer service personnel, enabling faster market entry.

(c) the share of such imports attributable to the applicant;

(227) The applicant is not aware of any legal, regulatory or other similar barriers to entry.

66 https://getcircuit.com/teams/pricing 67 https://optimoroute.com/ 68 https://www.routific.com/v3-pricing 69 https://www.loginextsolutions.com/company/aboutus 70 https://route4me.com/ 71 https://shipsy.io/first-mile-pickup/?utm_source=chatgpt.com 72 https://fareye.com/products/route-planning-software 73 https://www.descartes.com/home

58 (94)

(d) any restrictions created by the existence of patents, know-how and other intellectual property rights in these markets and any restrictions created by the licensing of such rights;

(228) The applicant notes that generally, no barriers to entry result from the existence of patents, know-

how and other intellectual rights. Further, while some licenses are generally required for

administrative tasks such as accounting, as well as for operating the customer interfaces of the

parcel machines, such licenses are freely available and can easily be acquired from the market.

(e) the extent to which the applicant is a licensee or licensor of patents, know-how and other rights in the relevant market;

(229) Eesti Post is not a licensor of any critical patents, know-how or other rights related to market entry.

While Eesti Post is a licensee of a number of software licenses (administrative programs, e.g. MS

word etc.), such licenses should not be considered as a barrier to entry.

(f) the importance of economies of scale for the production of products in the relevant markets;

(230) The applicant notes that due to the strong reliance on parcel machine networks, the running costs

are predominantly fixed, allowing benefits from economies of scale. That said, the applicant notes

that all the major market players have sufficient volume in order to benefit from the economies of

scale, thus no competitive advantage arises in respect to closeness of competition between the

main market players.

(231) Economies of scale are even less present in the express parcel services market, where parcel

machine networks are not required. That said, the current market trend is that costumers expect

delivery companies that offer express parcel services to also offer standard parcel services.

(232) All in all, and as stated in response to Question 3 of the European Commission’s RFI dated

October 24, 2024, while larger companies can take advantage of economies of scale to reduce

costs, Estonia’s relatively small size means that the market is not large enough to create the same

kind of massive operational barriers that may exist in larger countries.

(g) access to sources of supply, such as availability and raw materials.

(233) The applicant notes that access to sources of supply is freely available.

RESEARCH AND DEVELOPMENT

5.3.4 Give an account of the importance of research and development in the ability of an undertaking operating in the relevant market(s) to compete in the long term. Explain the nature of the research and development carried out by the applicant in the relevant markets.

In so doing, take account of the following, where appropriate:

(a) trends and intensity of research and development (20) in these markets and for the applicant;

(234) The applicant notes that research and development is of limited importance when it comes to the

provision of express parcel services. The services may be impacted by developments in

connected sectors, such as transport, IT, however the postal sector itself is rather in the role of

an adopting entity.

(b) technological developments in these markets over an appropriate time period (in particular developments in products and/or services, production processes, distribution systems, and so on);

(235) The applicant notes that express parcel services have seen limited change in the core of the

service in recent years, however there is some indication of this trend shifting. One notable

example is the entry into the market by platforms, which generally provided food delivery from

59 (94)

restaurants, such as Bolt74 and Wolt75. Rather than express delivery of parcels within 24 hours,

the platform providers are able to deliver goods to the customer within an hour of the purchase

from a store. That said, this is feasible mostly in large population centres, due to the closeness

between the outlet of the store and generally limited to smaller parcels, due to delivery taking

place by hand.

(c) the major innovations that have been made in these markets and the undertakings responsible for these innovations;

(236) The applicant is not aware of any major innovations that have been made in respect to express

parcel services.

(d) the cycle of innovation in these markets and where the parties are in this cycle of innovation.

(237) The applicant notes that the market can be considered mature, with potential developments being

evolutionary, rather than revolutionary. That said, should major developments take place in other

sectors, such as transport, it cannot be excluded that a revolutionary evolution would take place,

which would replace the express parcel services as they are currently provided.

COOPERATION AGREEMENTS

5.3.5 To what extent do cooperation agreements (horizontal or vertical) exist in the relevant markets?

5.3.4 Give details of the most important cooperation agreements concluded by the applicant in the relevant markets, such as research and development, licensing, joint production, specialisation, distribution, long term supply and exchange of information agreements.

(238) The applicant notes that the important cooperation agreements relate only to the development of

the logistics IT infrastructure. Outside of that, the applicant is not aware of any major cooperation

agreements.

(239) That said and as noted earlier, cooperation agreements are possible in order to combine delivery

services with other ancillary services, such as payment provision services for a more seamless

experience for the final customer. The services themselves would nevertheless be provided

separately.

6. Section 6 — Exposure to competition

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

According to Article 34(2) of Directive 2014/25/EU, the question of whether an activity is directly exposed to competition must be decided on the basis of criteria that are in conformity with provisions on competition of the TFEU, such as the characteristics of the goods or services concerned, the existence of alternative goods or services, the prices, and the actual or potential presence of more than one supplier of the goods or services in question.

74 Webpage of Bolt: https://bolt.eu/en/cities/tallinn/ 75 Webpage of Wolt: https://wolt.com/en/est

60 (94)

6.1. Explain why you consider that the activity covered by this request is fully exposed to competition in the relevant product market on the relevant geographical market(s). In particular, give the following information:

(240) The applicant believes that express parcel services and standard parcel services should not be

segmented into separate markets, due to a strong overlap between market participants and

expectations by customers that players are present in both segments. In any case, the applicant

believes that the Commission can leave the final product market definition open, since the

services would be open to competition even if the markets for express parcel services and

standard parcel services are considered separately.

GENERAL CONDITIONS ON THE RELEVANT MARKET

6.1.1. Identify the five largest independent suppliers (21) to the applicant and their individual shares of the applicant's purchases (of raw materials or goods used to produce the relevant products). Provide the name, address, telephone number, fax number and appropriate contact person, of these suppliers.

(241) The applicant explains that the main supplies required by Eesti Post are related to the parcel

machine networks, in particular, the parcel machines themselves as well as IT and related items.

(242) The five largest suppliers of the applicant in relation to express parcel services are:

Number of

suppliers

Supply

sourced

from the

supplier

Share of

supplier from

the applicant´s

purchases (%)

Contact information

RESTAN

PARTNER OÜ

Courier

services

8% Address: Harju County, Saku parish,

Roobuka village, Soonurme tee 31,

75516

Phone: +372 5599 7092

Email: [email protected]

Internet address: N/A

RAIN

TRANSPORT

AS

Transport 7% Address: Tartu County, Tartu, Ravila

63b, 50411

Phone: +372 742 0805

Email: [email protected]

Internet address: https://rain.ee/

SHENZHEN

HIVE BOX

TECHNOLOGY

CO LTD

Parcel

machines

5% Address: 16F，Building2#, Yongxinhui,

Dongbin Road 4078, Shenzhen, China

Phone: +86 1382 7465 653

Email: [email protected]

Internet address:

http://www.fcbox.com/en/pc/index.html#/

SAKU AB AS Transport 4% Address: Harju County, Tallinn, Paneeli

2/1, 13816

Phone: +372 6052 370

Email: [email protected]

Internet address:

https://www.sakuab.ee/

61 (94)

GRETA

GRUPP OÜ

Courier

services

4% Address: Harju County, Tallinn, Saku tn

6a, 11314

Phone: N/A

Email: [email protected]

Internet address: N/A

ESTERIA.EE

OÜ

SMS

notifications

4% Address: Harju county, Tallinn, Peterburi

tee 71/1-2, 11415

Phone: +372 6300 682

Email: [email protected]

Internet address: https://www.esteria.eu

Please also identify the undertakings affiliated to the applicant and their individual shares of the applicant's purchases (of raw materials or goods used to produce the relevant products). Provide the name, address, telephone number, fax number and appropriate contact person, of these undertakings

(243) Eesti Post does not source any input from undertakings affiliated to Eesti Post.

STRUCTURE OF SUPPLY IN THE RELEVANT MARKETS

6.1.2. Describe the distribution channels and after-sales service networks that exist in the relevant markets. In doing so, take account of the following, where appropriate:

(244) The applicant explains sales are generally not dependent on particular distribution channels. In

particular, customers are able to order the services online or through the electronic interfaces

present at parcel machines.

(245) If the parcel originates from an online store, the postal service is added as an ancillary service to

the online store and the choice of postal service (e.g. courier or parcel machine) is taken by the

end customer of the online store through the website of the online store.

(246) With respect to the market participants, numerically, the majority of market participants do not

have parcel machine networks, however the main market players have either started their

investments into parcel machine networks or are on their way to doing so.

(a) the existing distribution systems and their importance in these markets. To what extent is distribution performed by third parties or by undertakings affiliated to the applicant?

(247) The applicant explains that in respect to courier networks, some market participants prefer to

outsource the final delivery while some market participants provide the service themselves. There

are also market participants (such as Eesti Post) who prefer a hybrid solution, outsourcing the

delivery in some narrower geographic locations, and providing the service itself in others.

(b) the existing after-sales service networks (for example, maintenance and repair) and their importance in these markets. To what extent are these services performed by third parties or by undertakings affiliated to the applicant?

(248) The applicant explains that after-sales services are generally provided through customer service

and is generally provided by the postal undertakings themselves. The importance of after-sales

services is however of limited importance and has relevance mostly if problems arise with the

delivery itself.

6.1.3. Where appropriate, provide an estimate of the total EU-wide and EFTA-wide capacity for the last three years. During this period, what was the capacity of the applicant and what was the rate of its capacity utilisation?

62 (94)

(249) The total EU-wide or EFTA-wide capacity for the last three years is not relevant for domestic

express parcel services.

6.1.4. Please indicate any other supply-side consideration you consider to be relevant.

(250) The applicant has no further considerations.

STRUCTURE OF DEMAND IN THE RELEVANT MARKETS

6.1.5. Identify the five largest independent customers of the applicant in the relevant market and their individual shares of total sales of the relevant products by the applicant. Provide the name, address, telephone number, fax number and appropriate contact person, of each of these customers.

(251) The applicant explains that on one hand there are a significant number of individual customers

i.e. private persons ordering services. However, there are also a few larger customers for Eesti

Post in Estonia. The largest customer makes up 7% of the revenue of Eesti Post in Estonia.

(252) The five largest clients of Eesti Post are the following:

Name of customer Share of total

sales of Eesti

Post (%)

Contact information

DLB/PIGU 7% Address: Harju County, Tallinn, Mustamäe

tee 46, 10621

Phone: +3726150026

Email: [email protected]

Internet address: https://kaup24.ee

WEEKEND EESTI OÜ 5% Address: Lääne-Viru County, Rakvere, Niine

tn 4a, 44313

Phone: +372 58508083

Email: [email protected]

Internet address: http://www.hansapost.ee

HOBBY HALL GROUP OÜ 2% Address: Harju County, Tallinn, Luite 19a,

11313

Phone: +372 611 5511

Email: [email protected]

Internet address: http://www.hansapost.ee

TELIA EESTI AS 2% Address: Harju County, Tallinn, Mustamäe

tee 3, 15033

Phone: +372 655 9188

Email: [email protected]

Internet address: https://www.telia.ee/

JOOST-LEVEL OÜ 1% Address: Harju County, Maardu, Kärmu 3,

74114

Phone: +372 503 4143

Email: [email protected]

Internet address: http://www.loverte.com

63 (94)

RADEMAR OÜ 1% Address: Harju County, Tallinn, Värvi tn 14,

10621

Phone: +372 651 2087

Email: [email protected]

Internet address: http://www.rademar.ee

6.1.6. Explain the structure of demand in terms of:

(a) the different phases of the markets, for example, take-off, expansion, maturity and decline, and a forecast of the growth rate of demand;

(253) The applicant believes that the market is expanding due to the global trend in favour of online

shopping. The growth of the market acts as an incentive for new competitors to enter the market,

providing new types of services. One example of such entry is by food delivery platforms, which

have diversified to also provide delivery of goods from online stores. In principle, such platform

can also be used for customer-to-customer transport, however due to increased costs as

compared to the services offered by postal companies, this is not yet widespread.

(254) As a result of innovation in particular in autonomous transportation, such alternative services to

traditional express parcel services could lead to significant competitive pressure in the long term.

In cities, such competitive pressure is already present (currently still at a relatively limited extend)

via a company called Starship76 in Estonia, which provides autonomous robots that partner with

stores and restaurants to offer local delivery services.

(b) the importance of customer preferences, in terms of brand loyalty, product differentiation and the provision of a full range of products;

(255) In terms of business segments within express parcel services, customer preference varies with

some preferring parcel machines over courier services and some preferring courier services over

parcel machines. In terms of brand loyalty, the applicant notes that brand loyalty is limited if

present at all on a general level. The only exception being perhaps one of the main competitors

of Eesti Post, i.e. SmartPosti Estonia (a subsidiary of the Finnish incumbent postal undertaking),

that seems to be the preferred postal service provider for customers with a Finnish connection.

(256) In terms of product differentiation and the provision of full range of products, all main competitors

on the market have parcel machine networks or have started investing in such networks.

(c) the degree of concentration or dispersion of demand;

(257) The applicant notes that the degree of dispersion of demand is high, due to the clients being

mostly private customers.

(d) the segmentation of customers into different groups with a description of the ‘typical customer’ of each group;

(258) The applicant explains that in general, costumers can be segmented into private customers and

businesses, however to the extent that it is aware, there are no appreciable differences on how

services are provided to those two customers groups.

76 See for further information https://www.starship.xyz/business/

64 (94)

(259) One notable exception is that business customers are able to send several parcels through a

single parcel machine box at a time, whereas private customers need to send the parcels one by

one. For clarity, while a typical business costumers is more likely to send several parcels at a

time, there are also private customers that do the same. Thus, the provision of service does not

differ between those two customers groups.

(e) the importance of exclusive distribution contracts and other types of long-term contracts;

(260) Exclusivity contracts are generally not present on the market, to the extent that the applicant is

aware.

(e) the extent to which contracting authorities, State undertakings or similar bodies are important as a source of demand.

(261) The applicant notes that State undertakings or similar bodies are generally not an important

source of demand.

6.1.7. Provide estimates of the degree of consumer activity in terms of switching supplier and renegotiating contracts in the last five years. Also give the sources used for this and, where available, the necessary documents to confirm the estimates.

(262) The applicant explains that the degree at which customers switch suppliers is very high, due to

general price sensitivity. Furthermore, most customers use several providers at any time, since

switching costs are minimal, if present at all.

65 (94)

6. Section 5C - Printing and packaging services

5. Section 5 — Information concerning the relevant market and access to that market

This section must be completed irrespective of the reply to point 4.1 above.

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

5.1. Please give the reasons why you consider that access to the relevant market is not restricted.

(263) The applicant notes that the market for printing and packaging in Estonia is divided between three

to four main market participants, with the largest one being Unified Post, with a market share

estimated at 55%. In contrast, the market share of Eesti Post, the only undertaking subject to

public procurement obligation, is estimated at 28,5%.

(264) Irrespective of the market share of the largest market participant, the market remains competitive

in part due to a relatively high customer concentration and countervailing buyer power, combined

with low switching costs for customers. As a result, the applicant estimates that within the last five

years, approximately 40-50% of the customers in terms of volume have changed suppliers

(around ~20% customers active in the market).

(265) Based on the above, the applicant considers that access to the relevant market for printing and

packaging services is not restricted.

5.2. For each relevant market, for each of the last three financial years (15), and for each of the following territories:

(a) the EEA territory;

(b) the EU as a whole;

(c) the territory of the EFTA States as a whole;

(d) each Member State and each EFTA State where the applicant carries out an activity; and

(e) the relevant geographical market (16), if the applicant considers that this market is different

Please provide the information referred to in points 5.2.1 to 5.2.9

5.2.1. an estimate of the total size of the market in terms of sales value (in Euro) and volume (units) (17), indicating the basis for the calculations and sources used and providing documents, where available, to confirm these calculations;

5.2.2. the sales in value and volume, as well as an estimate of the market share held by the applicant;

5.2.3. an estimate of the market share in value (and, where appropriate, volume) of all competitors (including importers) having at least 10 % of the geographical market under consideration. Provide documents, where available, to confirm the calculation of these market shares and provide the name, address, telephone number, fax number and appropriate contact person, of these competitors;

(266) The applicant explains that based on the earlier practise of the Commission, the market for

printing and packaging services is considered national in scope. Consequently, the size of the

market as defined by EEA territory or EU as a whole is not relevant for the assessment of direct

exposure to competition. Thus, the applicant requests the Commission to waive the requirement

stipulated under section 5.2 points (a) – (c) to provide data for the relevant market for each of the

last three financial years.

66 (94)

(267) In respect to section 5.2 points (d) – (e), the applicant notes the product market should be

considered national in scope and the services are not provided in any EFTA state.

(268) For ease of data interpretation, the applicant has provided information requested under points

5.2.1 - 5.2.3 in a single table.

(269) In relation to a segmentation by value and volume, the applicant notes that market data for volume

is not available, thus the market shares in terms of volume are the best estimates of the applicant

and may not reflect actual market shares. At the same time, Eesti Post states that its market share

in terms of volume closely aligns with its market share in terms of value. Due to the lack of more

specific volume-related market data, Eesti Post assumes a similar situation for its competitors.

Accordingly, Eesti Post makes the assumption that the distribution of market shares in terms of

volume among market participants follows a similar pattern.

(270) The applicant explains that data for the total marked in terms of value is based on the best

knowledge and the distribution of customers of Eesti Post.

(271) The market share of the applicant has been calculated based on the internal data of the applicant.

With regard to the data of its main competitors, the applicant notes that these are derived based

on the best understanding of the applicant and thus may not reflect actual market shares. The

applicant explains that providing volume-based market share allocations between Eesti Post and

its competitors proves unfeasible due to the divergent composition of sub-service segments within

the printing services of various undertakings. For example, some competitors sell the printing

service as a 'printing solution' package and integrate several different services (printing, wrapping,

printing, double-sided printing if necessary, etc.), while others sell it as a separate service.

Table 23 77

2020 2021 2022

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Eesti Post 350 000 29.2% 300 000 26.8% 333 000 28,9%

Unified Post AS

669 000 55.8% 645 000 57.7% 645 000 56%

Joon OÜ 120 000 10% 120 000 10.7% 120 000 10,4%

Captive provision of services

60 000 5% 53 000 4.7% 53 000 4,6%

Total 1 199 000 100% 1 118 000 100% 1 151 000 100%

(272) The applicant notes that the market is categorized by three main services providers, with the

largest one being Unified Post AS, followed by Eesti Post and thirdly Joon OÜ. The applicant

notes however that Eesti Post is subject to ever increasing competitive pressure arising from both

Unified Post AS and Joon OÜ, due to the inability to quickly adjust to market changes. The

77 In response to Question 18 of the Commission’s RFI dated October 24, 2024, the applicant explains that Eesti

Post’s market shares have not increased in 2023 as Eesti Post intends to exit the market. More specifically, as part

of Eesti Post’s long-term strategic plan, Eesti Post is planning to phase out our Printing service by the end of 2025

or early 2026. Due to this planned closure, Eesti Post does not foresee any significant investments in this area

moving forward.

67 (94)

applicant's ability to adapt is primarily hindered by the requirement to undergo a procurement

process, which consumes time for business development and organization, resulting in a slow

response to market fluctuations.

(273) In part, the applicant explains that printing and packing services are closely related to the

demands of customers wishing to bundle printing and packaging services together with solutions

sourced from third parties. In circumstances where Eesti Post is subject to public procurement

requirements, it is unable to quickly adjust to market developments and source the required input

to meet the demand of its customers. Consequently, the competitive pressure arising from Eesti

Post is lower than would be indicated by its market share. Nevertheless, in terms of market share,

Eesti Post remains well below the market leader. In that respect, providing an exemption to Eesti

Post from public procurement rules may increase the competitive pressure arising from it,

potentially allowing it to effectively compete with the largest services provider Unified Post AS.

Competitor Contact info

Unified Post AS Address; Harju County, Rae parish, Lehmja village, Taevavärava tee 1,

75306

Phone: +372 6 519 519

Email address: [email protected]

Internet address: https://www.unifiedpost.com/en/countries/estonia

Joon OÜ Address; Harju County, Rae parish, Lehmja village, Loomäe tee 13, 75306

Phone: +372 5628 8000 (Tiit Tippel, founder/partner)

Email address: [email protected]

Internet address: https://joon.eu/en/

5.2.4. an estimate of the total value, volume and source of imports from outside the EEA territory and identify:

(a) the share of such imports attributable to the applicant;

(b) an estimate of the extent to which any quotas, tariffs and non-tariff barriers to trade constitute barriers to these imports; and

(c) an estimate of the extent to which transportation and other costs affect these imports.

(274) The applicant explains that the provision of printing and packaging services for mailing items is

provided nationally and the applicant is not aware of any imports from outside the territory of the

EEA.

5.2.5. the extent to which trade between States within the territory of the EEA is hindered by:

(a) transportation and other costs; and

(b) other non-tariff barriers to trade;

(275) The applicant explains that trade between Member States within the territory of the EEA is not

significantly impacted by transportation and other costs or by non-tariff barriers to trade. However,

the applicant notes that services are nevertheless provided nationally.

5.2.6. the manner in which the applicant produces and sells the products or services; for example, whether they are manufactured locally, or are sold through local distribution networks;

(276) The applicant explains that Eesti Post provides printing services locally, using assets located in

Estonia. However, in Baltics, Eesti Post offers packing services.

(277) For clarity, however, to the extent that the applicant is aware, some competitors in particular

Unified Post (former Itella), provide the service on a pan-Baltic level, with the printing services

centralised in Latvia.

68 (94)

(278) In response to Question 19 of the European Commission’s RFI dated October 24, 2024, Unified

Post AS is wholly owned by the Latvian company Unifiedpost CEE SIA, both of which are part of

the international Unifiedpost Group, a public entity registered in Belgium with following

shareholders list78:

Name Number of Shares % of Voting Rights, reported in the

transparency notification

NN Group N.V. 5.760.783 15,51%

Alychlo 5.377.681 15,01%

Sofias BV (Hans Leybaert) 3.904.970 12,84%

PE Group N.V. 1.412.440 4,09%

Francisco Partners 1.082.862 2,92%

5.2.7. a comparison of the applicant’s and its competitors’ price levels in each Member State and EFTA State and a similar comparison of price levels between the EU, the EFTA States and other areas where these products are produced (for example, Eastern Europe, the United States of America, Japan, or any other relevant area);

(279) Some pricing differences exist due to the difference in business focus. Unified Post mainly offers

invoice printing and enveloping. This is not the case for Joon who offers this service to a very

small number of very small volume customers – for example, a customer with 10 invoices per

month. Joon OÜ is focused more on advertising addressing service (address label printing and

stamping).

5.2.8. the nature and extent of the vertical integration of the applicant compared with the largest competitors;

(280) The applicant explains that vertical integration is generally limited and services are provided

directly to customers.

(281) In some cases, however, the services are provided to an intermediary, who combines the printing

and packaging services with their own, with the resulting combination then provided to end

customers. In this manner the service is provided to sales invoice customers by Unified Post AS

and Finbite – the printing services is provided for the preparation of the physical channel, i.e. the

preparation for mailing.

5.2.9. information on the cost structure of the applicant (18). Also, specify any assets or infrastructure used jointly with other entities or used to carry out more than one activity covered by Directive 2014/25/EU. Where the use of such assets or infrastructures is subject to special conditions, such as universal service obligations or special rights, please specify.

78 https://investors.unifiedpostgroup.com/stock-information/shares-capital

69 (94)

(282) The applicant notes that the provision of printing and packaging services does not require any

specific infrastructure. Thus, the cost structure of Eesti Post is made up of software for customer

relationship management and financials.

(283) For printing and packaging, Eesti Post operates as follows: it prints mass invoices and

notifications on the basis of electronic information received from customers (electronic file with

address details of the recipient and the contents of the parcel). The machines print the contents

of the parcel and then the machines automatically envelope the parcel so that the recipient’s

information is visible in the envelope.

The applicant notes that the assets and infrastructure used for the provision of printing services

and packaging services is made up predominantly by:

(a) Sorting line and related equipment;

(b) Printing and packaging machinery;

(c) Commercial vans and truck;

(d) Domestic transport;

(e) Frontline workwear;

(f) Office;

(g) IT: Core system (infa, ERP, CRM, DWH).

5.3. Please provide the following information:

5.3.1. Over the last five years, has there been any significant entry to the geographical market(s) for the relevant products (19)? If the answer is ‘yes’, where possible provide the name, address, telephone number and fax number of the undertaking concerned, as well as the appropriate contact person, and an estimate of their current market share.

(284) The applicant is not aware of any significant entry over the last five years.

5.3.2. In the opinion of the applicant are there any undertakings (including those at present operating only in markets outside the EU or outside the EEA) that could enter the market? If the answer is ‘yes’, please explain why and identify such undertakings by name, address, telephone number, fax number and appropriate contact person, and give an estimate of the time within which such market entry is likely to occur.

(285) The applicant is not aware of any undertaking outside of the EU or EEA, which could easily enter

the market.

5.3.3. Describe the various factors influencing entry into the relevant markets in this case, from both a geographical and product viewpoint. In so doing, take account of the following, where appropriate:

(a) the total costs of entry (research and development, distribution systems necessary, promotions, advertising, after-sales service, etc.) on an equivalent scale to that of a significant viable competitor, indicating the market share of a such competitor;

(286) The applicant explains that total costs for full scale market entry can be up to EUR 150 000 –

200 000 for equipment and another EUR 200 000 – 250 000 for ancillary expenses, such as

marketing and administrative costs. Such a competitor would likely be able to quickly gain a

market share of around 25 – 30%. Furthermore, data from Estonian Statistical Office indicates

that there are currently 381 companies operating in the business segment of “printing and

reproduction of recorded media”, further highlighting that entry barriers are not particularly high.

This suggests that despite the initial investment, the market remains accessible to new players.

(287) For significant market entry, ensuring a market share of at least 10%, initial total investments in

the range of EUR 150 000 – 180 000 is sufficient. The main costs for market entry are the

necessary equipment required to provide services. In principle, market entry is also possible if

access to such equipment is sourced from third parties. For example, a printing partner may be

70 (94)

located outside the country where the service is provided. However, as a general rule, in such a

case the company will not have a time advantage over others and will consequently find it very

difficult to attract customers. It is, however, more likely to be able to enter the market competitively

if the equipment is owned by the company itself and is located in or very close to Estonia.

(b) any legal or regulatory barriers to entry, such as government authorisation or the existence of any standards;

(288) The provision of printing and packaging services are not subject to any regulatory barriers to

entry. In response to Question 3 of the European Commission’s RFI dated October 24, 2024,

environmental standards related to waste disposal and materials can add complexity and cost for

new entrants. For new entrants, compliance might initially be a cost burden, but it could also

represent a competitive advantage if they position themselves as environmentally friendly. These

standards do not influence the entry in a manner that would significantly complicate market entry.

(c) any restrictions created by the existence of patents, know-how and other intellectual property rights in these markets and any restrictions created by the licensing of such rights;

(289) The applicant explains that to the extent that it is aware, there are no restrictions related to the

existence of any patents, know-how and other intellectual property rights that might influence

entry into the relevant markets. Specialised knowledge in design and production might be of a

barrier for new entrants in principle, but Estonia’s relatively high level of technical education and

the availability of skilled labour mitigates this challenge.

(d) the extent to which the applicant is a licensee or licensor of patents, know-how and other rights in the relevant markets;

(290) The applicant notes that Eesti Post is not the licensee or licensee which would be critical for

market access. For clarity, Eesti Post is using conventional software for accounting and CRM

(customer relationship management software), which are reliant on a corresponding license,

however such licenses cannot be considered an appreciable barrier to entry and are freely

available.

(e) the importance of economies of scale for the production of products in the relevant markets;

(291) The applicant explains that the business models for providing printing and packaging services is

reliant on economies of scale for market entry. This is because the initial investment required for

the equipment used for printing and packaging. However, the applicant also notes that generally

volumes generated from relatively low turnovers (e.g. 10% market share) are sufficient to result

in sufficient economies of scale to operate the equipment at near capacity. Thus, the economies

of scale necessary for market and to become a viable competitor can be achieved at relatively

low volumes.

(292) Some further economies of scale can be gained via increased purchasing power for source

materials (such as paper etc.), however the applicant notes that these are generally not sufficient

to grant an appreciable economic advantage to a market participant.

(f) access to sources of supply, such as availability of raw materials.

(293) The applicant notes that in general, access to the sources of supply is freely available. However,

due to a recent shift in the global geopolitical situation, access to paper has become more difficult

due to volatility in pricing. That said, access to paper takes place on market basis and to the

extent that the applicant is aware, paper sold is not tied to long term agreements which would

restrict market entry.

RESEARCH AND DEVELOPMENT

71 (94)

5.3.4. Give an account of the importance of research and development in the ability of an undertaking operating in the relevant market(s) to compete in the long term. Explain the nature of the research and development carried out by the applicant in the relevant markets.

In so doing, take account of the following, where appropriate:

(a) trends and intensity of research and development (20) in these markets and for the applicant;

(b) technological developments in these markets over an appropriate time period (in particular developments in products and/or services, production processes, distribution systems, and so on);

(c) the major innovations that have been made in these markets and the undertakings responsible for these innovations;

(d) the cycle of innovation in these markets and where the parties are in this cycle of innovation.

(294) The main developments in terms of research and development takes place in part through

developments in the printers and packaging equipment used in combination with a more effective

use of such devises. This means that rather than labelling mailing items, the items themselves

can be directly printed on, thereby reducing cost.

(295) That said, the applicant believes that such developments are accessible for all market

participants, due to the developments happening at the level of the device manufacturers. Thus,

the importance of research and development at the level of the services providers of printing and

packaging services is minor, if present at all.

(296) In terms of the cycle of innovation, the applicant believes that the innovation in terms of product

and services provided is low, with the main innovation being bundling printing and packaging

services together with other cloud-based services. In Estonia, Unified Post AS is a good example

of such a service provider.

COOPERATION AGREEMENTS

5.3.5. To what extent do cooperation agreements (horizontal or vertical) exist in the relevant markets?

5.3.6. Give details of the most important cooperation agreements concluded by the applicant in the relevant markets, such as research and development, licensing, joint production, specialisation, distribution, long term supply and exchange of information agreements.

(297) The applicant notes that to the extent that it is aware, cooperation agreements (either horizontal

or vertical) are limited if present at all.

(298) Services provided under the printing and packaging market for mailing items can relatively easily

be bundled with ancillary services, such as mailing or cloud services leading to synergistic effects.

However, currently the applicant notes that the demand of customers varies sufficiently.

Furthermore, market participants have not deemed it necessary to enter into cooperation

agreements which could result in a barrier to entry. Thus, their effect on competition is limited if

present at all.

6. Section 6 — Exposure to competition

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

According to Article 34(2) of Directive 2014/25/EU, the question of whether an activity is directly exposed to competition must be decided on the basis of criteria that are in conformity with provisions on competition of the TFEU, such as the characteristics of the goods or services concerned, the existence

72 (94)

of alternative goods or services, the prices, and the actual or potential presence of more than one supplier of the goods or services in question.

6.1. Explain why you consider that the activity covered by this request is fully exposed to competition in the relevant product market on the relevant geographical market(s). In particular, give the following information:

GENERAL CONDITIONS ON THE RELEVANT MARKET

6.1.1. Identify the five largest independent suppliers (21) to the applicant and their individual shares of the applicant's purchases (of raw materials or goods used to produce the relevant products). Provide the name, address, telephone number, fax number and appropriate contact person, of these suppliers.

(299) The main suppliers of Eesti Post are undertakings active in the sale and maintenance of

equipment required for printing and packaging, as well as sellers of paper and other items

required as input for the applicant.

(300) The five largest independent suppliers for the applicant are as follows:

Name of supplier Supply sourced

from the supplier

Share of

supplier from the

applicant’s

purchases (%)

Contact information

Bong Suomi OY Envelopes 6%

Address: Niittyvillankuja 3, 01510

Vantaa, Finland

Phone: +358 9 5657910

Email address: N/A

Internet address:

https://www.bong.fi/

OFFICEDAY

ESTONIA OÜ Paper 11%

Address: Harju maakond, Rae

vald, Rae küla, Graniidi tee 1,

75310

Phone: +372 6580900

Email address:

[email protected]

Internet address:

https://www.officeday.ee/

AKTAPRINT OÜ Printing products 14%

Address:

Harju maakond, Tallinn, Nõmme

linnaosa, Kukermiidi tn 10, 11216

Phone: +372 650 7550

Email address:

[email protected]

Internet address:

https://www.aktaprint.ee/

OÜ LAKRITO Printing products 19%

Address: Harju maakond, Tallinn,

Lasnamäe linnaosa,

Osmussaare tn 14, 13812

Phone: +372 621 1881

Email address: [email protected]

Internet address:

https://lakrito.ee/en/

73 (94)

ABCOM

TEENINDUSE OÜ

Maintenance

services 19%

Address: Harju maakond, Tallinn,

Mustamäe linnaosa, Laki tn 30,

12915

Phone: 655 6665

Email address:

[email protected]

Internet address:

https://www.abcom.ee/

PRINTALL AS Printing products 11%

Address: Harju maakond, Tallinn,

Tala 4, 11415

Phone 669 8400

Email address:

[email protected]

Internet address:

https://www.printall.ee/ee/esileht/

WZ

EUROCOPERT

Sp. Z o.o Envelopes 13%

Address: ul. Koszalińska 93 78-400 Szczecinek, Poland

Phone: +48 94 372 48 11

Email address:

[email protected]

Internet address:

https://wzeurocopert.pl/en/

Please also identify the undertakings affiliated to the applicant and their individual shares of the applicant's purchases (of raw materials or goods used to produce the relevant products). Provide the name, address, telephone number, fax number and appropriate contact person, of these undertakings.

(301) The applicant explains that Eesti Post does not obtain any supplies from any undertakings

affiliated with the applicant.

STRUCTURE OF SUPPLY IN THE RELEVANT MARKETS

6.1.2. Describe the distribution channels and after-sales service networks that exist in the relevant markets. In doing so, take account of the following, where appropriate:

(302) The applicant explains that printing and packaging services are provided to the customers either

directly (e.g. through long term agreements) or through intermediaries, who bundle the services

together with other ancillary services. E.g. the end use may wish to outsource its entire invoicing

procedure, covering both e-invoicing as well as paper invoicing. In such cases an intermediary

may bundle its e-invoicing services together with the service provider of printing and packaging

services.

(a) the existing distribution systems and their importance in these markets. To what extent is distribution performed by third parties or by undertakings affiliated to the applicant?

(303) The applicant explains that distribution systems are generally not important for the provision of

printing and packaging services. In particular, services are generally provided based on individual

agreements entered into directly by the service provider and the customers requiring service.

(304) To some extent, marketing is also provided by a third party acting as an intermediary, who bundles

printing and packaging services together with its own offering. In case of Eesti Post, 4% of printing

services are provided to customers through a subsidiary of Eesti Post (Finbite OÜ79)

79 Finbite OÜ is a provider of e-invoices and digitization services. More info is available here: https://finbite.eu/en/

74 (94)

(b) the existing after-sales service networks (for example, maintenance and repair) and their importance in these markets. To what extent are these services performed by third parties or by undertakings affiliated to the applicant?

(305) The applicant notes that printing and packaging services generally do not require any after sales

services, thus the existence of such services are not important to the competitive environment on

the market.

6.1.3. Where appropriate, provide an estimate of the total EU-wide and EFTA-wide capacity for the last three years. During this period, what was the capacity of the applicant and what was the rate of its capacity utilisation?

(306) To the extent that the applicant is aware, there is sufficient capacity both at a national, regional

(Estonia, Latvia, Lithuania) and EU, as well as EFTA level. Thus, the applicant notes that capacity

concerns do not impact the provision of services in general.

6.1.4. Please indicate any other supply-side considerations you consider to be relevant.

(307) The applicant does not have any further supply side considerations to note.

STRUCTURE OF DEMAND IN THE RELEVANT MARKETS

6.1.5. Identify the five largest independent customers of the applicant in the relevant market and their individual shares of total sales of the relevant products by the applicant. Provide the name, address, telephone number, fax number and appropriate contact person, of each of these customers.

(308) The applicant explains that the five largest independent customers of the applicant are

undertakings that need to mail large amounts of items, such as invoices, advertising materials

etc.

(309) The five largest customers of Eesti Post are as follows:

Name of customer Share of total sales of

Eesti Post (%)

Contact information

AS STV 4% Address: Harju maakond,

Tallinn, Lasnamäe

linnaosa, Valge tn 6-4,

11413

Phone: 688 0000

Email address:

[email protected]

Internet address:

https://stv.ee/

Elisa Eesti AS 10% Address: Harju maakond,

Tallinn, Kristiine linnaosa,

Sõpruse pst 145, 13425

Phone: +372 6811963

Email address:

[email protected]

Internet address:

https://www.elisa.ee/en

Kaubamaja AS 2% Address: Harju maakond,

Tallinn, Kesklinna linnaosa,

Gonsiori tn 2, 10143

Phone: +372 6673100

Email address:

75 (94)

[email protected]

Internet address:

https://www.kaubamaja.ee/

Tervise Arengu

Instituut

8%

Address: Harju maakond,

Tallinn, Nõmme linnaosa,

Hiiu tn 42, 11619

Phone: +372 6593900

Email address: [email protected]

Internet address:

https://tai.ee/en

Finbite OÜ 4% Address: Harju maakond,

Tallinn, Lasnamäe

linnaosa, Peterburi tee 2f,

11415

Phone: +372 6643121

Email address:

[email protected]

Internet address:

https://finbite.eu/en/

(310) The applicant notes that the largest customers generally make up a relatively large part of the

total sales of Eesti Post. This in turn gives the customers large bargaining power in relation to the

services providers.

(311) AS STV and Elisa Eesti AS are undertakings active in the telecommunications sector with large

client pools, which in turn translates into a need for large number of invoices.

(312) Kaubamaja AS is an undertaking active in the retail sector, operating both stores selling various

goods (such as clothing etc) as well as running a shopping mall.

(313) Tervise Arengu Instituut is a public entity active in research and development, collecting,

connecting and providing national information related to the health of the Estonian population.

6.1.6. Explain the structure of demand in terms of:

(a) the different phases of the markets, for example, take-off, expansion, maturity and decline, and a forecast of the growth rate of demand;

(314) The applicant explains that the market can be considered mature if not at a decline. The overall

demand for printing and packaging services is likely to remain, however the market has shown a

decline for the past three years.

(b) the importance of customer preferences, in terms of brand loyalty, product differentiation and the provision of a full range of products;

(315) Based on the assessment of the applicant, the market for printing and packaging is shifting due

to changes in customer preferences. In particular, the main demand for printing and packaging

services arises from customers wishing to print out mainly invoices or advertising materials.

(316) These materials can then either be mailed to end customers or used by the customers

themselves.

(317) The demand of customers is shifting towards a one stop approach, where all services required

can be obtained from one service provider. This results in printing and packing services often

76 (94)

being combined with other services offered by third parties. However, due to a relatively wide

selection of services with which printing, and packaging can be combined with, there is limited

incentive to provide all such services inhouse, printing and packaging services have remained

and will likely remain as a stand-alone service.

(318) In terms of product differentiation, the applicant notes that the core service offered by all

competitors is the same – i.e. printing, labelling stamping, packaging.

(319) In terms of brand loyalty, the applicant notes that to the extent that it is aware, brand loyalty does

not impact the choices of customers.

(c) the degree of concentration or dispersion of demand;

(320) The applicant notes that the degree of concentration of demand is relatively high, with the main

customers making up a significant part of the sale of both Eesti Post and to the extent that Eesti

Post is aware, the case is the same for the competitors of Eesti Post.

(d) segmentation of customers into different groups with a description of the ‘typical customer’ of each group;

(321) Customers can in principle be segmented into customers purchasing printing and packaging

services for invoices and customers, which require the services for materials used for advertising.

For clarity, these customers are not mutually exclusive – i.e. a customer interested in purchasing

services for invoices may also be interested in services for advertising.

(322) A customer interested in invoicing generally wishes to purchase invoice services as a package,

regardless of whether the invoice is sent on paper or digitally. Thus, the printing and packaging

services are often combined with cloud-based solutions where customers who wish to have a

third party take care of sending out all invoices.

(323) A customer wishing to have materials for advertising generally purchases printing services for

magazines, which are then labelled for mailing.

(e) the importance of exclusive distribution contracts and other types of long-term contracts;

(324) Exclusive distribution is not relevant for providing printing and packaging services. The applicant

further notes that to the extent that it is aware, long-term contracts are not widespread, due to

large bargaining power of customers being able to choose their service providers.

(f) the extent to which contracting authorities, State undertakings or similar bodies are important as a source of demand.

(325) The importance of State undertakings as source of demand varies based on the activities of

the public sector from year to year. However, public undertakings do make up around 25-35%

of the market in general.

6.1.7. Provide estimates of the degree of consumer activity in terms of switching supplier and renegotiating contracts in the last five years. Also give the sources used for this and, where available, the necessary documents to confirm the estimates.

(326) The applicant notes that to the extent that it is aware, the market is active, and customers change

suppliers often due to very low switching costs. In the last five years, around 20% of customers

have changes suppliers, making up around 40-50% in terms of volume.

77 (94)

7. Section 5D - Third- and fourth-party logistics services (international business)

5. Section 5 — Information concerning the relevant market and access to that market

This section must be completed irrespective of the reply to point 4.1 above.

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

5.1. Please give the reasons why you consider that access to the relevant market is not restricted.

(327) As a starting point, the applicant notes that in respect to this exemption request, the majority of

the goods and services sourced by Eesti Post in the context of third- and fourth party services are

not subject to public procurement rules, due to the exemption stipulated under Article 7 (d) of

Directive 2014/24/EU – i.e. exemption in respect to logistics services (services combining physical

delivery and/or warehousing with other non-postal functions). Thus, the applicant notes that

where Eesti Post provides logistics services in combination with other non-postal functions, the

market access should already be considered not restricted.

(328) Since the goods and services sourced by the Eesti Post in the provision of logistics services are

subject to Directive 2014/25/EU only insofar that Eesti Post is providing the services under this

product market in conjunction with postal services falling within Directive 2014/25/EU, which

makes up a marginal share of the services provided by Eesti Post (estimated to be less than

10%), market access to the relevant market should be considered not restricted in its entirety.

That said, while postal functions can arguably be at time considered marginal, the share of postal

to non-postal functions changes over time, given the unpredictable nature of postal logistics in

recent years due to both the COVID-19 pandemic and the war in Ukraine. Consequently, the

applicant prefers to include logistics services in the request as the activity is clearly directly

exposed to competition – Eesti Post is a marginal player in this segment.

(329) Further, the applicant explains that regardless of the product market definition, Eesti Post’s market

share on the market for third- and fourth-party logistics in Europe remains under 1% (market share

for parcels to particular countries may be up to 3-6% for a particular country). Based on the

previous practise of the Commission, market shares of less than 1% can be taken as an indication

that access to the relevant market is not restricted.80

5.2. For each relevant market, for each of the last three financial years (15), and for each of the following territories:

(a) the EEA territory;

(b) the EU as a whole;

(c) the territory of the EFTA States as a whole;

(d) each Member State and each EFTA State where the applicant carries out an activity; and

(e) the relevant geographical market (16), if the applicant considers that this market is different

80 Commission Decision of 6 August 2007, exempting certain services in the postal sector in Finland, excluding the

Åland Islands, from the application of Directive 2004/17/EC of the European Parliament and of the Council

coordinating the procurement procedures of entities operating in the water, energy, transport and postal services

sectors (notified under document number C(2007) 3700), recital 21.

78 (94)

Please provide the information referred to in points 5.2.1 to 5.2.9

5.2.1. an estimate of the total size of the market in terms of sales value (in Euro) and volume (units) (17), indicating the basis for the calculations and sources used and providing documents, where available, to confirm these calculations;

5.2.2. the sales in value and volume, as well as an estimate of the market share held by the applicant;

5.2.3. an estimate of the market share in value (and, where appropriate, volume) of all competitors (including importers) having at least 10 % of the geographical market under consideration. Provide documents, where available, to confirm the calculation of these market shares and provide the name, address, telephone number, fax number and appropriate contact person, of these competitors;

(330) The applicant explains that total market data for the years 2017-2020 is available from a market

report prepared by Effigy Consulting in November 2021 (Annex I). The market report outlines data

based on the total market by both value (EUR) and volume (parcels) for Europe as a whole, as

well as on a per country basis.81 That said, clear market data is available only for the year of 2020.

Due the marginal market share of Eesti Post, the applicant requests the Commission to waive the

requirement to provide market shares for both 2019, 2021. In any case, the applicant notes that

the market share of Eesti Post has remained marginal for those years and the applicant has

provided the market shares for Eesti Post on a per country basis (where the market shares of

Eesti Post are the highest) for the years 2019 and 2021 to the best of its ability.

(331) In terms of competitors market shares, the applicant notes that the competitor data is available

from the Effigy Consulting market report for all of Europe, it is not available on a per country basis.

However, since the market share of Eesti Post is marginal irrespective of the market definition,

the applicant requests the Commission to waive the obligation to provide market shares for

competitors of Eesti Post on all plausible market definitions.

(332) In relation to competitor data, the applicant notes that based on its understanding, the market is

highly segmented and in general only a few competitors of Eesti Post can be considered to have

a market share of over 10% on a plausible market covering all over Europe (in particular DHL and

DPD). Further, in addition to the competitors listed below, undertakings similar to Eesti Post, e.g.

the Belgian, Latvia, German incumbent postal undertakings are also active on the market,

however there is limited or no market data for such undertakings. Since the market share of Eesti

Post is marginal irrespective if such undertakings are included or not, the applicant has currently

excluded them from the market.

(333) Further, while the applicant notes that to the extent that it is aware, while the data provided by the

Effigy Consulting market report does not completely align with the product market definition, the

applicant believes that the data is sufficient to note that the market presence of Eesti Post is

marginal, and that market access is not restricted.

(334) In particular, the market report by Effigy Consulting (Annex I) provides an overview of the

European Courier Express and Parcel services market covering the EU 28 (including UK,

excluding Malta and Cyprus and with Belgium and Luxembourg being merged into BeLux), in

addition to Iceland, Norway, Russia, Serbia, Switzerland and Ukraine. The services provided

include domestic, international intra EU and international extra EU, focusing on import and export

flows. As such, the market report covers over 200 carriers and 31 countries.82 To the extent that

the applicant is aware, the market report does not include international intra EU and international

81 Effigy Consulting Market Overview 2020 „European Courier Express and Parcel 2021 CEP Market Summary on

2017 – 2020 Data including 2021 – 2021 Forecast, page 59. 82 Annex I, pages 6-7

79 (94)

extra EU import and export through the Universal Postal Union network (in essence a union of

Postal operators), thus the market may be in fact larger than displayed by the report and as a

result, the market share of the applicant may be even smaller.

(335) The applicant notes that currently almost all, if not all of the revenue of Eesti Post originates from

outside of the EEA, in particular from China. Thus, the market share estimates of the applicant

are not tied to actual revenue generated from Member States, rather they are the costs of the

applicant arising from the sourcing services of from third parties responsible for the final delivery

in those third countries. Those costs in turn result in the revenue of undertakings active in those

member states organising the final delivery. Since the Effigy Consulting market report (Annex I)

outlines revenues of Courier Express and Parcel services in those countries, the applicant

believes that the costs of the applicant in those countries are the best proxy for its market position.

(336) As such, the applicant has provided the market share of Eesti Post for Member States for which

it organises the final delivery as well as market shares for an overall pan-European market. For

clarity, the applicant has currently not provided market shares of the main competitors of Eesti

Post national basis, however since the market share of the applicant is marginal on those markets,

it is of the opinion that market data is sufficient to show that access to the relevant market is not

restricted.

(337) For clarity, the applicant has also not included the national market share of Eesti Post for Belarus,

Moldova, Kazakhstan, Kyrgyzstan and Georgia. In respect to the last three countries, Eesti Post

is on its way to enter the market and has not yet generated any revenue or incurred any costs in

relation to those markets.

(338) For ease of data interpretation, the applicant has provided information requested under points

5.2.1 – 5.2.3 in a single table, segmenting the information based on value and volume. The

applicant further explains that the following figures in Table 24 do not reflect the value of logistics

services, but the assumed following market shares in the logistics services market have been

derived from total turnover of Eesti Post and its competitors.

Table 24

Logistics services in Europe (value)

2020

Value (MEUR) Market share (%)

Eesti Post 92 0,12%

DHL Parcel+ DHL Express 14476 19,36%

DPD group 9707 12,98%

Royal Mail + Parcelforce 5672 7,59%

FedEx TnT 5304 7,09%

Other 39523 52,86%

Total 74774 100,00%

*Source: Annex I, page 63

Table 25

Logistics services in Europe (volume) 2020

80 (94)

Volume (million units) Market share (%)

Eesti Post 25 0,16%

DHL Parcel+ DHL Express 2421 15,85%

DPD group 1847 12,09%

Royal Mail + Parcelforce 1686 11,04%

FedEx TnT 346 2,27%

Other 8948 58,59%

Total 15273 100,00%

*Source: Annex I, page 61

Table 26

Market share of Eesti Post per country basis (value)

2019 2020 2021

Value (MEUR)

Total market value (MEUR)

Market share (%)

Value (MEUR)

Total market value (MEUR)

Market share (%)

Value (MEUR)

Total market value (MEUR)**

Market share (%)

Estonia (Omniva EE)

0,8 113,8 1% 1,4 139,0 1% 2,1 156,2 1%

Latvia (Omniva LV)

0,5 91,8 1% 0,8 95,0 1% 0,9 106,8 1%

Lithuania (Omniva LT UAB)

0,7 120,4 1% 1,5 155,0 1% 3,5 174,2 2%

Finland (Matkahuolto)

0,0 599,1 0% 0,0 653,0 0% 1,2 734,0 0%

Ukraine (Ukrpochta, Meest International)

6,5 975,2 1% 5,7 1220,0 0% 5,6 1371,3 0%

Czech Republic (Meest International)

0,9 643,7 0% 1,9 793 0% 0 891,3 0%

Table 27

Market share of Eesti Post per country basis (volume)

2019 2020 2021

Volume (millions units)

Total market volume (millions units)

Market share (%)

Volume (millions units)

Total market volume (millions units)

Market share (%)

Volume (millions units)

Total market volume (millions units) ***

Market share (%)

Estonia 0,3 24,9 1% 0,6 32,0 2% 1,2 36,0 3%

Latvia 0,4 16,3 3% 0,5 16,0 3% 0,7 18,0 4%

(347)

81 (94)

Lithuania 0,6 25,7 3% 1,1 34,0 3% 2,3 38,2 6%

Finland 0,0 86,0 0% 0,0 100,0 0% 0,5 112,4 0%

Ukraine 12,0 250,6 5% 8,4 309,0 3% 5,7 347,3 2%

Czech Republic

0,4 162,3 0% 0,8 206,0 0% 0,0 231,5 0%

* Estimated

** Projection, based on Effigy Consulting report

(339) The applicant explains in terms of competitors in the above countries, i.e. Estonia, Latvia,

Lithuania, Finland and the Czech Republic as well as Ukraine, the applicant notes that all of the

main competitors to the applicant are the same undertakings as are active on the EU level – i.e.

DHL, DPD, FedEx etc.

(340) Based on the Effigy Consulting market report, the national level competitors are as follows (it is

likely however that there are further competitors, that the report does not individually display):

(341) Estonia: DHL Express, DPD, FexEx/TNT, SmartPosti, Jet Express, Venipak, OSC, UPS;

(342) Finland: Posti, PostNord, Bring, Budbee, DHL Express, FedEx, GLS, TNT, Jet Pack, Schenker,

UPS;

(343) Lithuania: Lithuanian Post, SmartPosti, Nege, Venipak, DPD, DHL Express, FedEx, TNT, UPS;

(344) Check Republic: Czech Post, DHL, DPD, TNT, GLS, FedEx, Toptrans, UPS, Wedo, Zasilkovne;

(345) Ukraine: (Ukrposhta), Nova Poshta, Nochnoy Express, DHL Express, CAT, FedEx/TNT, UPS

(346) In summary, the applicant notes that it does not have any appreciable market share on any of

the markets it is active on. Thus, it should be treated as a market player, who’s volumes depend

on the specific competitive situation on the market. In any case, the applicant notes that the

market is highly competitive and the ability of Eesti Post to effectively compete on the market

and increase its market share (e.g. from 3% to 6% in Lithuania between 2020 and 2021), is a

strong indication that access to the relevant market, regardless of market definition, is not

restricted.

Competitor Contact info

DHL Parcel+

DHL Express

Address; Harju County, Rae parish, Lehmja village, Taevavärava tee 1,

75306

Phone: +372 6808555

Email address: [email protected]

Internet address: https://dhlexpressestonia.ee/en

DPD Group

Address; Harju County, Rae parish, Lehmja village, Loomäe tee 13, 75306

Phone: +372 613 0012

Email address: [email protected]

Internet address: https://www.dpd.com/ee/en/

Royal Mail +

Parcelforce

Royal mail:

Address: 185 Farringdon Road LONDON EC1A 1AA

Phone: +44 345 600 0606

Email: [email protected]

Internet: https://www.royalmail.com/

Parcelforce:

Address: Lytham House, 25 Caldecotte Lake Dr, Caldecotte, Milton

Keynes, MK78LE, UK

82 (94)

Phone:01908687000

Email: [email protected]

Internet: https://www.parcelforce.com/

Internet address: https://www.royalmail.com/

https://www.parcelforce.com

FedEx TnT

Address; Harju County, Tallinn, Nõmme, Liivalao tn 11, 11216

Phone: +372 627 1900

Email address: [email protected]

Internet address: https://www.tnt.com/express/et_ee/site/home.html

5.2.4. an estimate of the total value, volume and source of imports from outside the EEA territory and identify:

(a) the share of such imports attributable to the applicant;

(b) an estimate of the extent to which any quotas, tariffs and non-tariff barriers to trade constitute barriers to these imports; and

(c) an estimate of the extent to which transportation and other costs affect these imports.

(348) The applicant explains that Eesti Post provides services for goods that have already been

transported into the EEA. Since such services require local hubs within the EEA, the closest

competitors to Eesti Post all possess such hubs within the EEA, thereby limiting the cross border

“import” of such services into the EEA. That said, such hubs can be rented by undertakings active

outside of the EEA, thus Eesti Post may compete also with undertakings active outside of the

EEA.

(349) Furthermore, Eesti Post focuses on providing services primarily for goods with their final

destination in Eastern Europe, including countries outside of the EEA – such as Ukraine – as well

as countries in the central Asia, such as Kazakhstan, Kyrgyzstan and Georgia (Eesti Post has not

yet entered those markets in any appreciable scale). The main entry points for imports deriving

from Aliexpress/Alibaba are located in Budapest, Liege and Amsterdam. At the same time, the

applicant mainly receives its import volumes in Riga. From Riga, the import volumes are

transported to Kaunas (Lithuania) for sorting. From Kaunas, volumes are transported mainly by

land transport to destination countries – Lithuania, Latvia, Estonia, Finland, Ukraine, Belarus,

Moldova, Kazakhstan, Kyrgyzstan and Georgia (trade to countries outside the EEA has however

significantly decreased since February 2022, due to a change in the geopolitical situation in

Europe).

(350) The applicant does not consider there to be any major obstacles why such provision of services

could not also work the other way around – i.e. by undertakings based outside the EEA, providing

their services within the EEA. Undertakings located outside the EEA base their decision to enter

the EEA market on whether they are able to offer delivery solutions and speeds that meet / do

not meet the needs and interests of the end customer. Most service providers cover EEA

countries as well as destination countries located outside EEA. Clients choose their partners

based on delivery speed, quality and last mile solutions offered.

(351) The applicant notes that due to the low market presence of Eesti Post, the import of services (if

present) does not have an appreciable effect on whether or not the applicant is open to

competition in the provision of third- and fourth party services.

5.2.5. the extent to which trade between States within the territory of the EEA is hindered by:

(a) transportation and other costs; and

(b) other non-tariff barriers to trade;

83 (94)

(352) The applicant explains that the provision of third- and fourth party logistics services is inherently

cross border within the EEA, thus trade between States within the territory of the EEA is generally

not hindered by transportation and other costs or other non-tariff barriers to trade.

(353) In relation to transportation costs, since the services provided are heavily reliant on transport,

transportation distance is a factor, transport between States further away from the point of origin

does impact trade. The applicant however does not consider such impact to be appreciable, since

at their core, the trade flows serviced by Eesti Post and its closest competitors originate from

China, meaning that the geographic location of a Member State to China outweighs the

transportation costs between Member States.

(354) By way of example, Eesti Post currently provides logistics services for parcels originating from

China and heading to Kazakhstan. This is because (and under the assumption that air traffic over

Russia is allowed at least for Chinese planes) the Baltics, along with Scandinavia are at an

advantage due to their closer distance to China compared to the rest of the EEA. However, if air

traffic closes, it becomes cheaper to transport parcels from China heading to Kazakhstan through

Germany or France, providing an advantage to those countries.

(355) In summary, barriers to trade between States are very limited and do not have an appreciable

impact on competition on the market.

5.2.6. the manner in which the applicant produces and sells the products or services; for example, whether they are manufactured locally, or are sold through local distribution networks;

(356) The applicant explains that Eesti Post provides services exclusively to businesses, with a focus

on large Chinese retailers, such as Alibaba and AliExpress. Both of the aforementioned retailers

have online platforms, where bids are submitted by third- and forth logistics services providers.

In essence the bids contain the unit price for services in a particular currency chosen by the

service provider. The systems of the retailers subsequently automatically pick out the most

suitable service provider based on its needs and price, including the currency exchange rates for

that particular day.

(357) In case Eesti Post is selected as the undertaking that is to provide the service, the parcels are

delivered to an airport determined by the customer (e.g. Alibaba or AliExpress). Eesti Post will

pick up the parcels, deliver them to a sorting centre based on destination countries and products.

Subsequently the parcels are sent to their destination countries with the required customs

declarations (if needed).

5.2.7. a comparison of the applicant's and its competitors' price levels in each Member State and EFTA State and a similar comparison of price levels between the EU, the EFTA States and other areas where these products are produced (for example, Eastern Europe, the United States of America, Japan, or any other relevant area);

(358) The applicant explains that based on its understanding of the market, the price levels offered by

Eesti Post and its competitors are very similar and depend on where the parcel is destined, units

shipped and other factors such as currency exchange rates for that particular day.

(359) The applicant notes that in practise, pricing must remain competitive, since switching costs

between suppliers with active contracts are marginal if present at all.

(360) In practice, the prices can be changed in quick manner and the market is therefore more open to

competition. Eesti Post’s major customers usually allow changing the full price list of the provided

service twice a year. However, the major customers also accept making occasional solitary price

changes. Eesti Post’s main customers monitor the price and quality per service offered on daily

bases. If the price or quality offered by Eesti Post is not satisfactory for Eesti Post’s customer, the

84 (94)

customer can easily switch to an alternative supplier any moment as there are plenty of market

players in the market.

5.2.8. the nature and extent of the vertical integration of the applicant compared with the largest competitors;

(361) In terms of vertical integration, the applicant explains that the customer is generally provided a

service that starts with a pickup at a European transport hub and ends with delivery of the parcel

to the final customers. Thus, there is no traditional vertical integration – e.g. a split between

wholesale and retail. The service providers are in essence integrators that combine several

difference services and provide them as a package to the end customer. Accordingly, some

undertakings are active in all of the services provided, rather than just acting as just integrators.

(362) The applicant notes however that in general, the importance of vertical integration (at least at low

market shares) is limited and does not result in any significant competitive advantage. The

applicant notes that third- and fourth party logistics services exist as a separate service, since, at

least to the extent that the applicant is aware, it is not economical for a single retailer, to also

provide its own logistics services across all of its target markets. That said, there are some major

international players (DHL, DPD, UPS) with sufficient scale to provide the services through

vertical integration.

(363) As such, e.g. Eesti Post as well as its other competitors are able to service several retailers

focusing on parcels heading towards particular areas – i.e. Eastern Europe in case of Eesti Post.

Being vertically integrated also limits the flexibility in case of sudden distributions in logistics. In

summary, the applicant notes that vertical integration is limited.

5.2.9. information on the cost structure of the applicant (18). Also, specify any assets or infrastructure used jointly with other entities or used to carry out more than one activity covered by Directive 2014/25/EU. Where the use of such assets or infrastructures is subject to special conditions, such as universal service obligations or special rights, please specify.

(364) Eesti Post incurs the largest expenses for the rent, management, development and maintenance

of the IT system. Other cost items already form a marginal part of Eesti Post's cost structure, i.e.

labour costs. It is also necessary to buy in mailbags and seals to provide the service.

The applicant notes that the assets and infrastructure used for the provision of third- and fourth-

party logistics services (international business) is made up predominantly by:

(a) International transport;

(b) Office;

(c) IT: Core system (infa, ERP, CRM, DWH);,

(d) IT: international business.

(365) Almost all of the infrastructure used for the provision of third- and fourth party logistics services is

used exclusively for such services. There is however some overlap between third- and fourth-

party logistics and services offered for international parcel services (an activity covered by

Directive 2014/25/EU)

(366) The business plan of Eesti Post foresees the outsourcing of as many services as possible, with

the result that it does not itself own any key assets to provide services. More specifically, Eesti

Post outsources sorting centre services in Kaunas. All transportation is outsourced from either its

other group undertakings in the Baltics or from third-party services providers.

(367) In connection with assets that support the implementation of Eesti Post’s business operations,

Eesti Post only owns some office equipment, as well as scales and other consumables to support

the secure and compliant forwarding of parcels to their destinations.

85 (94)

(368) With regard to a comparison between the cost structure and the resulting efficiency of Eesti Post

and its closest competitors, the applicant notes that there are competitors who operate with similar

setup compared to Eesti Post (i.e. outsourcing or renting all the assets for conducting its business

activity) and there are competitors who prefer to directly invest in the assets necessary to conduct

their business (i.e. trucks, buildings/warehouses, sorting lines etc). There also exist competitors

who use both versions of models simultaneously (i.e. renting/outsourcing and investing into

equipment). The general trend proves to be that market players that have more logistics, including

final delivery, partners tend to be more effective both in the sense of speed and cost as these

competitors have more alternatives to rely on.

5.3. Please provide the following information:

5.3.1. Over the last five years, has there been any significant entry to the geographical market(s) for the relevant products (19)? If the answer is ‘yes’, where possible provide the name, address, telephone number and fax number of the undertaking concerned, as well as the appropriate contact person, and an estimate of their current market share.

(369) The applicant is not aware of any significant entry to the geographical market over the last five

years.

5.3.2. In the opinion of the applicant are there any undertakings (including those at present operating only in markets outside the EU or outside the EEA) that could enter the market? If the answer is ‘yes’, please explain why and identify such undertakings by name, address, telephone number, fax number and appropriate contact person, and give an estimate of the time within which such market entry is likely to occur.

(370) The applicant is not aware of any undertakings that could enter the relevant market in the future.

However, due to the geopolitical situation, new country specific market entry is quite likely from

undertakings already active within the EEA.

5.3.3. Describe the various factors influencing entry into the relevant markets in this case, from both a geographical and product viewpoint. In so doing, take account of the following, where appropriate:

(a) the total costs of entry (research and development, distribution systems necessary, promotions, advertising, after-sales service, etc.) on an equivalent scale to that of a significant viable competitor, indicating the market share of a such competitor;

(371) In respect to third- and fourth party services, the applicant explains that the total costs of the entry

into the market are relatively low.

(372) In order to enter the market, the applicant considers that the highest entry costs are related to IT

solutions and systems which can generally either be sourced from third parties or built inhouse.

In case the IT solutions are sourced from third parties, a monthly subscription is possible.

(373) The applicant also notes that other costs for the entry is related to the presence of sorting centre.

Access to the sorting centre can also be provided through various lease contracts. It must also

be noted that for the provision of the third- and fourth party logistics services it is also necessary

to secure customer agreements with third parties. As this market primarily serves large e-

commerce companies from third countries, it is necessary to secure contracts with various e-

commerce companies in order to operate. In doing so, large e-commerce companies prefer to

conclude cooperation agreements with undertakings that could demonstrate previous experience

in the field of providing third- and fourth party logistics services.

86 (94)

(374) In relation to timing, market entry can take place relatively fast (in as little as 2-6 months83) and in

the opinion of the applicant, there are no significant barriers to reaching significant market

penetration, due to low customer loyalty and sensitivity to pricing and quality of the service. In

particular, a customer’s main contact with the postal operator in relation to third- and fourth party

logistics services takes place online, where the necessary application for logistics services can

be made. This also means that competing prices can easily be compared, with small price

differences able to shift customer choice. Market entry is also strongly influenced by national

legislation (the country where the company wishes to register its business activity) and other

aspects (IT resource, etc.).

(b) any legal or regulatory barriers to entry, such as government authorisation or the existence of any standards;

(375) The logistics service market is characterized by the fact that the business is operated on a B2B

basis. The provision of third- and fourth party logistics services does not require any permits,

government authorization or mandatory standards. In response to question 3 of the European

Commission’s RFI dated October 24, 2024, instead, it is necessary to understand international

trade regulations and customs procedures. However, Estonia's membership in the European

Union and its efficient customs systems make it easier for new entrants to navigate EU customs

procedures.

(c) any restrictions created by the existence of patents, know-how and other intellectual property rights in these markets and any restrictions created by the licensing of such rights;

(376) The provision of third- and fourth party logistics services is not significantly affected by the

existence of patents or other intellectual property rights. The applicant explains that a certain

amount of know-how is required to provide third- and fourth party logistics service. However, as

the characteristic features of logistics services are similar to other services usually offered by

postal operators, the know-how in the field of logistics services does not constitute a barrier to

entry.

(d) the extent to which the applicant is a licensee or licensor of patents, know-how and other rights in the relevant markets;

(377) Eesti Post is not a licensee or licensor of patents, know-how or other relevant rights which may

impact market entry for competitors.

(e) the importance of economies of scale for the production of products in the relevant markets;

(378) Due to a large portion of costs being fixed, economics of scale are important for the provision of

third- and fourth party logistics services. The larger the volume of goods served by Eesti Post, the

lower the unit cost to Eesti Post. The increase in cargo volume has the effect that Eesti Post will

be able to serve the additional volume lower-priced. Additionally, significant economies of scale

in the third- and fourth party logistics services would allow for further integration, which would

generate efficiencies.

(379) The applicant notes however that the economics of scale overall have a limited impact due to

relatively low fixed costs and relatively high marginal costs. Consequently, the diminishing returns

on ever increasing volumes on specific trade routes are quickly reached.

83 Please note that the entry to the market depends, in particular, on the legislation of the specific country (country

of registration) and other aspects (eg IT resource). In the European Union, market entry could range approximately

between 2-6 months after the undertaking is registered.

87 (94)

(380) Further, in order to service higher volumes, more infrastructure is needed, meaning that most

competitors focus on larger volumes. Consequently, the low volume part of the market can be

competitively serviced by even smaller service providers than Eesti Post.

(f) access to sources of supply, such as availability of raw materials.

(381) Access to various supplies (sorting hubs, transportation, IT) is freely available.

RESEARCH AND DEVELOPMENT

5.3.4. Give an account of the importance of research and development in the ability of an undertaking operating in the relevant market(s) to compete in the long term. Explain the nature of the research and development carried out by the applicant in the relevant markets.

In so doing, take account of the following, where appropriate:

(a) trends and intensity of research and development (20) in these markets and for the applicant;

(b) technological developments in these markets over an appropriate time period (in particular developments in products and/or services, production processes, distribution systems, and so on);

(c) the major innovations that have been made in these markets and the undertakings responsible for these innovations;

(d) the cycle of innovation in these markets and where the parties are in this cycle of innovation.

(382) The applicant explains that research and development (“R&D”) is of limited importance in

providing third- and fourth party logistics.

(383) At its core, the services of third- and forth party logistics services is a consolidation of services by

different third-party service providers. To some extent, the market players active in the provision

of third- and fourth-party logistics services may invest into IT development inhouse, which could

be counted as R&D, however this can be also outsourced, without any significant disadvantages

or advantages.

(384) In terms of long-term innovation, due to the relevance of transport capabilities in providing third-

and forth party logistics, focus on decarbonisation will likely pressure services providers to use

more environmentally friendly options. However, this is likely to originate from third party service

providers offering more environmentally friendly transport options, rather than from the market

players active in providing the third- and fourth party logistics services. This also means that

should any disruptive innovation take place, it is likely to be available for all market participants.

(385) Consequently, the applicant submits that R&D plays a limited role in providing third- and forth

party logistics services.

COOPERATION AGREEMENTS

5.3.5. To what extent do cooperation agreements (horizontal or vertical) exist in the relevant markets?

(386) The applicant submits that cooperation agreements are critical for the provision of third- and forth

party logistics services. Such agreements are necessary both for access to the market

(cooperation agreements with customers) as well as for providing third-and fourth party services

themselves (such as agreements with transportation companies).

5.3.6. Give details of the most important cooperation agreements concluded by the applicant in the relevant markets, such as research and development, licensing, joint production, specialisation, distribution, long term supply and exchange of information agreements.

(387) The applicant notes that the main volumes of Eesti Post originate from Chinese e-commerce

platforms, such as Alibaba and Ali Express. While Eesti Post has made efforts to diversify and

88 (94)

also service alternative customers, it has not yet reached any significant volumes in relation to

those customers.

(388) In respect to the Chinese e-commerce platforms - those relationships are governed by

cooperation agreements. Due to the market position of such Chinese e-commerce platforms, as

a standard, they have several cooperation partners in addition to Eesti Post, without any obligation

to direct volumes to a particular cooperation partner.

(389) In terms of supply, Eesti Post explains that is has cooperation agreements with transport

companies, in particular:

(390) Omniva LT UAB. Omniva Lithuania offers last mile service delivery – parcel machine and courier

service to end customers;

(391) Omniva EE. Omniva Estonia offers last mile service delivery – parcel machine, post office (and

courier service) to end customer;

(392) Omniva SIA. Omniva Latvia offers last mile service delivery – parcel machine and courier service

to end customer;

(393) OY MATKAHUOLTO AB. Matkahuolto offers last mile service – the delivery of parcels to end

customers in Finland;

(394) MEEST INTERNATIONAL Sp.z.o.o. Meest offers last mile service delivery and transportation to

destination countries – picking up parcels from sorting centres, delivery to destination countries

and distribution to end customers;

(395) RUSKO UAB. Rusko offers road transport service to destination countries. Parcels are picked up

from sorting centre and delivered by road to Belarus and Moldova. Parcels are then handed over

to POSTA MOLDOVEI and BELPOCHTA for delivery to end customers;

(396) HRX FINLAND OY.HRX offers road transport service to destination countries. The parcels are

picked up from sorting centre and delivered to Finland where the parcels are handed over to Eesti

Post’s partner Matkahuolto for delivery to end customers.

Supplier Contact information

OY MATKAHUOLTO AB

Address: Kaivokatu 10A, 00101 Helsinki,

Finland

Phone: +358 40 182 7076

E-mail: [email protected]

Internet address: https://www.matkahuolto.fi/en

MEEST EUROPE SP. Z O.O. Address: 02-786 Warsaw, Jana Rosola str. 10

Poland

Phone: +38 067 545 17 54

E-mail: [email protected]

Internet address: https://meest.com/

HRX FINLAND OY

Address: Nuolitie 20, 01740 Vantaa, Finland

Phone: +358 400 196 579

E-mail: [email protected]

Internet address: https://www.hrx.fi/en/

UAB RUSKO Address: Dariaus ir Gireno str. 42, Lithuania

Phone: +37052306585

E-mail: [email protected]

Internet address: https://www.rusko.lt/

OMNIVA LT UAB Address: Ateities road 45B, LT- 52104 Kaunas,

Lithuania

Phone: +37061918993

89 (94)

E-mail: [email protected]

Internet address: https://www.omniva.lt/eng

OMNIVA SIA Address: Dzirnieku street 24, Marupe, LV-

2167, Latvia

Phone: +37126008095

E-mail: [email protected]

Internet address: https://www.omniva.lv/eng

6. Section 6 — Exposure to competition

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

According to Article 34(2) of Directive 2014/25/EU, the question of whether an activity is directly exposed to competition must be decided on the basis of criteria that are in conformity with provisions on competition of the TFEU, such as the characteristics of the goods or services concerned, the existence of alternative goods or services, the prices, and the actual or potential presence of more than one supplier of the goods or services in question.

6.1. Explain why you consider that the activity covered by this request is fully exposed to competition in the relevant product market on the relevant geographical market(s). In particular, give the following information:

GENERAL CONDITIONS ON THE RELEVANT MARKET

6.1.1. Identify the five largest independent suppliers (21) to the applicant and their individual shares of the applicant's purchases (of raw materials or goods used to produce the relevant products). Provide the name, address, telephone number, fax number and appropriate contact person, of these suppliers.

(397) As noted above, the core of the service provided by Eesti Post is a consolidation of different

services by different suppliers. The applicant has provided an overview of the five largest

independent suppliers, outlining which type of services are provided (e.g. transport, warehousing

etc) and the share of such services that they supply to the applicant.

Table 28

Supplier Supply provided Share of applicants

purchases of that type of

supply (%)

MEEST INTERNATIONAL

Sp.z.o.o.

Transport & last mile delivery 25% of total last mile delivery

cost to Omniva International

Business (i.e. Eesti Post).

Last mile delivery – delivery of

parcels to the end customer in

the destination country

excluding Omniva

subsidiaries.

BELPOCHTA Last mile delivery 14% of total last mile delivery

cost to Omniva International

Business. Last mile delivery –

delivery of parcels to the end

customer in the destination

90 (94)

country excluding Omniva

subsidiaries.

OY MATKAHUOLTO AB Last mile delivery 8% of total last mile delivery

cost to Omniva International

Business. Last mile delivery –

delivery of parcels to the end

customer in the destination

country excluding Omniva

subsidiaries.

EU Broker UAB Sorting centre service

(Invoice to Omniva LT UAB)

100%. This is the only sorting

centre service Omniva

International business is

using at the moment. Omniva

International Business buys

this service from Omniva LT.

Omniva LT has outsourced it

to Lithuanian company EU

Broker.

KAZPOST Last mile delivery service 18% of total last mile delivery

cost to Omniva International

Business. Last mile delivery –

delivery of parcels to the end

customer in the destination

country excluding Omniva

subsidiaries.

(398) The contact information for the suppliers above has provided in the table below:

Table 29

Supplier Contact information

MEEST EUROPE SP. Z O.O. Address: 02-786 Warsaw, Jana Rosola str. 10 Poland

Phone: +38 067 545 17 54

E-mail: [email protected]

Internet address: https://meest.com/

RUE «BELPOCHTA»

Address: Nezalezhnasti Ave 220050, Minsk, the Republic of

Belarus

Phone: +375 17 2260173

E-mail: [email protected]

Internet address: https://belpost.by/

OY MATKAHUOLTO AB

Address: Kaivokatu 10A, 00101 Helsinki, Finland

Phone: +358 40 182 7076

E-mail: [email protected]

Internet address: https://www.matkahuolto.fi/en

UAB EU BROKER

Address: Silvestro Žukausko st. 13, Ramučiai, LT-54464

Kaunas distr., Lithuania

Phone: + 370 614 18975

E-mail: [email protected]

Internet address: https://www.eubroker.net/

АО «Kazpost» Address: 37 Beybitshilik Street, Nur-Sultan, 010000

Phone: +7 7172 611 699

E-mail: [email protected]

Internet address: https://www.kazpost.kz/en/

91 (94)

Please also identify the undertakings affiliated to the applicant and their individual shares of the applicant's purchases (of raw materials or goods used to produce the relevant products). Provide the name, address, telephone number, fax number and appropriate contact person, of these undertakings.

(399) The applicant explains that last mile delivery service is provided by undertakings within the group

of Eesti Post. More specifically, the last mile delivery service is generally (not always) not

outsourced from third parties but subsidiaries of Eesti Post (i.e. Omniva Estonia, Omniva SIA

(Latvia) and Omniva LT UAB (Lithuania) carries. The parcels are delivered to parcel machines or

transported directly to end customers. For the Baltic countries, almost all of the last mile delivery

is provided to Eesti Post by its national subsidiaries. That said, where Eesti Post is not able to

delivery sufficiently rapid deliveries in countries, other third-party providers are used (competitors

to Eesti Post).

(400) The applicant notes however that in terms of last miles services in Estonia, Eesti Post is not the

largest service provider and thus in the assessment of the applicant, access to local services

providers does not constitute a barrier to entry. Further, for competitors of Eesti Post who are also

postal undertakings and part of the Universal Postal Union, the subsidiaries of Eesti Post are

under an obligation derived from its membership to the Universal Postal Union to provide last mile

delivery services.

STRUCTURE OF SUPPLY IN THE RELEVANT MARKETS

6.1.2. Describe the distribution channels and after-sales service networks that exist in the relevant markets. In doing so, take account of the following, where appropriate:

(a) the existing distribution systems and their importance in these markets. To what extent is distribution performed by third parties or by undertakings affiliated to the applicant?

(b) the existing after-sales service networks (for example, maintenance and repair) and their importance in these markets. To what extent are these services performed by third parties or by undertakings affiliated to the applicant?

(401) The applicant explains that logistics services are provided to customers through their own IT

systems. In particular, the customer (e.g. AliExpress) will request a service to send a parcel from

point A to point B. For such a service, AliExpress will request the price from its contractual

partners, outlining where the packages will land (e.g. Frankfurt, Riga, (previously) Moscow) and

where it should be delivered (e.g. Ukraine, which was the largest destination country serviced by

Eesti Post).

(402) Service providers will provide pricing in the currency they deem appropriate (e.g. EUR, USD, etc)

for particular parcel sizes and quantities. The IT systems of AliExpress will subsequently pick the

most suitable option (generally based on price) for the delivery of from point A to point B. Since

third- and forth party logistics services is primarily dedicated for services e-commerce, such

setups for distribution are common for the entire market.

(403) In respect to after-sales services, such services are of limited important and at most, the provision

of tracking for parcels could be treated as after sales services. Such services are performed by

the service providers themselves as part of the core service.

6.1.3. Where appropriate, provide an estimate of the total EU-wide and EFTA-wide capacity for the last three years. During this period, what was the capacity of the applicant and what was the rate of its capacity utilisation?

(404) Outside of exceptional circumstances (e.g. COVID-19 and / or war), capacity concerns are

generally not relevant for the provision of third- and fourth party logistics services within the EU

or EFTA. This is because market participants can generally increase capacity quickly by simply

sourcing more options for transport or sorting and each country have several parties capable to

handle these volumes.

92 (94)

(405) As for the market overall (taking into account the last three-year average), the applicant notes

that traffic flows could increase by another 10% for capacity in the future which may become a

concern based on current infrastructure available in the EEA.

6.1.4. Please indicate any other supply-side considerations you consider to be relevant.

STRUCTURE OF DEMAND IN THE RELEVANT MARKETS

6.1.5. Identify the five largest independent customers of the applicant in the relevant market and their individual shares of total sales of the relevant products by the applicant. Provide the name, address, telephone number, fax number and appropriate contact person, of each of these customers.

(406) The applicant notes that Eesti Post has a few customers that account for all or almost all of its

trade flows. The applicant further notes that in order to diversify its portfolio, Eesti Post is currently

in negotiations with several Asian, European and American companies in order to also start

providing third- and forth party logistics services to such e-commerce platforms.

(407) The five largest independent customers of the applicant are as follows:

Name of customer Share of sales to

customer by the

applicant

Contact information

HANGZHOU CAINIAO

SUPPLY CHAIN

MANAGEMENT CO.,LTD.

69% of International

Business revenue and

16% of total Omniva

Estonia revenue

Address: Block B1,XiXi center,

No.588 West Wenyi Road, 310012,

Xihu District, Hangzhou, China

Phone: N/A

E-mail: [email protected]

Internet

address:https://global.cainiao.com/

POST11 OÜ 6% of International Post

revenue and 1% of total

Omniva Estonia

revenue.

For clarification,

POST11 OÜ was a

major customer of the

applicant until spring

2022. Some of the

business segments

offered by Post11 OÜ

disappeared from the

market, one of the

reasons being that

these were not

reasonably priced.

Address: Harju maakond, Tallinn,

Lasnamäe linnaosa, Pallasti tn 28,

10001

Phone: +372 6018855

E-mail: [email protected]

Internet address: N/A

INTERPOST LTD 1% of International Post

revenue and 0,2% of

total Omniva Estonia

revenue

Address: 216-217 Bedford Avenue,

Slough SL1 4RY, United Kingdom

Phone: N/A

E-mail: - [email protected]

Internet address:

https://www.maersk.com/

B2C Europe (Netherlands)

B.V.

2% of International Post

revenue and 0,5% of

total Omniva Estonia

revenue

Address: Damsluisweg 40, 1332 EB

Almere, The Netherlands

Phone: +34 622 799 390

93 (94)

E-mail:

[email protected]

Internet address: https://www.maersk.com/

Meest International LTD 3% of International Post

revenue and 0,7% of

total Omniva Estonia

revenue

Address: Rondo ONZ str. 1, 00-124

Warsaw, Poland

Phone: N/A

E-mail: [email protected]

Internet address:

https://www.meestinternational.com/

6.1.6. Explain the structure of demand in terms of:

(a) the different phases of the markets, for example, take-off, expansion, maturity and decline, and a forecast of the growth rate of demand;

(408) The applicant notes that the market for the provision of third-and fourth-party logistics is growing,

due to the increasing popularity of e-commerce.

(b) the importance of customer preferences, in terms of brand loyalty, product differentiation and the provision of a full range of products;

(409) In relation to product differentiation and the provision of full range of products, the applicant notes

that Eesti Post as well as its main competitors all provide similar product, with very small

differences in the products in practise. The differences are a result of each of the market

participants trying to distinguish its offering from the competitors, which allows it to offer a slightly

different price.

(410) In terms of customer preferences and brand loyalty, since services are provided exclusively to

businesses, customer preferences, if any are present, play a limited, if any, role on the choice of

the service provider. In Estonia, brand loyalty is typically lower than in consumer-facing sectors.

Clients are generally more willing to switch service providers for better service or lower prices.

(411) The applicant further notes customers generally have contractual relationships with several

service providers without any obligation to use any particular contractual partner. As a result, the

changing costs for customers are very low, if present at all.

(c) the degree of concentration or dispersion of demand;

(412) Due to the prevalence of e-commerce platforms, the customers are concentrated, leading to a

high degree of bargaining power.

(d) segmentation of customers into different groups with a description of the ‘typical customer’ of each group;

(413) The applicant notes that a typical customer is a large international e-commerce platform.

(e) the importance of exclusive distribution contracts and other types of long-term contracts;

(414) The applicant submits that it is not aware of any exclusive distribution arrangements for the benefit

of third- and forth-party logistics providers. In particular, due to the high concentration of e-

commerce platforms combined with the need for those platforms to arrange for the delivery of

goods to several different destinations, it would not be favourable for such an e-commerce

platform to limit its supplies.

(415) On the flip side, the applicant notes that generally, third and fourth-party service providers are not

bound by exclusivity either, since such provision of services would leave them exceedingly

vulnerable to the volumes of one e-commerce platform.

94 (94)

(f) the extent to which contracting authorities, State undertakings or similar bodies are important as a source of demand.

(416) The applicant notes that contracting authorities, state undertakings or similar bodies are not

important as a source of demand as the customer base of Eesti Post consists of large e-

commerce companies.

6.1.7. Provide estimates of the degree of consumer activity in terms of switching supplier and renegotiating contracts in the last five years. Also give the sources used for this and, where available, the necessary documents to confirm the estimates.

(417) Most customers of Eesti Post (of European, Asian and American origin) have concluded

cooperation agreements with several partners for the provision of last mile service. The customers

mainly use the services offered by different postal companies simultaneously and constantly

monitoring the speed, quality and price of the service offered. This enables the customers to

switch the volume between last mile partners if it proves to be necessary due to the quality of

service provided. For example, in 2017 when Eesti Post faced delivery speed issues for a short

period of time in Latvia and Lithuania, the customer decided to switch the delivery partner and the

volumes were handed over to Eesti Post’s competitors.

AS Eesti Post • Pallasti 28, 10001 Tallinn Eesti • Tel: 661 6616 • [email protected]

Jürgen Ligi Rahandusministeerium

[email protected] (kuupäev digiallkirjas) nr 7.2/00008

Euroopa Komisjonile taotluse esitamine otsesele konkurentsile avatuks määramiseks Lugupeetud härra Ligi Käesolevaga esitame Teile vastavalt riigihangete seaduse § 180 punktile 5 Euroopa Komisjonile

esitamiseks koostatud taotluse tegevuse otsesele konkurentsile avatuks määramiseks. Taotluse

esitamine Euroopa Komisjonile on vajalik, et võimaldada AS-il Eesti Post taotleda Euroopa Komisjonilt

otsust selle kohta, et teatavad AS Eesti Posti tegevused on Eestis piiramatu juurdepääsuga turul otseselt

konkurentsile avatud, millest tulenevalt ei ole AS-il Eesti Post selle otsusega hõlmatud tegevusega

seonduvate hankelepingute sõlmimisel kohustust riigihangete seadusest tulenevat korda järgida.

Riigihangete seaduse § 154 lõike 2 kohaselt toimub võrgustikusektori tegevuse otsesele konkurentsile

avatuks määramise otsustamine direktiivi 2014/25/EL art-le 35 vastavalt. Käesoleval hetkel veel ei ole

riigihangete seaduses ette nähtud, et taotlust saaks esitada AS Eesti Post ise, mistõttu peab taotluse

esitama Eesti riik.

Omandisuhtelt on AS Eesti Post 100% Eesti riigile kuuluv äriühing, mis kuulub Regionaal- ja

Põllumajandusministeeriumi haldusalasse. Riigihangete seaduse § 180 punkti 5 kohaselt on

Rahandusministeeriumi ülesandeks suhelda välisriigi asutustega riigihangete valdkonda puudutavates

küsimustes.

Lugupidamisega

(allkirjastatud digitaalselt)

Signe Kukin juhatuse liige

Lisa: Euroopa Liidule esitatav taotlus 94 lk

INFORMATION TO BE PROVIDED IN REQUESTS CONCERNING THE APPLICABILITY OF ARTICLE 34 OF DIRECTIVE 2014/25/EU

1. Section 1 — Identity and status of applicant

Article 35 of Directive 2014/25/EU provides that requests concerning the applicability of Article 34 are to be made by the Member States or, when the legislation of the Member State concerned provides for it, by the contracting entities. Depending on the case, the term ‘applicant’ may refer therefore to either the Member State or the contracting entities. It is used merely in the interest of simplification.

1.1. Full name and address of the applicant:

(1) Name: Ministry of Finance

(2) Address: Suur-Ameerika 1, Tallinn, 10122, Estonia

In the event that the activity covered by this request is carried out by undertakings affiliated (1) to the applicant, the term ‘applicant’ will be deemed to refer to both the entity indicated in point 1.1 and the affiliated undertakings in question. Thus, in particular for sections 5 and 6 below, it will be necessary to supply the requisite information for the ‘applicant’ as thus defined.

1.2. Status of the applicant: contracting authority (2), public undertaking (3) or private undertaking?

(3) The applicant is a contracting authority. For clarity, the applicant for the purposes of the current

request is represented by the Ministry of Finance.

(4) Eesti Post (hereinafter “Eesti Post”), which is fully owned by the Ministry of Regional Affairs and

Agriculture, in turn is the parent entity of the following legal entities:

(a) OÜ Finbite, an undertaking registered in Estonia with the registry code 16077631. OÜ

Finbite is active in the provision of payment solutions. More information on Finbite can be

found on its website here.

(b) OÜ Omniva – an undertaking registered in Estonia with the registry code 12670875. OÜ

Omniva did not generate any revenue during 2022.

(c) Picapac OÜ, an undertaking registered in Estonia with the registry code 12670875. Picapac

OÜ is a subsidiary of Eesti Post AS, specializing in the development of software and

hardware for parcel machines and related services.

(d) UAB Omniva LT, an undertaking registered in Lithuania, with the registry code 300087912.

UAB Omniva LT provided postal services in Lithuania and provides inputs for the

international activities of Eesti Post.

(e) UAB Omniva LT Sorting, an undertaking registered in Lithuania with the registry code

306053678. UAB Omniva LT Sorting was established with the aim of providing sorting

services in the Kaunas Free Economic Zone. Its main activity has been the establishment

of the Kaunas parcel sorting terminal.

(f) SIA Omniva, an undertaking active registered in Latvia, with the registry code

40103527192. SIA Omniva is active in the provision of postal services in Latvia.

(5) Eesti Post is the sole undertaking carrying out activities referred to in Directive 2014/25/EU.

However, under national law, it does not have the authority to submit a request under Article 35

on its own. Therefore, the request is submitted by the State, as represented by the Ministry of

Finance.

1.3. For a contracting authority: are you making the request for and on behalf of your Member State?

(6) As described under recitals (3)-Error! Reference source not found. above, the request is

submitted for and on behalf of Estonia. Information requested under sections 2 – 6 will be outlined

in respect to Eesti Post as the sole entity carrying out the activities covered by this request.

2 (94)

Accordingly, references to "the applicant" in the text below should be understood as referring to

Eesti Post.

If so, please supply the information requested for each point in sections 2 to 6 inclusive. With regard to each point in sections 5 and 6 in particular, please provide the requisite information for each of the entities carrying out the activity covered by this request. However, where there are a large number of such entities, the information may be restricted to those entities holding 10 % or more of the geographical market in question (4). Where the information is similar or identical for several entities, they may be grouped together, on condition that this is specified.

1.4. For contracting entities (the contracting authorities, the public undertakings and the private undertakings carrying out one of the activities referred to in Directive 2014/25/EU (5)): Please state the provision of national law stating that contracting entities may submit a request under Article 35.

(7) Estonian national law does not enable Eesti Post to submit a request under Article 35 on its own.

2. Section 2 — Description of the activity covered by this request

2.1. Describe the activity to which the conditions of Article 34(1) (6) apply in your view. The activity concerned may form a part of a larger sector (7) or be exercised only in certain parts of the Member State concerned.

(8) The request is submitted in relation to postal services as outlined under Article 13 of Directive

2014/25/EU. The applicant maintains that as per its best assessment and the past practice of the

European Commission in similar cases, the activities outlined below are directly exposed to

competition for the whole territory of Estonia.

(9) In particular, the following activities are covered by this request:

(a) International parcel services (inbound, outbound);

(b) Domestic parcel delivery services (express, standard);

(c) Printing services and packaging services;

(d) Third- and fourth-party logistics services (international business).

(10) In relation to third- and fourth-party logistics services, the applicant notes that the majority of the

business of that segment as carried out by Eesti Post is covered by the exclusion stipulated under

Article 7 (d) of Directive 2014/24/EU. However, since Eesti Post is providing the services in

combination with some postal functions, the applicant has included such services within this

request.

(11) The applicant further notes that while postal functions can arguably be at time considered

marginal, the share of postal to non-postal functions changes over time, given the unpredictable

nature of postal logistics in recent years due to both the COVID-19 pandemic and the war in

Ukraine. Consequently, the applicant prefers to include logistics services in the request as the

activity is clearly directly exposed to competition – Eesti Post is a marginal player in this segment

as postal services make up a marginal share of the logistic services provided by Eesti Post (about

less than 10%).

2.2. Where this differs from the national territory as a whole, indicate the area in which the activity covered by this request is carried out. Mention only the area in which you consider that the conditions of Article 34(1) are met.

(12) The applicant notes that other than for third- and fourth-party logistics services, all other services

are provided at least in the territory of Estonia as a whole. In respect to third and fourth-party

logistics services, such services are not provided within Estonia at all and are provided within the

territory of the EU.

3 (94)

3. Section 3 — The relevant market

A relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer, by reason of their characteristics, their prices and their intended use (8).

The following factors are normally considered to be relevant to the determination of the relevant product market and should be taken into account in the analysis (9):

— the own- and cross-price elasticities of demand of the relevant products and/or services,

— any differences in the end use to which the products are put,

— differences in price between two products,

— the cost of switching from one product to another, in the case of two potentially competing products,

— established or entrenched consumer preferences for one type or category of product,

— product classifications (classifications maintained by trade associations, etc.).

The relevant geographical market comprises the area in which the entities concerned are involved in the supply and demand of products or services, in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring areas because, in particular, conditions of competition are appreciably different in those areas (10).

Factors relevant to the assessment of the relevant geographical market include (11):

— the nature and characteristics of the products or services concerned,

— the existence of barriers to entry,

— consumer preferences,

— appreciable differences in market shares or substantial price differences between neighbouring areas,

— transport costs.

3.1. In the light of the above, please explain the definition of the relevant product market or markets that, in your opinion, should form the basis of the Commission's analysis.

In your reply, please give reasons for assumptions or conclusions, supported by appropriate empirical evidence (12), and explain how the factors outlined above have been taken into account. In particular, please state the specific products or services directly or indirectly affected by this request and identify the categories of products considered as substitutable in your market definition.

In the questions below, this (or these) definition(s) is (are) referred to as ‘the relevant product market(s)’.

Introduction to the Estonian postal sector

(13) As described under recitals (9) above, this request contains the following postal services in

Estonia:

(a) International parcel services (inbound, outbound);

(b) Domestic parcel delivery services (express, standard);

(c) Printing services and packaging services;

(d) Third- and fourth-party logistics services (international business).

(14) In response to question 2 of the European Commission’s RFI dated October 24, 2024, the

applicant explains that as of the end of 2023, the Estonian Competition Authority's annual report

on the postal sector indicates that there were 59 registered postal service providers in the Register

of Economic Activity. It is important to note that many of these providers offer multiple types of

postal services, and not all are active or operational. While Eesti Post does not have a precise

4 (94)

breakdown of active competitors in each service segment covered by the exemption request, the

table below from the Competition Authority's report provides a summary of postal service

providers by service type based on data from the Register of Economic Activity:

Postal Service1 2019 2020 2021 2022 2023

Universal postal service 1 1 1 1 1

Dispatch of letter items as ordinary, registered, and value-

added mail 2 2 2 2 2

Dispatch of parcels as ordinary, registered, and value-added

mail 1 1 1 1 2

Courier service 49 49 49 48 48

Direct mail service 7 7 6 6 6

Dispatch of periodicals 7 7 6 6 6

Other postal services 14

14 14 14 14

(15) Based on available public information, Eesti Post estimates that the 48 active courier service

providers (as of 2023) most closely align with the business segments covered by the exemption

request, i.e. these providers offer a range of services, including both national and international

parcel delivery, as well as express and standard options. The active courier service providers

listed in the Competition Authority’s report include: Bolt Operations OÜ, AS Eesti Post, A-Kuller

& Partnerid, AS Express Post, AS DPD Eesti, OÜ EKLT, DHL Express Estonia AS, SmartPosti

Estonia OÜ, FedEx Express Estonia AS, T Grupp OÜ, Autopost Terminal OÜ, Aberg Express

OÜ, Euroxkuller OÜ, Venipak Eesti OÜ, DK Logistics OÜ, Jet Express OÜ, OSC Transport OÜ,

Balti Logistika AS, K Security OÜ, FamLogistics OÜ, and Nova Post Estonia OÜ.

(16) Regarding the specific segments covered by this exemption request, Eesti Post notes that all

Eesti Post’s major competitors are active in the relevant postal segments to a significant extent.

While a few competitors, such as Bolt, are only active in domestic courier services (i.e. domestic

express parcel delivery), the low market barriers in this segment allow other competitors to enter

and expand their operations in this area if desired.

(17) In the light of above, the applicant explains that the Estonian postal sector, in particular in respect

to services outlined in this request, is characterised by relatively strong competition, with a number

of strong market players present. Outside of the services covered under this request, the

competition on the market is somewhat limited, as an example due to the presence of a single

market player providing Universal Postal Services (hereinafter “UPS”).

(18) As is the industry trend across the EU, revenues attributable to services traditionally part of UPS

services are rapidly decreasing with revenues decreasing 3,2% year-to-year during the year

2020, with volumes decreasing by 22,5% during the same timeframe. In the same period, in 2020,

Eesti Post's turnover in UPS with item content decreased by 8% (7% when normal letters are

included) and volumes decreased by 21% (10% including letters). In 2021, Eesti Post's UPS

turnover increased by 2% (1% with letters) and UPS volumes decreased by 20% (16% including

1 Report of the Competition Authority on developments and emerging issues in the postal services sector, as

well as the activities of the Competition Authority in this field in 2023. Link:

https://www.konkurentsiamet.ee/media/916/download. Please refer to the table on page 3 of Competition

Authority’s report.

5 (94)

letters). In 2022, the corresponding turnover of Eesti Post decreased by 22% (23% including

letters) and volumes by 43% (38% including letters).

(19) The applicant notes that the decreased volumes are on one hand partially attributable to a

significant decrease in letters sent by customers in favour of e-mails as well as new alternative

business models of private entities competing with services provided as part of UPS. This is in

particular so with international maxi letters (which can in essence be treated as small parcels from

a customer perspective) with an item content of up to 2kg. While Eesti Post provides such services

using the Universal Postal Union (hereinafter “UPU”) network, Eesti Post has in the last few years

noted appreciable decline in market share in favour of alternative business models competing

with the network provided by UPU. This is also reflected in the market data provided by Eesti Post

under section 5, where the share of maxi letters has significantly decreased, while the share of

parcels moving though alternative networks has increased.

(20) In respect to services not part of UPS (and thus subject to much more limited regulative

frameworks), the applicant explains that due to the size of Estonia and its close ties to its

neighbouring EU member states, the postal sector is highly competitive, with all of the major

market players having activities in all three Baltic states (Estonia, Latvia and Lithuania) as well as

Finland. Such market developments are largely the result of major international clients (Amazon,

About You, Wish, AliExpress, Ebay) who are looking towards a regional supplier in the Baltics

covering all of the aforementioned EU member states. As such, the market shares of the major

players are dynamic and may appreciably change year to year (even month to month). Significant

changes in market shares are very likely due to loss or gain of contracts with particular

international online retailers.

(21) This is noted by e.g. the changes of market shares of the main market participants in relation to

parcels in Lithuania between 2020 – 2023, as outlined in the graph below:

(22) While the changes in the above graph remain around +-10% within 1 quarter, the changes can

be more significant if the origin of the parcel is taken into account. E.g. For Eesti Post and due to

holidays, the year-end China based volumes have traditionally seen an uplift during the last few

6 (94)

months of the year. Due to a loss of contracts, both Latvian and Lithuanian delivery volumes for

Eesti Post have seen a significant reduction, as noted for Lithuania:

Month (2023) Latvia Lithuania

January 134687 74375

February 70071 84527

March 100123 132606

April 98035 116267

Mai 88846 91651

June 68003 266305

July 73810 280956

August 62264 353057

September 68003 276558

October 73810 334796

November 60014 102956

December 83564 128285

(23) Lasty and in particular for postal services offered within Estonia, the Estonian postal sector is

strongly impacted by a general focus of the population on IT services. While this focus was clearly

apparent amongst the younger part of the population prior to the COVID-19 pandemic, the

reduced physical access to postal offices and limitations on movement arising from measures to

mitigate the impact of the COVID-19 pandemic significantly increased the adaptation of smart

postal services that require no physical contact. For the purposes of Eesti Post, the change in the

behavioural habits of customers and limitations arising from the obligations outlined under

Directive 2014/25/EU, resulted in a significant competitive disadvantage, since due to the

obligations outlined under Directive 2014/25/EU, it is not able to effectively compete with its

competitors, therefore losing business to its competitors and being unable to match their growth.

This has been further outlined in detail under Section 5B of the application – Domestic courier

and express parcel services.

(24) For clarity, the applicant has limited this request to services part of product markets where Eesti

Post is subject to strong competition.

Overview of Licensing and Registration Requirements for Postal Services in Estonia

(25) In response to question 1 of the European Commission’s RFI dated October 24, 2024, the

applicant notes that for the services covered by the exemption request, a license is not required.

However, companies are obligated to notify the Estonian Competition Authority

(Konkurentsiamet) upon the start of their business activities. This notification is a simple process,

without complicated procedures, and does not create any barriers to entry for potential

7 (94)

competitors. In Estonia, the provision of postal services is primarily governed by the Postal Act

(postiseadus), which sets forth the requirements for both licensing and registration, depending on

the type of service being provided.

(26) As regards Eesti Post and its competitors, the business segments governed by the exemption

request, i.e. markets for services related to the delivery of parcels, does not overlap with the

traditional postal services that require a licence. While Eesti Post holds licences for certain

services; in the segments of express mail, direct mail, and parcel delivery (as part of letters

delivery), they (and other competitors) operate under the business activity declaration regime,

meaning they are registered rather than licensed.

(27) More specifically, a business licence is required for providing certain types of traditional postal

services, particularly for the delivery of letters (outlined under article 10 of the Postal Act). For

services that do not fall under the category of traditional letter delivery (such as parcels, express

mail, direct mail, etc.), there are no specific licensing requirements, but there are registration

requirements (outlined under article 21 of the Postal Act) instead. More specifically, operators

offering certain postal services are required to submit a business activity declaration to the

Estonian Competition Authority, which registers the service provider. These services include:

(a) Express mail services;

(b) Direct mail services;

(c) Delivery of periodical publications;

(d) Other postal services that do not involve the delivery of standard letters.

1.1.1. Overview of services concerned by this request

(28) This request contains the following postal services in Estonia:

(a) International parcel services (inbound, outbound);

(b) Domestic parcel delivery services (express, standard);

(c) Printing services and packaging services;

(d) Third- and fourth-party logistics services (international business).

(29) The applicant explains that Eesti Post is the only entity active in the postal sector in Estonia,

subject to public procurement rules.

1.1.2. International parcel services (inbound, outbound)

(30) In its past practice, the Commission has on several occasions assessed the market for parcel

services, explaining that parcel services can be segmented into standard and express parcel

services. The Commission explained that express services are faster and more reliable than

standard services and standard and express services requires different infrastructure in order to

enable additional value services, such as more advanced tracking. In practice, this leads to a

difference in price between standard and express services, with express services being more

expensive.2

2 See, e.g. Commission Decision of 27 May 2020, on the applicability of Article 34 of Directive 2014/25/EU of the

European Parliament and of the Council to contracts awarded for activities related to the provision of certain postal

services in Denmark (notified Under document C(2020) 3335), para 15.

8 (94)

(31) In addition to a potential segmentation between standard and express parcel services, the

Commission has previously assessed the standard parcel services market, considering potential

market segments based on (i) domestic and international parcel services,3 and (ii) consumer and

business parcel services4.

(32) In relation to the segmentation between domestic and international parcel services, the

Commission has previously explained that domestic parcel delivery services are provided by

companies operating a distribution network at national level, with international outbound mail

deliveries involving the collection, international transportation and delivery of parcels through an

entirely different network. This means that international outbound delivery normally engages two

services providers: one in the collection country and another in the destination country. In the

collection country, a company collects the parcels for transport to several destination countries,

followed by the same or another company then distributing the parcels to its final destination in

the destination country.5

(33) In relation to a segmentation between consumer and business parcels, the Commission has

explained that consumer and business parcels should be considered apart, since they satisfy

different needs of demand, and the technological process of this service usually differs

significantly.6 In particular, the Commission has explained that services provided to consumers

are generally provided under the public service obligation, requiring a network of post offices

available to consumers. Within the business parcel services segment, the Commission has further

considered a potential segmentation between B2B (Business to business) and B2C (business to

consumer) deliveries, explaining that from the supply side perspective, B2C deliveries requires a

denser network to reach private consignees, as opposed to business consignees, who are often

located in dense clusters.7

(34) The applicant notes that in line with the previous practice of the Commission, the product market

for standard parcel services should also be segmented between domestic and international

parcels for Estonia. The applicant explains that while in Estonia, both domestic and international

standard parcel services use the same national infrastructure (predominantly parcel machine

networks), international standard parcel services also require agreements to provide cross-border

services, which are not required in order to provide parcel services on a national level.

(35) In particular, the collection and acceptance of domestic and international parcels takes places

with the same infrastructure – i.e. parcel machines or courier. For clarification and in response to

question 4 of the European Commission’s RFI dated October 24, 2024, "parcel machine

networks" refer to the integrated systems of automated parcel collection and delivery points

located throughout Estonia. These networks facilitate the convenient pickup and drop-off of

parcels for consumers and businesses, using self-service kiosks or lockers that are accessible to

users. The significance of these networks lies in their role as an infrastructure that supports both

domestic and international standard parcel services. Illustrative examples of the automated parcel

collection and delivery points are the following:

3 Ibid, para 16. 4 Ibid, para 17. 5 See e.g. case COMP/M.5152 – Posten AB / Post Danmark A/S, para 55. 6 Ibid, para 59. See also Commission decision of 3 March 2010, exempting certain services in the postal sector in

Austria from the application of Directive 2004/17/EC of the European Parliament and of the Council (notified under

document C(2010) 1120), para 8. 7 Ibid, para 18.

9 (94)

Source: Daily newspaper Postimees. New Option for Parcel Pickup.

https://jarvateataja.postimees.ee/7755536/lisandus-veel-uks-postipaki-kattesaamise-voimalus

Source: https://www.linkedin.com/posts/veskimeister_i-took-this-random-picture-on-june-

192024-activity-7261677365959806977-jK9W/?utm_source=share&utm_medium=member_ios

For domestic shipments, the market participants are able to continue using the same

infrastructure, without the needing to access the parcel infrastructure of third parties. For

international shipments however, due to the lack of larger international parcel networks, the

market participants must enter into agreements with third parties to gain access to those

networks. Traditionally, most market participants operating in Estonia have the option to choose

with relative ease on what third party network to use. This is because in order to compete with

larger i.e. global market players, it is vital to be able to seamlessly opt for the best network for a

particular parcel. One caveat being parcels that are limited to the Baltics. Most market participants

are active across all three Baltic member states and are thus able to use their own networks for

parcels limited to the Baltics. That said in practise a small amount parcels originating from one

10 (94)

Baltic State to another still use third party services, if the market participants network is not able

to provide services at a desired quality level; i.e., Eesti Post has historically also used the

networks of its competitors for last mile deliveries in e.g. Latvia and Lithuania

(36) In respect to a potential segmentation between consumer and business parcels, the applicant

explains that this segmentation is of limited relevance for Estonia. In particular, standard parcel

services in Estonia are provided predominantly through parcel machine networks, which is not

part of the universal postal service obligation. As a result, the network used to provide services

to businesses and consumers overlaps. Furthermore, Estonia is a small and very sparsely

populated country, meaning that contact points for both consumers and business are located in

population centres, since there is little incentive to expand a parcel machine network into sparely

populated areas, where only a few potential consumers reside.

(37) For clarity, while some consumer parcels still use the network used for the universal postal service

obligation (in particular maxi letters with an item content of up to 2kg), this share of services is

continuously declining (see table 4 under Section 5A), since even with subsidies supporting the

upkeep of the post offices network, the service is less convenient for the consumer as compared

to parcel machines (parcel machines are more widely available with better opening hours (if not

accessible at all times). As a result, while currently costumers for parcel services fluctuate towards

using parcel machines, the maxi letters with an item content of up to 2kg remain an alternative in

Estonia to international standard parcel services, despite such services being only provided by

Eesti Post in Estonia. Maxi letters with an item content of up to 2kg being part of the international

parcel services market is also illustrated by the fact that currently approximately 95% of the

volumes in maxi letters with an item content of up to 2kg is related to e-commerce. As such the

applicant believes that maxi letters with an item content of up to 2kg should be considered part of

the international parcel services market.

(38) In conclusion, the applicant notes that the relevant product market for the purposes of this

application should be considered the provision of international standard parcel services in

Estonia, which includes the provision of both international standard parcel services using the

parcel machine networks as well as the provision of maxi letter services (with an item content of

up to 2kg).

(39) For clarity, the applicant explains that while in Estonia, only Eesti Post provides international maxi

letter services, there is significant pricing pressure arising from international parcel services. This

is because the provision of international maxi letters engages two service providers, as is the

case with standard international parcel services. In the past (and as has been pointed out in the

previous practice of the Commission8) some isolation from competition was available due to maxi

letters moving only through the Universal Postal Union network, which was accessible only to

postal operators providing the universal postal service obligation. The applicant explains that this

is no longer the case in Estonia.

(40) Firstly, Estonian legislation does not require international maxi letters to move using only the

UPU9 network. This means that the parcels (in the form of a maxi letter) may enter through the

post office network in Country A, however after that, the parcel can move into the international

parcel network as do other similar parcels. This works both ways – i.e. parcels which have initially

entered in their country of origin through the post office network, may be delivered in a parcel

machine in Estonia – provided the legislation in the country of origin allows for this (and to the

extent that the applicant is aware, most do).

8 See recital (32) above. 9 See here: https://www.upu.int/en/home

11 (94)

(41) Secondly, internationally, there are also similar competing options for postal operators outside of

the UPU network. In particular, the applicant explains that historically, letters with an item content

up to 2kg were moved via the networks used for international letters, in particular the network

provided by UPU. This was largely due to previous very low pricing of such parcel services,

meaning that private entities had no interest in services which directly competed with maxi letters

with an item content of up to 2kg. Due to the pricing reform (leading to increased pricing of the

services) initiated in the United States in 2019, the resulting increased prices attracted private

entities to develop similar business models to service mainly e-commerce customers, thereby

replicating the network provided by the UPU (e.g. Prime Tracked10, Interconnect Economy11),

allowing entry of new market participants and significantly increasing competition on the market.

(42) For conclusion and in response to question 11 (a) of the European Commission’s RFI dated

October 24, 2024, maxi letters, as offered by Eesti Post, are considered to compete with ordinary

postal parcels in the same product market. Both maxi letters from Eesti Post and small parcels

from competing postal service providers are similar in terms of size and functionality. The prices

of maxi letters are regulated by the Competition Authority. In practice, the price regulation for maxi

letters is cost-based, and since prices for comparable postal products are also primarily cost-

driven (margins are low), the price levels for maxi letters and similar postal items are generally

comparable. However, it is worth noting that over the years, the volume of maxi letter shipments

has been gradually decreasing, with a corresponding increase in the popularity of small parcels.

This trend suggests that maxi letters may not be as competitive as small parcels in the current

market. Eesti Post attributes this shift to the inflexibility of regulation and the slow adjustment of

pricing to market changes.

(43) As a result, the applicant notes that the provision of international maxi letters with an item content

of up to 2kg competes directly on the market with other international standard parcel services and

should belong on the same product market as those services.

1.1.3. Domestic standard and express parcel services

(44) The Commission has held in previous decisions that the market for mail delivery services can be

segmented into express and standard delivery services.12 Further, the Commission has also

considered the express and courier parcel services as one product market.13

10 See here: https://www.prime-posts.com/what-we-do/prime-tracked/ 11 See here: https://www.ipc.be/services/e-commerce-solutions/interconnect 12 See Commission implementing decision (EU) 2019/1204 of 12 July 2019 concerning the applicability of Directive

2014/25/EU of the European Parliament and of the Council to contracts awarded for certain activities related to the

provision of certain postal services and other services than postal services in Croatia (notified under document

C(2019) 5194)

COMMISSION IMPLEMENTING DECISION of 22 March 2013 exempting certain services in the postal sector in

Hungary from the application of Directive 2004/17/EC of the European Parliament and of the Council coordinating

the procurement procedures of entities operating in the water, energy, transport and postal services https://eur-

lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32013D0154&from=EN 13 COMMISSION DECISION of 16 March 2007 establishing that Article 30(1) of Directive 2004/17/EC of the

European Parliament and of the Council coordinating the procurement procedures of entities operating in the water,

energy, transport and postal services sectors applies to certain courier and parcel services in Denmark. https://eur-

lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32007D0169&from=ET. In relation to this decision and in

response to and in response to question 5 (a) of the European Commission’s RFI dated October 24, 2024, the

applicant explains that in the opinion of the applicant, the Commission’s approach indicates that the Commission

has treated courier and express parcel services as a single market in its analysis. Thus, it is reasonable to conclude

that the Commission may see these markets as interconnected, rather than separate. For further discussion

regarding Commission Decision of 16 March 2007, please refer to the applicant’s response to question 5 (a) of the

European Commission’s RFI dated October 24, 2024.

12 (94)

(45) The Commission explained in its previous decisions that the segmentation between standard and

express parcel services takes into account that express services are faster and more reliable than

a standard service, that each of those services requires a different infrastructure and that express

services compromise additional value-added services features, such as track and trace services

and are usually also more expensive.

(46) In its previous decisions, the Commission has also made a distinction between domestic and

international parcel delivery services.

(47) The applicant agrees with the past practise of the Commission and explains that in Estonia, parcel

services are offered either as courier services or through drop-off points, i.e. parcel machines. It

is in particular the parcel machines which are increasingly popular in Estonia and customers often

consider them as interchangeable to courier services. Further, all services are provided in Estonia

as same day or T+1 type services, where delivery takes place either on the same day from the

parcel being handed to the service provider or on the next day. This is regardless of whether the

service falls under the standard or express delivery segment under the Commissions previous

practise. This in turn makes the distinction between standard and express services as redundant

in Estonia, in particular in terms of demand substitutability.

(48) As example, it is common practise that even if the delivery is ordered by the customer as “express”

– i.e. pick-up and delivery by courier, the customers still often substitute the delivery in favour of

a parcel machine in practise, due to the ease of pickup (customer may not be at home when

courier arrives).

(49) In terms of supply substitutability, while there are some differences between the costs related to

express and standard parcel service, these are often related to volumes transferred. I.e. From a

collection point of view both express and standard services involve the arrival of a courier to a

pickup location. If the volumes match, then the cost per parcel is also comparable and similar. In

practise, the volumes however vary and on average more parcels are picked in a standard parcel

scenario as compared to an express parcel scenario (1-2 parcels by a courier with express parcel

services (on average) versus 10 parcels picked up on average by a courier in relation to standard

parcel service).

(50) The main cost difference comes in relation to delivery, however as noted there is very strong

demand side substitutability in respect to the delivery express and standard parcel services,

leading to a situation where all market participants are increasingly expected to have access to

standard parcel delivery infrastructure (i.e. parcel machines). The applicant has provided a

comparison between the average costs of standard parcel services and express parcel services

for clarity below.

Activity group Standard parcel

services

Express parcel

services

Collecting 0,10 0,48

Customer service 0,03 0,03

Delivery 0,28 1,02

Sales 0,25 0,25

Sorting 0,08 0,08

TOTAL Direct cost 0,74 1,86

(51) Nevertheless, if a distinction is made between standard and express services, the standard parcel

services would be composed of services using a parcel machine for final delivery and express

services as services using courier services for final delivery. In any case, the applicant believes

13 (94)

that the Commission can leave the final product market definition open, since the services would

be open to competition regardless of the above segmentation.

(52) For fullness of information, the applicant explains that traditional parcel markets are facing

increased competition from delivery platforms, offering same day, even same hour delivery, such

as Bolt14 and Wolt15. In contrast to traditional postal service, where even express delivery takes

up to 24 hours, the delivery platforms are able to organise delivery generally within an hour of the

customer making the purchase. Since Eesti Post is not active in such deliveries, such services

have currently not been included as part of the product market – however such services do enact

competitive pressure on more traditional domestic parcel services.

(53) In response to question 4 of the European Commission’s RFI dated October 24, 2024, the

applicant provides an elaboration and conclusion on demand-side substitutability and supply-side

considerations between standard and express parcel services as follows:

Demand-Side Substitutability

- Interchangeability of Services: In Estonia, customers increasingly view parcel

machines as interchangeable with courier services due to factors like convenience and

accessibility. For instance, many customers prefer parcel machines even for express

deliveries because they allow for easy pickup without needing to be home at the time of

delivery.

- Similar Delivery Times: Both standard and express services often operate on similar

timelines, with many deliveries occurring on the same day or the next day. This overlap

reduces the perceived differences between the two service types for consumers,

supporting the idea that they can be used interchangeably.

- Consumer Preferences: The growing popularity of parcel machines indicates a shift in

consumer preferences toward services that prioritise convenience, further supporting the

argument for demand-side substitutability.

Supply-Side Considerations

- Cost Structures: While there are differences in costs between standard and express

services, these differences are often volume-dependent. In practice, the cost per parcel

can align when the volumes are similar.

- Flexibility due to similar infrastructure: Companies providing both types of services

can adjust their operations based on demand. If demand for express services decreases,

providers can shift to enhance their standard service offerings without significant changes

to their infrastructure.

- Market Dynamics: The availability of alternative delivery options, like platforms (i.e. Bolt

or Wolt in Estonia) that provide fast service, adds competitive pressure to both standard

and express markets.

14 https://bolt.eu/en/cities/tallinn/ 15 https://wolt.com/en/est

14 (94)

(54) Further in response to question 4 of the European Commission’s RFI dated October 24, 2024,

regarding the similarities and differences between standard versus express parcel delivery

services, the applicant presents the following overview:

Demand-Side Considerations

Factor Similarities Differences

Importance of Delivery Time Both express and standard

services appeal to customers

who value certainty about

delivery time.

According to the Case M.7630 -

FEDEX / TNT EXPRESS,

express customers place a

higher emphasis on guaranteed

delivery within a specific

timeframe, while standard

customers are willing to accept

less urgency in delivery timing.

Although, as discussed under

recital 188, Eesti Post's internal

data reveals that parcel

machines (i.e. standard service)

demonstrate higher reliability

and efficiency in delivery speed

compared to couriers (i.e.

express service).

Switching Behaviour (Price

Sensitivity)

Both services are influenced by

price changes. Customers are

willing to shift between services

depending on price differences.

According to the Case M.7630 -

FEDEX / TNT EXPRESS,

customers are more willing to

switch from standard to express

if prices increase but are less

likely to switch from express to

standard even in the event of

price hikes. In contrast,

according to the applicant,

Estonian customers tend to

switch to standard services

when prices increase,

highlighting a regional

difference in price sensitivity

and service preference.

Service Appeal (Customer

Preferences)

Both services offer guarantees

such as track-and-trace.

According to the Case M.7630 -

FEDEX / TNT EXPRESS, the

standard product appeals to

customers who are willing to

trade speed for cost savings.

Express services are seen as a

premium offering for those who

prioritize speed, certainty, and

reliability over cost. Although, as

discussed under recital 188,

Eesti Post's internal data

reveals that parcel machines

(i.e. standard service)

demonstrate higher reliability

15 (94)

and efficiency in delivery speed

compared to couriers.

Supply-Side Considerations

Similarities Differences

Delivery chain: all the key stages of the delivery

chain such as pick-up and delivery haul, sorting,

ramp and customs clearance are the same for the

majority of express and standard deliveries.

Cost Structure: Express services typically incur

higher costs due to the service level offered.

Service Features: Basic tracking is available for

both services.

Service Flexibility: Express services often

provide more delivery options and tracking

capabilities than standard delivery.

Infrastructure: Both types use similar logistical

networks. All integrators use the same network to

ship both express and deferred products.

Market dynamics for consumers: Both are

influenced by customer demand for delivery

speed and service reliability.

1.1.4. Printing and packaging services for mail items

(55) The Commission has previously considered a separate product market for printing and packaging

services.16 The Commission explained that printing and packing services are offered as a

package of services for mass delivery which is a common practice in relation to mass

correspondence. The package includes, among other things, receipt of documents, printing,

enveloping and foliation, packaging. In order to increase cost efficiency, such internal processes

are often outsourced by companies to third parties.

(56) The applicant agrees with the earlier practise of the Commission and maintains that the relevant

market is the market for printing and packaging services.

1.1.5. Third- and fourth-party logistics services (international business)

16 See Commission Implementing Decision (EU) 2016/1195 of 4 July 2016 exempting courier services and other

services than postal services in Poland from the application of Directive 2014/25/EU of the European Parliament

and of the Council on procurement by entities operating in the water, energy, transport and postal services sectors

and repealing Directive 2004/17/EC (notified under document C(2016) 3986).

16 (94)

(57) The Commission has previously, in particular in relation to Sweden17, assessed the market for

third- and fourth-party logistics services. In accordance with its previous practice, third- and fourth-

party logistics services is defined as including import, warehousing and distribution as well as

direction, control and development of the customer’s flows of goods.18 The Commission has in

its previous practice also assessed a similar service under the product market for contract

logistics, which it defined as outsourced logistics and the associated data system

services/logistics application and consultation services.19

(58) The applicant notes that the aforementioned product market definitions of the Commission

overlap to a large extent, since under both definitions, the service provided is in essence

international logistics services entailing the direction and control of the customer’s flow of goods

heading towards a particular destination country. In any case, the applicant submits that there is

no need to reach a conclusion on the final product market definition, since the market share of

Eesti Post would be negligible under any plausible market definition. In line with the earlier

practise of the Commission, the applicant notes that the product market could be defined as the

market for third- and fourth-party logistics services.

(59) The applicant explains that Eesti Post mostly provides services to the major Chinese retailers

AliExpress and Alibaba for the delivery of goods both within the EU as well as outside of the EU.

In essence, the customer will arrange for the shipping (usually via plane) of goods from China

into an airport in Europe. Subsequently, it will request the services of a third- and forth-party

logistics services provider (such as Eesti Post) to arrange for collection, toll procedures, sorting

and arranging the logistics for delivery to the destination country, where the goods are distributed

by the local service providers.

(60) To the extent that the applicant is aware, e.g. Alibaba has an estimated 60 services providers

providing third- and fourth-party logistics services, out of which Eesti Post has a share of

approximately less than 0.1% based on volume. The applicant further notes that the market is

highly dispersed, meaning that to the extent that it is aware out of its main competitors (i.e.

services providers within Europe), only large international service providers, such as DPD or DHL

have a market share of 10% or more, with all other competitors having a lower market share. The

corresponding market data has been provided in Section 5E of this application.

3.2. Please explain the definition of the relevant geographical market or markets that in your opinion should form the basis of the Commission’s analysis. In your reply, please give reasons for assumptions or conclusions, supported by appropriate empirical evidence (13), and explain how the factors outlined above have been taken into account. In particular, please specify the geographical area in which the entity or entities concerned by this request are active in the relevant product market(s), and if you consider the relevant geographical market to be wider than a single Member State, give the reasons for this.

In the questions below, this (or these) definition(s) is (are) referred to as ‘the relevant geographical market(s)’.

17 Commission Decision of 19 December 2008, exempting certain services in the postal sector in Sweden from the

application of Directive 2004/17/EC of the European Parliament and of the Council coordinating the procurement

procedures of entities operating in the water, energy, transport and postal services sectors (notified under document

number C(2008) 8409) 18 Ibid, recital 2 (k). 19 Commission Decision of 6 August 2007, exempting certain services in the postal sector in Finland, excluding the

Åland Islands, from the application of Directive 2004/17/EC of the European Parliament and of the Council

coordinating the procurement procedures of entities operating in the water, energy, transport and postal services

sectors (notified under document number C(2007) 3700), recital 21.

17 (94)

1.1.6. International parcel services (inbound, outbound)

(61) The Commission has in its previous practice considered the market for international parcel

services as national20, however in related merger proceedings, has also noted that market

dynamics are increasingly leading towards international markets.21 The applicant agrees with the

previous practice of the Commission and notes that in respect to Estonia, the geographic market

is at least national, potentially pan-Baltic. For clarity, the applicant has at this stage provided

market data on the smallest possible geographic definition, i.e national.

(62) In respect to a potential pan-Baltic market definition, the applicant notes that the conditions of

competition across Estonia, Latvia and Lithuania are relatively homogeneous. The main factors

supporting a pan-Baltic market definition are that:

(a) customers in all three Baltic states prefer parcel machines as compared to alternative

solutions – e.g. having parcels delivered to their doorstep or picking the parcel from postal

offices /stores offering postal services,

(b) all main market participants in Estonia have a pan-Baltic parcel machine network,

resulting in similar offering across all three Baltic countries;

(c) larger international business or postal operators look for a regional partner (covering at

least Estonia, Latvia and Lithuania), rather than a national partner.

(63) That said and in response to question 10 of the European Commission’s RFI dated October 24,

2024, since the applicant believes that the market can be considered open to competition

regardless of the geographic market definition, the precise definition of the market can be left

open.

1.1.7. Domestic standard and express parcel services

(64) The Commission has in its previous practise assessed the geographic scope of the market for

domestic express parcel services to be national in scope. The Commission further explained that

this segmentation is mainly based on the fact that such services are provided at national level.22

(65) The applicant agrees with the prior practise of the Commission and further notes that the domestic

express parcel services are provided either as courier services or through parcel machines

located in different population centres close to or inside of commercial locations all over Estonia.

Thereby the domestic express parcel service is offered all over Estonia to all consumers located

in Estonia. The foregoing indicates that the geographic scope of domestic express parcel service

is national in scope.

1.1.8. Printing and packaging services for mail items

20 See, e.g. Commission Decision of 27 May 2020, on the applicability of Article 34 of Directive 2014/25/EU of the

European Parliament and of the Council to contracts awarded for activities related to the provision of certain postal

services in Denmark (notified Under document C(2020) 3335), para 21. 21 See e.g. case COMP/M.5152 – Posten AB / Post Danmark A/S, para 68. 22 See Commission implementing decision (EU) 2019/1204 of 12 July 2019 concerning the applicability of Directive

2014/25/EU of the European Parliament and of the Council to contracts awarded for certain activities related to the

provision of certain postal services and other services than postal services in Croatia (notified under document

C(2019) 5194), para 17.

COMMISSION IMPLEMENTING DECISION of 22 March 2013 exempting certain services in the postal sector in

Hungary from the application of Directive 2004/17/EC of the European Parliament and of the Council coordinating

the procurement procedures of entities operating in the water, energy, transport and postal services, para 19.

https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32013D0154&from=EN.

18 (94)

(66) The Commission has in its previous practise assessed the geographic scope of the market for

printing and packaging services for mail items to be national in scope. The Commission explained

that the printing facility is organized nationally (even if the printing can be done outside of the

national territory). The Commission further explained that the national product market definition

is also supported by pricing differences between different Member States and that the services

themselves are performed for potential and actual national senders in view to optimise their

internal processes and reduce their cost.23

(67) The applicant agrees with the prior practise of the Commission and further notes that the facilities

for the provision of services are located in Estonia. For clarity, the applicant has not assessed

pricing differences between different Member States, however notes that the final product market

definition can be left open since even on a national product market definition, Eesti Post is not the

largest services provider and thus access to the market can be considered not restricted due to

the presence of Eesti Post.

1.1.9. Third- and fourth-party logistics services (international business)

(68) The Commission has in its previous practise assessed the geographic scope of the market for

third- and fourth-party logistics services as national24. The applicant notes that while it agrees with

the past practise of the Commission, it notes that the product market definition for the purposes

of the current assessment may be wider than national, potentially covering at least the EEA or

even a wider area.

(69) The applicant notes that the core service Eesti Post offers to its clients is the control of the

customers goods heading towards a particular country. For that purpose, Eesti Post mainly

receives its import volumes in Riga (Latvia). From Riga, the import volumes are transported to

the Kaunas (Lithuania) sorting center for sorting. From Kaunas, volumes are transported mainly

by land transport to destination countries – Lithuania, Latvia, Estonia, Finland, Ukraine, Belarus

(stopped after Ukrainian war), Moldova, Kazakhstan, Kyrgyzstan and Georgia. Depending on the

entry and destination of particular import volumes, Eesti Post has access to sorting centres also

in England, Finland, Holland, Germany and most recently in Estonia.

(70) The applicant notes that to the extent that it is aware, Eesti Post and its main competitors provide

the services internationally, with the advantages and disadvantages being determined by the

location of the hubs (sorting centers) of the respective competitors. Thus, the market shows strong

indications for a wider than national geographic scope. Nevertheless, there are still some

indications that the market is national, since in order to offer final delivery, capacity for local

distribution is required. For the purposes of the applicant, this is generally sourced from third

parties active in the destination country. In any case, there is no need to determine the final

product market definition, since the market share of Eesti Post would remain marginal under any

plausible product market definition.

(71) For clarity, the applicant has provided market data for Eesti Post both on pan-European market,

as well as on a national market.

23 See Commission Implementing Decision (EU) 2016/1195 of 4 July 2016 exempting courier services and other

services than postal services in Poland from the application of Directive 2014/25/EU of the European Parliament

and of the Council on procurement by entities operating in the water, energy, transport and postal services sectors

and repealing Directive 2004/17/EC (notified under document C(2016) 3986), para 30. 24 Commission Decision of 19 December 2008, exempting certain services in the postal sector in Sweden from the

application of Directive 2004/17/EC of the European Parliament and of the Council coordinating the procurement

procedures of entities operating in the water, energy, transport and postal services sectors (notified under document

number C(2008) 8409), para 22.

19 (94)

4. Section 4 — Applicability of the legislative acts referred to in Annex III to Directive 2014/25/EU.

4.1. Is the activity covered by this request subject to one of the legislative acts referred to in Annex III to Directive 2014/25/EU (14)? If so, indicate the act or acts of national law transposing the Union legislation concerned.

(72) In Estonia, Directive 2008/6/EC has been transposed into national law through the Postal Act

(Postiseadus), which was amended to incorporate the provisions of the directive. For reference,

please see: Postal Act (Postiseadus), RT I 2008, 53, 297 (draft law only in Estonian).

Consequently, access to the relevant market should be deemed to be unrestricted in accordance

with Article 34 (3) of Directive 2014/25/EU.

20 (94)

5. Section 5A - International parcel services (inbound, outbound)

5. Section 5 — Information concerning the relevant market and access to that market

Overview of services provided under the product market for international business parcel service

(73) As noted under Section 1.1.2, the market for international parcel services consists of the provision

of standard parcel services originating from outside of a particular EU member state (inbound)

and services relating to parcels to be delivered outside of a particular member state (outgoing).

The main players active on this market in Estonia are Eesti Post, SmartPosti Estonia OÜ

(“SmartPosti”), DPD Eesti AS (“DPD”), FedEx Express Estonia AS (“TNT/Fedex“), DHL Express

Estonia AS (“DHL“), Venipak Eesti OÜ (“Venipak“) and Osaühing EKLT (“EKLT/UPS“).

(74) Eesti Post is the Estonian incumbent postal operator, operating under the trademark “Omniva”.

Rather than an Estonian national postal operator, Eesti Post is better described as an international

logistics company, focusing on the Baltics (Estonia, Latvia and Lithuania).

(75) SmartPosti was formally a standalone market participant operating under the trademark

“SmartPost”. In 2010, SmartPost was acquired by SmartPosti, the Finnish incumbent postal

operator.25 Smartpost Itella adopted the new brand name SmartPosti in the first half of 2025.

(76) DPD belongs to the DPD group, which is one of the world leading parcel delivery networks, with

market presence in all EU member states.26

(77) TNT/Fedex operated as two different companies until September 2023. The takeover of TNT

Estonia by FedEx has started and the merger process of the companies is currently underway.

The main activity of the company is the provision of international express courier and transport

services.27

(78) DHL operates in Estonia through DHL Express Estonia AS and DHL Logistics Estonia OÜ. DHL

is the world's leading logistics company serving more than 220 countries and territories.28

(79) Venipak manages a network of contactless parcel machines in Estonia, Latvia and Lithuania and

offers a fulfillment service.29

(80) EKLT/UPS is an authorized contractor and courier service provider in Estonia under the UPS

brand since 1994.30

(81) In relation to the Estonian parcel market, the Commission has in its past practice noted that

behaviours of customers vary between countries, for instance noting that in Denmark, customers

are used to parcel deliveries at their doorstep, whereas Swedish consumers appear more

accustomed to picking up their deliveries at the post office/shop with post service.31 The applicant

notes that this observation is also relevant for Estonia, where customers prefer picking up and

sending their parcels from parcel machines, often located close to retail stores and other

infrastructure objects. This is also confirmed by the fact that over the years the share and

coverage of parcel machines in the Estonian market has grown rapidly. In essence this means

that the main market participants all have parcel machine networks. Since parcel machines

25 Official webpage of SmartPosti: https://www.smartposti.ee/ 26 Official webpage of DPD: https://www.dpd.com/ee/en/ 27 Official webpage of TNT/Fedex: https://www.tnt.com/express/et_ee/site/home.html 28 Official webpage of DHL: https://www.dhl.com/ee-en/home.html 29 Official webpage of Venipak: https://venipak.com/ee/en/ 30 Official webpage of EKLT/UPS: https://www.eklt.ee/ 31 See Case COMP/M.5152 – Posten AB /Post Danmark A/S, para 66.

21 (94)

generally come with lockers with predetermined size, this is also reflected in the competitive

environment.

(82) In particular, the services provided by Eesti Post and its main competitors can be further

segmented into different price brackets based on either size or weight. The applicant notes

however that the differences between the market participants in each of the categories are

relatively minor, with very similar pricing between each of the main market players. If

internationally the shipment is delivered to a pick-up point or parcel machine, measurement-

based pricing32 is used, whereas in the case of courier delivery, it is based on weight.

(83) Eesti Post, SmartPosti and DPD also provide services where the price depends on the size, and

the differences between size categories are very small:

Table 1 - Parcel sizes (Eesti Post, SmartPosti, DPD)

Dimensions Eesti Post33 SmartPosti34 DPD35

Extra small* - 5*34*42 cm 8*18*61 cm

Small 9*38*64 cm 12*34*42 cm 8*43*61 cm

Medium 19*38*64 cm 20*34*42 cm 17*43*61 cm

Large 39*38*64 cm 34*36*42 cm 36*43*61 cm

Extra-large Longest side 1,5 m,

sum on length and

bottom circumference

up to 3 m.

60*36*60 cm Longest side 1,75 m,

sum on length and

bottom circumference

up to 3 m.

Bigger than extra-

large

Longest side 2,5 m,

sum of length and

bottom circumference

up to 4 m

- -

*the dimensions offered by Eesti Post for extra small parcels are for maxi letters with an item content of up to 2kg.

Table 2 - Parcel maximum weight (Eesti Post, SmartPosti, DPD)

Maximum weight Eesti Post36 SmartPosti37 DPD38

Extra small - 5 kg 31,5 kg

Small 30 kg 35 kg 31,5 kg

Medium 30 kg 35 kg 31,5 kg

32 For clarification and in response to question 7 (a) of the European Commission’s RFI dated October 24, 2024,

"measurement-based pricing" refers to a pricing structure that is determined by the dimensions of the parcels,

specifically their size. 33 Eesti Post parcel sizes available here: https://www.omniva.ee/public/files/failid/hinnakiri-pakk-pakiteenus-era-

est-en-2024-uus.pdf 34 SmartPosti parcel sizes available here: https://www.smartposti.ee/en/sending/parcel-prices#domestic-parcel 35 DPD parcel sizes available here: https://www.dpd.com/ee/en/baltics/ 36 See reference 32. 37 See reference 33. 38 See reference 34.

22 (94)

Large 30 kg 35 kg 31,5 kg

Extra-large 30 kg 35 kg 31,5 kg

Bigger than extra-large 100 kg - -

(84) In the light of above and in the case of measurement-based pricing, Eesti Post does not offer the

XS category, but maxi letters as an alternative. The maximum dimensions of maxi letter can be

either 230*230*20 mm or the sum of the length, width and height being 900 mm and the maximum

weight can be 2 kg, the price depends on the weight (0-250 g, 250-500 g, 0.5-1 kg and 1-2 kg).39

This service is mainly used for small and light items, which competitors offer in the XS category.

(85) In terms of Eesti Post, for the services where the price depends on the weight, the maximum

dimensions and the maximum weight are exactly the same, as for the largest categories in Table

1 and Table 2. As DPD and SmartPosti do not display on their websites the price lists for

international business letters, it is not possible to say with 100% certainty that the price lists are

similar to those of Eesti Post, but this information has been provided by Eesti Post's sales

managers based on customer feedback.

(86) DHL uses a different categorization method slightly different dimensions, which in turn are also

related to the maximum weight:

DHL size category Dimensions Weight

Envelope 35*27,5 cm 0,5 kg

Box 2 33,7*18,2*10 cm 1 kg

Box 3 33,7*32,2*10 cm 2 kg

Box 4 33,7*33,2*18 cm 5 kg

Box 5 33,7*32,2*34,5 cm 10 kg

Box 6 41,7*35,9*36,9 cm 15 kg

Box 7 48,1*40,4*38,9 cm 20 kg

Box 8 54,1*44,4*40,9 cm 25 kg

(87) Based on the tables above, DHL’s weight limits are close to those offered by Eesti Post, with an

exemption being that the upper limit of weight for parcels sent through Eesti Post are higher.

Those parcels make up a marginal share of the overall parcels sent, thus, it can be assumed that

the above implies that parcel categories of both competitors are priced according to similar

principles.

(88) In addition to the above, Venipak, TNT/Fedex, DHL and EKLT/UPS also offer services where the

price depends on both the weight and the size of the shipment, i.e. the volumetric weight is taken

into account and the price is based on either the real weight or the volumetric weight (whichever

is higher). Since they also offer transport of trays, they do not provide the maximum dimensions

of "parcel size" shipments, but the maximum dimensions assume that a shipment is packed on a

tray:

39 Information about the maxi letter service provided by Eesti post is available here:

https://www.omniva.ee/private/letter/letter_to_abroad#popup_box-88

23 (94)

Venipak40 TNT/Fedex41 DHL42 EKLT/UPS43

Maximum

dimensions

120*100*170 cm 240*120*150 cm 240*120*220 cm Longest side 2,47 m

cm, sum of length

and girth 4 m

(89) In conclusion, extra small parcels are only provided by SmartPosti and DPD, with Eesti Post

providing a viable alternative as maxi letters with an item content up to 2kg. Due to weight and

size limits, the maxi letters compete mostly against extra small parcels (please see recital (83) for

more details). This means that maxi letters should be considered as a similar product and an

alternative to extra small parcels provided by competitors.

(90) In response to question 7 (b) of the European Commission’s RFI dated October 24, 2024, in

addition to the key difference mentioned – where measurement-based pricing is used for

shipments delivered to a pick-up point or parcel machine, and weight-based pricing is applied for

courier delivery – there are other factors that influence the method of pricing. These include the

capabilities of the shipping companies' systems and their sorting infrastructure. Depending on the

company's logistics and the type of service provided (e.g., domestic vs. international, standard

vs. express), they may choose to use a size-based pricing model, weight-based pricing, or a

combination of both. Additionally, flat-rate pricing is often used by smaller local companies, while

distance-based pricing is common with services like Wolt or Bolt. Regarding the breakdown of

pricing methods, it is important to note that for postal services and letter-sized shipments, the

pricing is generally based on weight. For 2023, approximately 11% of shipments, particularly for

pick-up and drop-off (PUDO) services, were priced based on size. The remaining 89% were

priced according to weight for other services,

This section must be completed irrespective of the reply to point 4.1 above.

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

5.1. Please give the reasons why you consider that access to the relevant market is not restricted.

(91) The applicant explains that the market is characterised by several major market players, with at

least 5 market players with a market share of above 10%. While out of those Eesti Post is

estimated to have the largest market share, its market share remains below 40%.

(92) This itself indicates that Eesti Post is subject to appreciable competitive pressure, thereby being

a strong indication for the market being open to competition.

40 Venipak maximum parcel size is available here: https://fast.venipak.com/siuntu-pakavimas 41 TNT/FedEx maximum parcel size is available here: https://www.tnt.com/express/et_ee/site/how-to/calculate-size-

and-weight.html and https://www.fedex.com/content/dam/fedex/international/rates/fedex-rates-export-et-ee.pdf 42 DHL maximum parcel size is available here: https://www.dhl.com/content/dam/dhl/local/nl/dhl-

freight/documents/pdf/nl-freight-eurapid-weight-and-dimensions-charging-rules-en.pdf 43 EKLT/UPS maximum parcel size is available here: https://www.ups.com/ee/en/support/shipping-

support/shipping-dimensions-weight.page

24 (94)

(93) The applicant further explains that due to the growing nature of the market and increase in

alternative services providers (i.e. offering same hour delivery (e.g. Wolt) etc.), new undertakings

are encouraged to enter the market. This incentive combined with very low customer loyalty

allows for a rapid change of market shares due to competitive conditions on the market.

(94) The market situation and the lack of access restrictions to relevant market are also described in

more detail in recitals 0-(112) of the application.

5.2. For each relevant market, for each of the last three financial years (15), and for each of the following territories:

(a) the EEA territory;

(b) the EU as a whole;

(c) the territory of the EFTA States as a whole;

(d) each Member State and each EFTA State where the applicant carries out an activity; and

(e) the relevant geographical market (16), if the applicant considers that this market is different

Please provide the information referred to in points 5.2.1 to 5.2.9

5.2.1. an estimate of the total size of the market in terms of sales value (in Euro) and volume (units) (17), indicating the basis for the calculations and sources used and providing documents, where available, to confirm these calculations;

5.2.2. the sales in value and volume, as well as an estimate of the market share held by the applicant;

5.2.3. an estimate of the market share in value (and, where appropriate, volume) of all competitors (including importers) having at least 10 % of the geographical market under consideration. Provide documents, where available, to confirm the calculation of these market shares and provide the name, address, telephone number, fax number and appropriate contact person, of these competitors;

(95) The applicant explains that the relevant market for international parcel services is national, with

indications that the potential scope could be wider, potentially covering all of the Baltics. This is

because multiple market participants, such as Eesti Post, SmartPosti and Venipak for example,

operate across the Baltic region.

(96) In respect to market share on all of EU or EEA, the applicant notes that it only provides parcel

services in Estonia, Latvia and Lithuania. Consequently, its market share on an EEA or EU level

would be marginal. In relation to its market share in the territory of the EFTA States, the applicant

notes that Eesti Post is not active in the EFTA territories in relation to parcel services and thus

does not have market presence. As a result, the applicant requests the Commission to waive the

requirement stipulated under section 5.2 points (a) – (c) to provide data for the relevant market

for each of the last three financial years.

(97) For ease of data interpretation, the applicant has provided information requested under points

5.2.1 - 5.2.3 in a single table, segmenting the information based on value, volume and

distinguishing between B2X and C2X business segments.

Accordingly, the applicant has provided market data for the following international segments in

the following order:

(a) International parcel services (including inbound, outbound);

(b) B2X segment;

(c) C2X segment.

25 (94)

(98) In respect to the total market size and market share of its competitors international parcel service

services in respect to value (EUR), the applicant has relied on its best judgment, public data44

and public data on revenues from the Estonian tax authority for undertakings registered with the

Estonian Classification of Economic Activities (EMTAK, national equivalent to NACE

classification) for Other postal and courier activities (NACE code H53.2) and freight transport by

road (NACE code H49.4.1, for known competitors only).

(99) In respect to the total market size, the applicant notes that, there are further smaller market

players on the market, who possess international parcel networks also extending to Estonia,

however regarding whom clear market data is not available. Such competitors are major

international parcel services providers, such as DHL, TNT/Fedex and UPS. The overall revenue

generated by the Estonian legal entities of such is available on the market, however such revenue

is not segmented based on domestic or international, nor inbound or outbound. Consequently,

the applicant has provided its best estimate for such market players.

(100) The estimates are based on the proportion of international versus domestic postal services for

Eesti Post, with the same logic for the inbound and outbound market segments.

(101) In respect to the market size in terms of volume, no market data is available, and the applicant

has provided the market estimates of the market share as a percentage, based on the pricing

differences between Eesti Post and its competitors. Based on the different price levels of the

competitors, an assumed volume in units of the competitor has been derived. Subsequently, the

market volume of each competitor has been calculated by considering the volume of Eesti Post,

which relies on internal data of Eesti Post.

(102) The applicant further clarifies that Eesti Post lacks specific data regarding the precise breakdown

of competitors' international parcel service between their business (B2X) and private (C2X)

segments. Eesti Post's understanding of this segmentation is based on its best estimation of how

competitors' service volumes are divided between their business and private customers. In

general, the majority of international parcels are e-commerce related and thus part of the B2X

segment. This is also reflected in the overall market numbers, where Eesti Post assumes the

large majority of parcels to be part of the B2X segment, as compared to the C2X segment.

(103) The applicant wishes to note, that there have been changes in data compared to the originally

submitted application, to the extent that the data analysts have changed and, in connection with

this, the quality has also increased. Data changes are not marginal and do not show a drastically

different picture, i.e. changes of market value and volume are generally within 1-2%.

Table 3 - International parcel service (value)

Inbound and Outbound

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Volume (units)

Value (EUR)

Eesti Post 17 953 979 24% 15 017 240 19% 19 267 685 22%

Out of which maxi letters (up to 2kg)

8 361 029 5 190 325 2 341 146

SmartPosti 10 048 446 13% 10 763 786 13% 12 110 975 14%

DPD 12 307 982 16% 13 607 059 17% 12 670 382 15%

Venipak 3 159 177 4% 3 801 584 5% 4 969 337 6%

44 Example of public market share data can be found here: https://www.e-kaubanduseliit.ee/uudised/juuni-juulikuu-

pakiautomaatide-mahtude-monitooring.

26 (94)

TNT/Fedex 14 006 220 19% 14 890 503 18% 17 191 067 20%

DHL 13 256 332 18% 16 536 027 21% 14 048 452 16%

EKLT/UPS 4 743 282 6% 5 929 103 7% 5 924 579 7%

Total market 75 475 418 100% 80 545 302 100% 86 182 477 100%

Table 4 - International parcel service (volume)

Inbound and Outbound

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Eesti Post 6 158 153 38% 4 087 269 26% 6 222 461 35%

Out of which maxi letters (up to 2kg)

4 513 654 2 462 751 1 639 643

SmartPosti 1 944 680 12% 2 083 120 14% 2 368 573 13%

DPD 1 944 680 12% 2 149 936 14% 1 994 779 11%

Venipak 567 198 3,5% 682 536 4% 895 933 5%

TNT/Fedex 2 430 850 15% 2 584 322 17% 2 995 312 17%

DHL 2 268 793 14% 2 830 106 18% 2 413 672 13%

EKLT/UPS 810 283 5% 1 012 854 7% 1 013 655 6%

Total market 16 124 637 100% 15 430 143 100% 17 904 386 100%

Table 5 - B2X (value)

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Eesti Post 13 891 369 21% 11 600 465 16% 15 588 519 20%

Out of which maxi letters (up to 2kg)

2 341 146

SmartPosti 8 038 757 12% 8 611 029 12% 9 893 245 13%

DPD 10 461 785 16% 11 566 000 16% 10 654 264 14%

Venipak 2 843 259 4% 3 421 426 5% 4 566 113 6%

TNT/Fedex 12 885 722 20% 13 699 262 19% 15 981 396 21%

DHL 12 726 079 19% 15 874 586 23% 13 695 381 18%

EKLT/UPS 4 553 551 7% 5 691 939 8% 5 722 967 8%

Total market 45 712 739 100% 65 400 522 100% 70 464 707 100%

Table 6 - B2X (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Eesti Post 5 923 098 39% 3 889 489 27% 6 056 818 36%

Out of which maxi letters (up to 2kg)

1 639 643

27 (94)

SmartPosti 1 750 212 11% 1 874 808 13% 2 153 974 13%

DPD 1 750 212 11% 1 934 942 13% 1 782 413 10%

Venipak 521 822 3% 627 933 4% 838 017 5%

TNT/Fedex 2 309 307 15% 2 455 105 17% 2 864 097 17%

DHL 2 200 729 14% 2 745 203 19% 2 368 351 14%

EKLT/UPS 785 975 5% 982 469 7% 987 824 6%

Total market 15 241 356 100% 14 509 949 100% 17 051 495 100%

Table 7 - C2X (value)

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Eesti Post 4 062 610 40% 3 416 774 34% 3 679 166 36%

SmartPosti 2 009 689 20% 2 152 757 21% 2 217 731 22%

DPD 1 846 197 18% 2 041 059 20% 2 016 119 20%

Venipak 315 918 3% 380 158 4% 403 224 4%

TNT/Fedex 1 120 498 11% 1 191 240 12% 1 209 671 12%

DHL 530 253 5% 661 441 7% 353 072 4%

EKLT/UPS 189 731 2% 237 164 2% 201 612 2%

Total market 10 074 896 100% 10 080 594 100% 10 080 594 100%

Table 8 - C2X (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Eesti Post 235 055 27% 197 780 21% 165 643 19%

SmartPosti 194 468 22% 208 312 23% 214 599 25%

DPD 194 468 22% 214 994 23% 212 367 25%

Venipak 45 376 5% 54 603 6% 57 916 7%

TNT/Fedex 121 542 14% 129 216 14% 131 215 15%

DHL 68 064 8% 84 903 9% 45 321 5%

EKLT/UPS 24 308 3% 30 386 3% 25 831 3%

Total market 883 282 100% 920 193 100% 852 891 100%

(104) While out of the above Eesti Post is estimated to still hold the largest market share in most

international segments of value and volume as of 2023 data (see Table 3, Table 4, Table 6 and

Table 7), its market share remains below 30% in terms of value and 40% in terms of volume.

While Eesti Post has managed to increase its market share marginally, the growth is mostly

attributable to significant volume of low value parcels from Aliexpress and Cainiao, as stated

below in recital 107. Their volumes for 2023 made up almost 30% of Eesti Posts overall volume

and considering that the volume results from 2 single customers who is able to quickly renegotiate

or change suppliers in case of a price increase, the market share of Eesti Post that actually

represents its market strength should be about 30% less than indicated the tables above.

28 (94)

(105) For clarification and response to question 8 of the European Commission’s RFI dated October

24, 2024, the applicant clarifies that the increase in Eesti Post's market share indicated in Table

4, which rose by 9% in 2023 compared to 2022, can be attributed primarily to Eesti Post’s strategic

partnerships with major e-commerce platforms, such as Aliexpress and Cainiao. Eesti Post has

established framework agreements with these companies to manage their parcel flows. While

similar agreements have also been concluded by Eesti Post’s competitors, the final decision on

which operator will handle these parcels is determined through a competitive tender process

among Estonian postal operators. This segment of the market is highly competitive, particularly

due to the substantial volumes handled by, for example, Aliexpress and Cainiao. As such, pricing

strategies play a critical role in securing these contracts. In 2023, Eesti Post successfully

optimized its pricing model, strengthening its competitive position against other operators. This

significantly contributed to the growth of Eesti Post’s market share throughout the year 2023.

(106) For further background regarding Chinese e-commerce clients and in response to question 9 of

the European Commission’s RFI dated October 24, 2024, the applicant further explains that

Chinese e-commerce clients generally do not display long-term loyalty to one service provider.

These customers typically handle large volumes of low-value parcels, and their decisions can be

highly price-sensitive. A small difference in service price – sometimes even as little as a few cents

– can lead to a complete shift in volume to a competing logistics provider. That is why we believe

that the market share of Eesti Post, which appears to be higher due to these large but volatile

international volumes, should be adjusted down. In other words, while the volume from Chinese

customers may make up a significant portion of Eesti Post's overall international parcel volumes,

this volume is less stable and more likely to change rapidly in response to pricing pressures from

competitors. As a result, the market share represented by this business should be considered

less reflective of Eesti Post's long-term market strength.

(107) With regard to the rest of the suppliers, while Eesti Post was the only undertaking who had lost

market share for the period between 2019-2022, it has managed to stabilize thanks to the volumes

connected to Aliexpress and Cainiao. That said, the main competitors of Eesti Post have

managed to increase their market share between 2019-2022 at the cost of Eesti Post, thus

indicating competitive pressure arising from them.

(108) This all indicates that Eesti Post is subject to appreciable competitive pressure, thereby being a

strong indication for the market being open to competition.

(109) One notable competitor is Venipak, who has managed to exponentially increase the coverage of

their parcel machine network, and it is now almost mirroring that of Eesti Post.

(110) Eesti Post also believes that Unisend Eesti OÜ’s45 market share will also increase in the following

years as they have also actively expanded their network with parcel machines similarly to

Venipak. The company was founded on November 29, 2023, and therefore, it is still difficult to

assess their actual impact on the market. However, according to their own website, as of today,

they already have 145 parcel machines across Estonia and over 750 throughout the Baltics. The

total number of parcel machines at the end of 2023 in Estonia was around 900.

(111) It must also be noted that the share of maxi letters has fallen sharply in recent years which further

demonstrates that the market is open to competition. If in 2021, 8 361 029 maxi letters were

served by Eesti Post then in 2023, this number was already 1 639 643, with initial data from 2024

indicating a further decline of about 15%. According to the applicant, this sharp decline is linked

with three factors. Firstly, according to Eesti Post, the sending of maxi letters is a product that is

gradually being phased out, with decreasing consumption by consumers each year, as the service

45 Official wepage of Unised Eesti OÜ: https://unisend.ee/en/

29 (94)

is less convenient for the consumer as compared to parcel machines (parcel machines are more

widely available with better opening hours (if not accessible at all times). Secondly, as a result of

the expansion of its competitors' market, Eesti Post has lost a large part of its maxi letter service

volumes to the alternatives offered by its main competitors because, as described above, the

latter have expanded rapidly in the market. According to Eesti Post, Eesti Post has lost the volume

of its maxi letters primarily to DHL but also to other market participants. Thirdly, a further reason

for the decrease in the volume of maxi letters is that parcels sent from AliExpress started to be

consolidated (if one person ordered from several different sellers at the same time, they were no

longer sent as separate parcels but packed together into a single shipment).

(112) In light of the above, the expansion of competitors’ activities in the market has led to a situation

where the market share of Eesti Post has decreased in recent years, both in terms of value and

volume, leading to increased prominence of its competitors. Considering these circumstances, it

can be stated that the market is opened to competition.

(113) The contact details for the competitors are provided below:

Competitor Contact info

DPD Eesti AS

Address; Harju County, Rae parish, Lehmja village, Taevavärava tee 1,

75306

Phone: +372 613 0012

Email address: [email protected]

Internet address: https://www.dpd.com/ee/en/

SmartPosti

Address; Harju County, Rae parish, Lehmja village, Loomäe tee 13, 75306

Phone: +372 699 0431

Email address: [email protected]

Internet address: https://www.smartposti.ee/

Venipak Eesti

OÜ

Address; Harju County, Tallinn, Lasnamäe, Osmussaare tn 8, 13811

Phone: +372 641 4481

Email address: [email protected]

Internet address: https://venipak.com/ee/en/

Federal

Express

Corporation

Eesti filiaal

Address; Harju County, Tallinn, Lasnamäe, Valukoja tn 32/3, 11415

Phone: +372 605 8692

Email address: [email protected]

Internet address: https://www.tnt.com/express/et_ee/site/home.html

DHL Express

Estonia AS

Address; Harju County, Tallinn, Lasnamäe, Valukoja tn 32/3, 11415

Phone: +372 680 8555

Email address: [email protected]

Internet address: https://www.dhl.com/ee-en/home.html

Osaühing

EKLT

Address: Harju maakond, Tallinn, Lasnamäe, Valukoja tn 22, 11415

Phone: +372 666 4700

Email address: [email protected]

Internet address: www.eklt.ee

30 (94)

5.2.4. an estimate of the total value, volume and source of imports from outside the EEA territory and identify:

(a) the share of such imports attributable to the applicant;

(b) an estimate of the extent to which any quotas, tariffs and non-tariff barriers to trade constitute barriers to these imports; and

(c) an estimate of the extent to which transportation and other costs affect these imports.

(114) The applicant explains that the provision of postal services requires the presence of a local postal

network, which in turn requires local presence for market players. This remains true for

international (outbound, inbound) postal services. This is because the provision of outbound and

inbound international parcel services requires a national postal network with access to networks

in destination countries or countries, wherefrom the parcel originates.

(115) Consequently, the applicant notes that the share of imports from outside the EEA territory is not

relevant for assessing the direct exposure to competition for the provision of postal services and

asks the Commission to waive the requirement under this Section 5.2.4.

5.2.5. the extent to which trade between States within the territory of the EEA is hindered by:

(a) transportation and other costs; and

(b) other non-tariff barriers to trade.

(116) The applicant explains that for the provision of international parcel services, the key requirement

is a local (national) parcel network and access to networks in destination countries or where the

parcel originates from or where the outgoing parcel is directed.

(117) Such access is provided through vertical agreements with service providers located in other

jurisdictions.

(118) The applicant explains that within the EEA, as long as postal operators have access to any of the

aforementioned networks, along with a local presence, there are no appreciable barriers to trade.

5.2.6. the manner in which the applicant produces and sells the products or services; for example, whether they are manufactured locally, or are sold through local distribution networks;

(119) The applicant notes that international parcel services (both inbound and outbound) are provided

through the same local distribution network consisting of post offices and parcel machines and

services. Majority of market players (e.g. DHD, UPS) also provide the service through its courier

network.

(120) The preference between post offices versus parcel machines is generally determined by the

customer, with the overwhelming majority of Estonian customers preferring parcel machines.

(121) From the supply side, the applicant notes that while only Eesti Post has access to a post office

network, this is not an advantage, since the costs associated with the upkeep of such a network

do not allow for the provision of parcel services to compete without public subsidies.

5.2.7. a comparison of the applicant's and its competitors' price levels in each Member State and EFTA State and a similar comparison of price levels between the EU, the EFTA States and other areas where these products are produced (for example, Eastern Europe, the United States of America, Japan, or any other relevant area);

(122) Eesti Post assesses its price based on costs as well as competitor pricing.

(123) As noted under recital (83), parcels can be segmented into six different categories by size, with

each category having its own pricing. Generally, the pricing is very similar between Eesti Post

31 (94)

and its main competitors and depends on the weight, size and destination of the parcel as is

illustrated by the tables under recital (124).

(124) The applicant explains that in general the pricing between Eesti Post46 and its competitors

(SmartPosti47 and DPD48) is more or less the same. A comparison between the provision of

services from Estonia to Latvia and Lithuania can be found below for small, medium and large

parcels:

Small parcels Estonia - Latvia Estonia - Lithuania

Eesti Post 6,99 € 8,09 €

SmartPosti 7,01 € 8,13 €

DPD 6,92 € 8,03 €

Small parcels Estonia - Latvia Estonia - Lithuania

Eesti Post 8,09 € 9,28 €

SmartPosti 8,02 € 9,14 €

DPD 7,93 € 9,05 €

Small parcels Estonia - Latvia Estonia - Lithuania

Eesti Post 9,09 € 11,39 €

SmartPosti 9,04 € 10,15 €

DPD 8,94 € 10,07 €

(125) For clarity, the applicant further notes that it also provides international parcel services through

maxi letters with an item content of up to 2kg, using the post office network. In respect to pricing,

the price is determined by the weight of the letter and the destination and thus varies significantly.

5.2.8. the nature and extent of the vertical integration of the applicant compared with the largest competitors;

(126) The applicant notes that in general, the importance of vertical integration is limited and does not

result in any significant competitive advantage. At most, vertical integration is an indication of

closeness of competition between each of the postal operators.

(127) As a starting point, the provision of international business parcel delivery uses several inputs

which can either be sourced from third parties or provided by the postal operators themselves.

Whether or not certain inputs are sourced from third party service providers or are supplied

“inhouse” through vertical integration depends on the business models of each of the postal

operators.

(128) The main inputs which may either be bought in or provided via vertically integrated divisions of

the postal operators are IT and land or air transport. In respect to IT, the costs to developing an

inhouse IT solution for customers to interact with e.g. parcel machines are comparable to having

the IT solutions provided by third parties. While the inhouse solution does provide more flexibility,

46 Eesti Post parcel prizing is available here: https://www.omniva.ee/public/files/failid/hinnakiri-pakk-pakiteenus-era-

est-en-2024-uus.pdf 47 SmartPosti parcel prizing is available here: https://www.smartposti.ee/en/sending/parcel-prices#domestic-parcel 48 DPD parcel prizing is available here: https://www.dpd.com/ee/en/price-list/

32 (94)

ultimately, the solutions provided by third parties have sufficiently matured and the need for

additional flexibility as compared to third party solutions is relatively low.

(129) In respect to vertical integration related to transport – this does result in some advantages, in

particular in relation to express parcel services, however the volumes needed to take significant

advantage of this are not present on the Estonian market, thus the competitive advantage is

minor, if present at all.

(130) One notable exception regarding the extent of vertical integration for international parcel delivery

is the fact that Eesti Post and its main competitors are also present in other Baltic countries. Since

international business parcels also move between Estonia, Latvia and Lithuania, this allows each

of the market participants to use their own parcel networks in Estonia and in the other Baltic

countries. In practice, this allows for a more flexible provision of services for parcels moving

between Estonia, Latvia and Lithuania – e.g. increased IT integration so that cross-border parcel

services are provided to customers under similar conditions as domestic parcel services.

5.2.9. information on the cost structure of the applicant (18). Also, specify any assets or infrastructure used jointly with other entities or used to carry out more than one activity covered by Directive 2014/25/EU. Where the use of such assets or infrastructures is subject to special conditions, such as universal service obligations or special rights, please specify.

(131) The applicant explains that in terms of infrastructure used, Eesti Post uses two distinct

infrastructures to provide international parcel services. In particular, the parcel machine network

and the post office network. The applicant explains however that the post office network is not

required for the provision of international parcel services and is there only due (i) the universal

service obligation resting on Eesti Post, and (ii) since the provision of maxi letters (with an item

content of up to 2kg) remains competitive with alternatives offered by the main competitors of the

Eesti Post (who use the parcel machine network to do so).

(132) In addition to the presence of a parcel machine network, the other main costs are made up by

land and air transport and IT.

(133) Aside from transport, almost all other required assets and infrastructure is used to carry out more

than one activity covered by Directive 2014/25/EU. In particular, the parcel machine network is

used to offer both domestic and international standard parcel services and the post office network

is used to carry out all services under the universal service obligation.

(134) In particular, the following assets are used for the provision of international parcel services49:

(a) parcel machines;

(b) post offices;

(c) distribution centers;

(d) sorting line and related equipment;

(e) commercial vans and truck;

(f) domestic transport;

(g) frontline workwear;

(h) office;

(i) IT: Core system (infa, ERP, CRM, DWH);

(j) IT: Parcel related.

(135) The universal service obligation in Estonia includes the following50:

49 The table also illustrates the assets concurrently used by Eesti Post for other service segments. 50 Article 5(2) of the Estonian Postal Act. Available online here:

https://www.riigiteataja.ee/en/eli/531122021006/consolide

33 (94)

(a) the forwarding of items of correspondence weighing up to 2 kilograms as ordinary,

registered and insured items;

(b) the forwarding of postal parcels weighing up to 20 kilograms as registered and insured

items.

(136) In response to question 11 (b) of the European Commission’s RFI dated October 24, 2024, Eesti

Post explains that it does receive compensation for discharging the Universal Service Obligation

(USO), but the compensation is strictly allocated for these universal services and does not involve

any cross-subsidization with other business segments. In the context of Eesti Post’s exemption

request, the compensation is only relevant for the provision of “maxi letter” related services under

international parcel service business segment, as this falls within the definition of universal postal

services according to the Postal Act. In response to question 3 of the European Commission’s

RFI dated December 16, 2024, the applicant confirms that there is no cross-subsidisation

between services under the universal service obligation (maxi-letters) and other business

segments, such as international parcel services.

5.3. Please provide the following information:

5.3.1. Over the last five years, has there been any significant entry to the geographical market(s) for the relevant products (19)? If the answer is ‘yes’, where possible provide the name, address, telephone number and fax number of the undertaking concerned, as well as the appropriate contact person, and an estimate of their current market share.

(137) Eesti Post is not aware of any significant entry to the geographic markets within the last five years.

That said, Venipak and Unisend are competitor who have aggressively expanded their market

presence, via installation of new parcel machines (see recitals (109) and (110) above). Thus, the

applicant expects that both Venipak and Unisend will significantly increase, potentially triple its

market share in the next few years.

5.3.2. In the opinion of the applicant are there any undertakings (including those at present operating only in markets outside the EU or outside the EEA) that could enter the market? If the answer is ‘yes’, please explain why and identify such undertakings by name, address, telephone number, fax number and appropriate contact person, and give an estimate of the time within which such market entry is likely to occur.

(138) The applicant does not consider there to be any applicants who could enter the market from

outside the EU or EEA.

5.3.3. Describe the various factors influencing entry into the relevant markets in this case, from both a geographical and product viewpoint. In so doing, take account of the following, where appropriate:

(a) the total costs of entry (research and development, distribution systems necessary, promotions, advertising, after-sales service, etc.) on an equivalent scale to that of a significant viable competitor, indicating the market share of a such competitor;

(139) The applicant notes that in respect to international parcel services, the average Estonian

customer has a very strong preference towards parcel machines compared to other alternative

options (i.e. postal offices or even courier). This means that successful market entry requires a

parcel machine network, with Eesti Post estimating the minimum number of parcel machines

required at around 50 with an average cost of under EUR 10 000 per parcel machine. Accordingly,

and in response to question 3 of the European Commission’s RFI dated October 24, 2024,

establishing a reliable logistics network may pose another barrier to entry. However, in Estonia's

relatively small market, the geographical distance and population density allow some flexibility

compared to larger countries, making it less challenging to scale up an efficient logistics network

in Estonia as it might be in more densely populated regions. As a result, the entry barriers in

Estonia are lower due to its small size, but players must invest in technology to stay competitive.

34 (94)

(140) Other costs necessary for market entry relate to the presence of an online IT solution (e.g.

investing in advanced tracking systems), which can generally either be sourced from third parties

or built inhouse. In case the IT solutions are sourced from third parties, a monthly subscription is

possible. In response to question 1 of the European Commission’s RFI dated December 16, 2024,

the applicant further explains that the main investments required from the IT side to operate on

the market or operating on the international parcel services market is advanced software for

routing and logistics as well as apps for better customer experience. Today, a number of service

providers offer Software-as-a-Service (SaaS) solutions that provide essential functionalities at

competitive prices, significantly lowering the initial investment barrier. For instance, SaaS

products can cost as little as €0.5 per kg, depending on the provider. Examples of such services

include platforms like Qstep51, CargoWise52, IBS iCargo53, and Logistaas54. These solutions allow

new entrants to leverage advanced technology without requiring significant initial capital.

Furthermore, partnerships with established players in the logistics and delivery industry also

provide an opportunity for new businesses to enter the market with minimal investment. An

example of this model is Post.plus55, which started by partnering with Lithuanian Post to offer

services, effectively lowering the capital requirements. Alternatively, a company could choose to

develop its own software system, which could lead to further reductions in long-term operating

costs.

(141) Further costs relate to the presence of a distribution center. To sum up, entering the market is

quite simple, primarily requiring a sufficient volume of shipments to be serviced rather than any

specific expertise or specialized know-how. The total costs for market entry can be estimated at

between price range of about MEUR 1 – 1.5. Provided the market entry is initiated from larger

population centers, 50 parcel machines could net a market share of around 5.5%.

(142) In relation to timing, market entry can take place relatively fast (in as little as 9 months) and there

are no significant barriers to reaching significant market penetration, due to low customer loyalty

and sensitivity to pricing and quality of the service. In particular, a customer’s main contact with

the postal operator in relation to international parcel services takes place online, where the

necessary application for parcel services can be made. This also means that competing prices

can easily be compared, with small price differences able to shift customer choice.

(143) In relation to brand loyalty, one exception is SmartPosti with relation to international parcels going

to or arriving from Finland. As a general trend, customers of SmartPosti wishing to send parcels

to Finland or receiving parcels from Finland overwhelmingly favour SmartPosti for their service

provider, with Eesti Post estimating that roughly 70-80% for Finland related international parcels

moving through the SmartPosti network.

(144) As a result, each of the main market participants aim to differentiate their product offerings, which

could allow for different pricing for different product segments.

(b) any legal or regulatory barriers to entry, such as government authorisation or the existence

of any standards;

(145) The provision of international parcel services does not require any permits, government

authorization or mandatory standards.

51 https://qstep.eu/ 52 https://www.cargowise.com/ 53 https://www.ibsplc.com/product/air-cargo-solutions/icargo 54 https://logistaas.com/enterprise/ 55 https://post.plus/

35 (94)

(c) any restrictions created by the existence of patents, know-how and other intellectual property rights in these markets and any restrictions created by the licensing of such rights;

(146) The applicant submits that there are no restrictions to entry created by the existence of patents,

know-how or other intellectual property rights.

(d) the extent to which the applicant is a licensee or licensor of patents, know-how and other rights in the relevant markets;

(147) Eesti Post is not a licensee or licensor of patents, know-how or other relevant rights which may

impact market entry for competitors.

(e) the importance of economies of scale for the production of products in the relevant markets;

(148) Due to a large portion of costs being fixed, economics of scale are important for the provision of

international parcels services. In particular, significant economies of scale in the parcel sector

would allow for further integration, which would generate efficiencies and allow for lower pricing.

(149) However, due to the smallness of the Estonian market, Eesti Post considers it unlikely that

economies of scale could impact competition between the market participants. That said Eesti

Post notes that in order to recoup initial investment costs and fixed costs related to the parcel

machine network, a minimum of 10% customers/ market share is required. Regarding the above

number, according to the applicant, a market player with a 10% market share has sufficient

capacity to cover its own operating costs. In the case of parcel services, this percentage is more

likely to be around 5 %, but for courier services the figure is higher, estimated to be slightly above

10 %, as serviced volume is more important in this business segment.

(f) access to sources of supply, such as availability of raw materials.

(150) Access to various supplies is freely available.

RESEARCH AND DEVELOPMENT

5.3.4. Give an account of the importance of research and development in the ability of an undertaking operating in the relevant market(s) to compete in the long term. Explain the nature of the research and development carried out by the applicant in the relevant markets.

In so doing, take account of the following, where appropriate:

(a) trends and intensity of research and development (20) in these markets and for the applicant;

(b) technological developments in these markets over an appropriate time period (in particular developments in products and/or services, production processes, distribution systems, and so on);

(c) the major innovations that have been made in these markets and the undertakings responsible for these innovations;

(d) the cycle of innovation in these markets and where the parties are in this cycle of innovation.

(151) The applicant notes that research and development plays a marginal role in competition, with the

main development related to the IT – i.e. user experience (UX) design and the presence of online

services.

(152) Other potential developments could relate to alternatives to parcel machine networks, such as

delivery by drones etc., however such developments have not yet seen widespread use in

Estonia.

36 (94)

COOPERATION AGREEMENTS

5.3.5 To what extent do cooperation agreements (horizontal or vertical) exist in the relevant markets?

5.3.5 Give details of the most important cooperation agreements concluded by the applicant in the relevant markets, such as research and development, licensing, joint production, specialisation, distribution, long term supply and exchange of information agreements.

(153) Due to the provision in international parcel services requiring a local network both in the country

where the parcel originates from, as well as in the destination country of the parcel, cooperation

agreements are quite common.

6. Section 6 — Exposure to competition

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

According to Article 34(2) of Directive 2014/25/EU, the question of whether an activity is directly exposed to competition must be decided on the basis of criteria that are in conformity with provisions on competition of the TFEU, such as the characteristics of the goods or services concerned, the existence of alternative goods or services, the prices, and the actual or potential presence of more than one supplier of the goods or services in question.

6.1. Explain why you consider that the activity covered by this request is fully exposed to competition in the relevant product market on the relevant geographical market(s). In particular, give the following information:

(154) In summary, the applicant notes that the market for international parcel services is highly

competitive, with several market players on the market with similar market shares. While Eesti

Post remains (based on 2023) data, the largest market participant on the overall market for

international parcels in terms of volume, it has lost market share in terms of value and is no longer

the largest market participant. As such, it has nearly equivalent market shares with DPD and

TNT/Fedex, who are all large international parcel service providers and thus have an advantage

when compared to local and regional operators, such as Eesti Post, SmartPosti and Venipak. In

respect to Venipak, it is the understanding of the applicant that Venipak is planning to expand its

business to both in the Baltic States, but also expand its business in Poland, Germany and other

EU Member States. Thus, it could also soon be considered an international player. In response

to question 12 (b) of the European Commission’s RFI dated October 24, 2024, the applicant

further clarifies that Venipak has undertaken several strategic steps to expand its business across

Europe and enhance its service offerings to meet the growing demand for e-commerce logistics.

The following concrete actions demonstrate how the company has expanded its footprint in both

the Baltic region and beyond:

(n) Expansion Across the Baltics: In September 2023, Venipak completed its expansion

in the Baltics and extended its delivery network, connecting all three Baltic countries into

a joint network of over 600 parcel lockers, enhancing connectivity and service coverage.56

56 https://venipak.com/news/2023-09-11/venipak-completes-expansion-in-the-baltics-and-takes-on-europe/

37 (94)

(o) Strategic Acquistion: In May 2023, Venipak acquired a Dutch e-commerce wholesaler,

Strengholt Entertainment BV, gaining access to global platforms like Amazon and major

European retailers, thereby strengthening its position in e-commerce logistics.57

(p) Infrastructure Investment: In February 2023, Venipak opened its first e-fulfillment

warehouse in Poland, aiming to enhance service quality, strengthen its position in the

Baltics, and create new business opportunities in Europe.58

(155) Further, the presence of several equivalent competitors by itself is a strong indicator that the

market is open to competition and for customers and service providers, no single service provider

can be considered to have a must have product. Thus, all market participants are obliged to

compete with each other to the best of their ability.

(156) The only market segment where Eesti Post has the largest market presence in terms of value is

C2X (estimated 36% market share, 2023 data), however even on that segment, there are several

equivalent competitors, such as DPD and SmartPosti who are able to provide competition to Eesti

Post. Moreover, the market shares of other international players, such as DHL, TNT and UPS

have all been showing an increase (in contrast to the falling market share of Eesti Post).

(157) Further and in response to question 12 (a) of the European Commission’s RFI dated October 24,

2024, to clarify the advantage of DPD, TNT/FedEx, and similar global players in comparison to

Eesti Post, the applicant can highlight several key factors. Global players like DPD and

TNT/FedEx benefit from extensive international networks, giving them direct access to large

volumes of parcels from around the world. This enables them to offer more competitive rates,

faster delivery options, and a broader range of services. In contrast, Eesti Post, being more

regionally focused, may not have the same volume of international parcels, which can make it

harder to compete on speed, scale, and cost-efficiency. Furthermore, global operators can

negotiate better terms with suppliers, partners, and customers due to their large-scale operations.

They offer integrated services across multiple regions, including standard and express delivery,

which can attract larger customers who value the convenience of dealing with a single provider.

Eesti Post, as a smaller, local operator, may lack the leverage and broad geographic coverage to

compete effectively in both local and international markets. Additionally, global players typically

have far greater purchasing power when it comes to acquiring resources like parcel machines,

warehouses, IT systems, and software. They can optimize investments by deploying resources

across multiple countries and regions, achieving economies of scale that reduce costs. These

factors collectively create a competitive advantage for larger international players like DPD and

TNT/FedEx, allowing them to offer more competitive pricing, a wider service range, and more

consistent quality across multiple markets – advantages that are difficult for smaller, regional

players like Eesti Post to match without significant investment in infrastructure and resources.

(158) In conclusion, the provision of international parcel services in Estonia is not only open to

competition, but a market subject to strong competition between international and regional

players. This is also indicated from the market shares remaining dynamic, allowing for rapid

changes from year to year.

GENERAL CONDITIONS ON THE RELEVANT MARKET

6.1.1. Identify the five largest independent suppliers (21) to the applicant and their individual shares of the applicant's purchases (of raw materials or goods used to produce the relevant products).

57 https://venipak.com/news/2023-05-23/venipak-acquires-dutch-e-commerce-wholesaler-opening-up-avenuesto-

amazon-and-other-global-platforms-as-well-as-major-european-retailers/ 58 https://venipak.com/ee/en/news/2023-02-07/venipak-development-aims-to-facilitate-baltic-business-trade-

inpoland-and-remaining-europe/

38 (94)

Provide the name, address, telephone number, fax number and appropriate contact person, of these suppliers:

(159) The contact details of the five largest independent suppliers are as follows:

Name of the

supplier

Supply

sourced

from the

supplier

Share of

supplier

from the

applicant´s

purchases

(%)

Contact information

OY

MATKAHUOLTO

AB

Last mile

delivery 8%

Address: Kaivokatu 10A, 00101 Helsinki,

Finland

Phone: +358 40 182 7076

E-mail: [email protected]

Internet address:

https://www.matkahuolto.fi/en

RESTAN

PARTNER OÜ

Courier

services 7%

Address: Harju county, Saku parish,

Roobuka village, Soonurme tee 31,

Estonia 75516

Phone: +372 5599 7092

Email address: [email protected]

Internet address: N/A

RAIN TRANSPORT

AS Transport 6%

Address: Ravila 63b, Tartu city, Estonia

50411

Phone: +372 742 0805

Email: [email protected]

Internet address: https://rain.ee/

LUFTHANSA

CARGO AG Transport 7%

Address: Schutzenwall 1, D-22844

Norderstedt, Germany

Phone: +49 696 969 1181

Internet address: https://lufthansa-

cargo.com/

SCHENZHEN HIVE

BOX TECNOLOGY

CO LTD

Parcel

machines 4%

Address: 16F，Building2#, Yongxinhui,

Dongbin Road 4078,Shenzhen, China

Phone: +86 1382 7465 653

Email: [email protected]

Internet address:

http://www.fcbox.com/en/pc/index.html#/

SAKU AB AS Transport 4%

Address: Paneeli 2/1, Tallinn, Estonia 13816

Phone: +372 605 2370

Email: [email protected]

Internet address: www.sakuab.ee

39 (94)

Please also identify the undertakings affiliated to the applicant and their individual shares of the applicant's purchases (of raw materials or goods used to produce the relevant products). Provide the name, address, telephone number, fax number and appropriate contact person, of these undertakings.

(160) The applicant provides services for its Latvian and Lithuanian postal entities. In 2023, Eesti Post

remunerated Latvian and Lithuanian subsidiaries with a sum of 0.9 MEUR. At the same time,

Eesti Post paid its subsidiaries in Latvia and Lithuania approximately 14.4 MEUR for the delivery

of parcels (e.g. About You parcels, etc.).

STRUCTURE OF SUPPLY IN THE RELEVANT MARKETS

6.1.2. Describe the distribution channels and after-sales service networks that exist in the relevant markets. In doing so, take account of the following, where appropriate:

(a) the existing distribution systems and their importance in these markets. To what extent is

distribution performed by third parties or by undertakings affiliated to the applicant?

(161) The applicant explains that services are provided to customer directly through the relevant

networks. Third parties or undertakings affiliated to the applicant do not provide any such services.

(b) the existing after-sales service networks (for example, maintenance and repair) and their importance in these markets. To what extent are these services performed by third parties or by undertakings affiliated to the applicant?

(162) After-sales services are not relevant for the provision of parcel services.

6.1.3. Where appropriate, provide an estimate of the total EU-wide and EFTA-wide capacity for the last three years. During this period, what was the capacity of the applicant and what was the rate of its capacity utilisation?

(163) Outside of exceptional circumstances (e.g. COVID-19 and / or war), capacity concerns are

generally not relevant for the provision of parcel services within the EU or EFTA.

(164) The applicant notes that some capacity concerns may arise as a result of parcel machine

networks during increased shopping times - e.g. Christmas –, provided that customers do not pick

up their parcels in a timely manner. This, however, is generally not a problem for the provision of

services outside of those peak times.

6.1.3. Please indicate any other supply-side considerations you consider to be relevant.

(165) Supply in Estonia is supported by the presence of local parcel machine networks. Since parcel

machine networks are used for the provision of different postal services, market participants active

in those markets are able to easily enter the market for international parcel services as well.

STRUCTURE OF DEMAND IN THE RELEVANT MARKETS

6.1.5. Identify the five largest independent customers of the applicant in the relevant market and their individual shares of total sales of the relevant products by the applicant. Provide the name, address, telephone number, fax number and appropriate contact person, of each of these customers.

(166) The five largest independent customers of the applicant are indicated in the following table. For

clarification, the table does not include other postal operators (i.e. if, for example, customers send

parcels via Dutch Post, Dutch Post is not included in this table).

Name of the

customer

Share of

total sales of

the

Contact information

40 (94)

applicant

(%)

HANGZHOU

CAINIAO SUPPLY

CHAIN

MANAGEMENT

CO.,LTD. 11%

Address: Block B1,XiXi center, No.588 West

Wenyi Road, 310012, Xihu District,

Hangzhou, China

E-mail: [email protected]

Internet address: https://global.cainiao.com

UBSEND 8%

Address: Laplandsgade 4A, 2300

Copenhagen, Denmark

Phone: +45 41 48 38 38

Email: [email protected]

Internet address: https://ubsend.com

UKISI OÜ 9%

Address: Remmelga tn 6/1, Tallinn, 11216,

Estonia

Email: [email protected]

PEPI RER SIA 2%

Address: Parka iela 25, Valka, LV-4701, Latvia

Phone: +371 64707024

Email: [email protected]

Internet: https://www.pepirer.lv

FASHION RETAIL

S.A. 1%

Address: AVENIDA DE LA DIPUTACIÓN,

EDIFICIO INDITEX, 15143, Arteixio, Spain

Phone: 08005891603

Email: [email protected]

PACKETA

INTERNATIONAL

S.R.O 1%

Address: Zásilkovna s.r.o. Českomoravská

2408/1a, 190 00 Praha

Email: [email protected]

Internet: https://www.packeta.com

6.1.6. Explain the structure of demand in terms of:

(a) the different phases of the markets, for example, take-off, expansion, maturity and decline, and a forecast of the growth rate of demand;

(167) The applicant notes that the international parcel services market is in a growth phase, due to ever

increasing popularity of e-commerce and its related services.

(b) the importance of customer preferences, in terms of brand loyalty, product differentiation and the provision of a full range of products;

(168) The applicant notes that there are strong customer preferences on how parcel services are

provided (i.e. using the parcel machine network). However, since all main market participants

have parcel machine networks, they can all be considered substitutable from the perspective of

the customer.

(169) In relation to product differentiation and the provision of full range of products, the applicant notes

that Eesti Post as well as its main competitors all provide similar product, with very small

differences in the products in practise. The differences are a result of each of the market

participants trying to distinguish its offering from the competitors, which allows it to offer a slightly

41 (94)

different price. Overall, the product offerings are strongly influenced by the particular parcel

machine network that a market participant has. Eesti Post notes that brand loyalty is very low, if

present at all. In response to question 3 of the European Commission’s RFI dated October 24,

2024, the applicant further specifies that established companies may benefit from brand loyalty

and trust, but in Estonia, brand loyalty in the post sector is typically lower than in consumer-facing

sectors. Consumers are generally more willing to switch service providers for better service or

lower prices. However, incumbent players such as Eesti Post still may enjoy a degree of trust due

to their established reputation, but all in all the brand loyalty is very low.

(c) the degree of concentration or dispersion of demand;

(171) The applicant notes that demand is dispersed, since there is a large number of customers, with

no single customer making up more than 10 – 15 % (see table under recital (166) of the provision

of services by Eesti Post.

(d) segmentation of customers into different groups with a description of the ‘typical customer’ of each group;

(172) The applicant notes that while there can be potential distinctions made between business

customers and consumers, a segmentation into different customer groups is not warranted.

(e) the importance of exclusive distribution contracts and other types of long-term contracts;

(173) Exclusive distribution and other long-term contracts are not relevant for the provision of

international parcel services.

(f) the extent to which contracting authorities, State undertakings or similar bodies are important as a source of demand.

(174) The applicant notes that contracting authorities of other member states are important sources of

demand, since parcels originating from such entities make up an estimated 50% of all inbound

parcels. At the same time, however, the applicant explains that this share is decreasing, as Eesti

Post is at the same time entering into commercial contracts with postal operators.

(175) State undertakings or similar bodies, however, are not an important source of demand, i.e. at

least no different than a large corporation.

6.1.7. Provide estimates of the degree of consumer activity in terms of switching supplier and renegotiating contracts in the last five years. Also give the sources used for this and, where available, the necessary documents to confirm the estimates:

(176) The applicant explains that customers regularly change suppliers, thus the degree of switching

between suppliers can be considered high. This is also reflected in the relatively rapid change in

market shares year to year in all potential segments for international parcel services.

Section 5B – Domestic standard and express parcel services

5. Section 5 — Information concerning the relevant market and access to that market

This section must be completed irrespective of the reply to point 4.1 above.

Certain points may not be relevant for some activities or the factual situation of a given applicant — in such cases, please indicate so point by point.

The applicant may limit itself to giving a precise reference point by point to the relevant part(s) of a reasoned and substantiated position as referred to in Article 35 of Directive 2014/25/EU, adopted by an independent national authority that is competent in relation to the activity concerned, in which the point concerned is analysed.

5.1. Please give the reasons why you consider that access to the relevant market is not restricted.

42 (94)

Overview of services provided under the product market for international business parcel service

(177) The market for domestic standard and express parcel services consists of the same market

players as the international parcel service, with addition of Jet Express OÜ (“Jet Express”) and

Bullet Express OÜ (“Bullet Express”).

(178) Jet Express is primarily a transport logistics company, offering mainly services related to road

and air transport.

(179) Bullet Express offers international express courier and supply chain solutions with main

production conferences being international industries and companies. A large part of Bullet

Express's turnover comes from the export of services outside Estonia.

(180) The applicant explains that overall, the domestic standard and express parcel service market has

shown growth, thereby creating an incentive for new players to enter and existing players invest

into their business. In overall, the concentration of the market can be described as having several

strong players, such as Eesti Post, DPD and SmartPosti as well as several smaller undertakings.

(181) In response to question 13 (a) and (b) of the European Commission’s RFI dated October 24,

2024, the Estonian market for standard and express parcel services is highly competitive, with

numerous providers active in different segments. The exact number of competitors can vary

depending on the data source and the criteria used. According to the Estonian Statistical Office,

there were 430 enterprises in 2022 whose primary activities included postal and courier services,

such as the collection, transport, and delivery of letters, parcels, and other items. This includes a

broad range of providers, from local regional players to larger national and international

companies, not all of which may be active in the market:

Creditinfo data for 2023 indicates that 74 companies were involved in providing postal, parcel,

and courier services in Estonia, reflecting the fragmented nature of the market. The Estonian

Competition Authority's annual report for 2023 identifies 59 registered postal service providers in

Estonia. Among these, 48 companies are listed in the Register of Economic Activity as registered

courier service providers, offering a range of services, including both national and international

parcel delivery, as well as express and standard options. However, only 21 of these providers

were actively delivering courier services as of the end of 2023. These active courier service

providers include: Bolt Operations OÜ, AS Eesti Post, A-Kuller & Partnerid, AS Express Post, AS

DPD Eesti, OÜ EKLT, DHL Express Estonia AS, SmartPosti OÜ, FedEx Express Estonia AS, T

grupp OÜ, Autopost Terminal OÜ, Aberg Express OÜ, Euroxkuller OÜ, Venipak Eesti OÜ, DK

Logistics OÜ, Jet Express OÜ, OSC Transport OÜ, Balti Logistika AS, K Security OÜ,

43 (94)

FamLogistics OÜ, and Nova Post Estonia OÜ. These data sources confirm that the market for

standard and express parcel services in Estonia is characterized by a significant number of active

competitors, indicating a diverse competitive landscape where Eesti Post does not hold significant

market power compared to the many other players operating in the market.

(182) One notable competitor is Venipak, who has previously been active primarily on the express

parcel segment but has recently also entered into the standard parcel services segment and to

the extent that the applicant is aware plans to take further investments for rapid expansion.

Considering that the only market segment, where the applicant has an estimated market presence

of above 30% is standard parcel service, the aggressive entry of a new competitor (Venipak,

Unisend) as well as the presence of strong competitors (DPD, SmartPosti), is a strong indication

that despite the market presence of above 30%, the market is open to competition and new

undertakings can enter the segment.

(183) Applicant’s estimated data of 2024 has showcased that there have been multiple newcomers to

the standard and express parcel services as of now. Newcomers Unisend and OÜ Udrop EE59

are both new to the market but have extensively expanded. As stated in recital (110), Unisend

has 145 parcel machines across Estonia and over 750 throughout the Baltics, while Udrop has

59 parcel machines across Estonia and over 180 throughout the Baltics.

(184) Thus, in summary the applicant considers that access to the relevant market for domestic and

standard express parcel services is not restricted.

5.2. For each relevant market, for each of the last three financial years (15), and for each of the following territories:

(a) the EEA territory;

(b) the EU as a whole;

(c) the territory of the EFTA States as a whole;

(d) each Member State and each EFTA State where the applicant carries out an activity; and

(e) the relevant geographical market (16), if the applicant considers that this market is different

Please provide the information referred to in points 5.2.1 to 5.2.9

5.2.1. an estimate of the total size of the market in terms of sales value (in Euro) and volume (units) (17), indicating the basis for the calculations and sources used and providing documents, where available, to confirm these calculations;

5.2.2. the sales in value and volume, as well as an estimate of the market share held by the applicant;

5.2.3. an estimate of the market share in value (and, where appropriate, volume) of all competitors (including importers) having at least 10 % of the geographical market under consideration. Provide documents, where available, to confirm the calculation of these market shares and provide the name, address, telephone number, fax number and appropriate contact person, of these competitors;

(185) As noted under section 1.1.3 of this exemption request, standard parcel services are composed

of services using a parcel machine for final delivery and express services as services using

courier services for final delivery. Eesti Post is active in both potential segments, however notes

that while some differences exist between standard and express services, this distinction is small

59 Webpage of OÜ Udrop EE (''Udrop''): https://udrop.ee/en/

44 (94)

and is decreasing over time, the key factors include as stated in response to question 4 of the

European Commission’s RFI dated October 24, 2024:60

(a) Market Trends: The increasing preference for parcel machines among consumers suggests

that the operational and cost differences between standard and express services are

diminishing. For example, some market participants previously only active in express parcel

services (e.g. Veinpak) have started to also enter the standard parcel services market.

(b) New entrants: The entry of new market participants that offer both types of services indicates

a trend towards businesses providing a more unified service.

(c) Consumer Expectations: As customers place a higher value on speed and convenience,

strict classifications based on delivery speed becomes less relevant. Previously, the main

distinction between standard and express services was their speed, however, this boundary

has now blurred in Estonia as the delivery times for both standard and express services are

similar.

According to the applicant, both demand-side and supply-side factors support the argument

that the traditional distinctions between standard and express services are becoming less

significant in the Estonian market context. Consequently, leaving the final product market

definition open is justified.

(186) Further and for clarity, to some extent, express services by Eesti Post have been provided either

directly or recently also in cooperation with delivery platform providers (in particular Bolt61 or Wolt)

over recent years, as part of a pilot project, where the final delivery of the parcel is left to

independent service providers operating under the platform provided by Bolt or Wolt. The

standard services have been provided through parcel machines, located in population centers, in

particular close to or inside shopping malls, shops or similar facilities.62

(187) In response to question 14 (a) of the European Commission’s RFI dated October 24, 2024

regarding the differences between standard and express delivery services, the applicant further

reiterates that the delivery method is one of the key differences between standard and express

delivery services. Standard parcel services typically use parcel machines for final delivery,

whereas express services rely on courier services. However, this difference is becoming less

noticeable over time, as many consumers in Estonia prefer the convenience of parcel machines,

leading some providers previously focused solely on express services to also enter the standard

services market. Additionally, both delivery methods can achieve similar timeframes, such as

same-day or next-day delivery, effectively making the quality of service more comparable from

the customer’s perspective. Furthermore, customers often see these services as interchangeable,

with many opting for delivery to parcel machines instead of direct courier service, particularly

when convenience is a factor.

(188) As noted also in the context for the market for international parcel services, parcel machines are

highly popular in Estonia (as well as the Baltics), since they allow for non-contact delivery and

flexibility regarding when the parcel arrives at the customer. Depending on where the parcel is

handed over to Eesti Post, either same day or T+1 delivery is possible both via courier as well as

via parcel machines. This means that there is essentially no difference in the quality of parcel

60 Regarding the argument that the differences between standard and express services are small and diminishing,

please refer to the applicant’s response to question 4 of the European Commission’s RFI dated October 24, 2024. 61 See https://bolt.eu/en/cities/tallinn/ for more information. 62 In response to question 14 (b), (c) and (d) of the European Commission’s RFI dated October 24, 2024, the

applicant notes that the pilot project between Eesti Post and Wolt was a short-lived pilot test, rather than a formalized

agreement or strategic cooperation. The test was not a continuation, and it was not designed to be a long-term

partnership.

45 (94)

service and express service for the end-customer (in both the B2X and C2X business segments),

and the customer receives the parcel in a relatively similar timeframe.63 In response to question

15 (b) of the European Commission’s RFI dated October 24, 2024, the applicant clarifies that

internal data from Eesti Post, as illustrated in the attached chart, below, shows that the majority

of parcels in Estonia, Latvia, and Lithuania are delivered within the same timeframe, typically on

the same or first day after dispatch. Specifically, when using parcel machines, approximately 95%

of packages are delivered the same or next day in Estonia. In contrast, for courier services, the

percentage of the same or next-day deliveries is about 14% lower. While it is traditionally

understood that express services (i.e. courier services) are faster and more reliable than standard

parcel services (i.e. parcel machine services), Eesti Post’s data suggests that, in practice, the

delivery performance of express and standard services is more comparable than commonly

perceived. Specifically, Eesti Post's internal data reveals that parcel machines demonstrate

higher reliability and efficiency compared to couriers.

For further clarification, regarding the B2X and C2X segments, Eesti Post does not possess

specific data that differentiates the delivery speeds between these two segments. However, the

underlying infrastructure supporting both B2X and C2X services in Estonia is largely identical.

Both segments rely predominantly on the same network of parcel machines. Consequently,

parcels in both the B2X and C2X segments are delivered to similar collection points (i.e., parcel

machines), and the delivery timelines are generally aligned. In the light of the above, while

express services may traditionally be viewed as faster than standard services, Eesti Post’s

internal data suggests that delivery times are generally comparable. Similarly, the infrastructure

and operational processes supporting both B2X and C2X deliveries result in similar delivery

timeframes for customers in both segments. Accordingly, the applicant believes that the

63 In response to question 15 (a) of the Commission’s RFI dated October 24, 2024, please note that when referring

to “parcel service,” the applicant is discussing standard parcel delivery services. The statement highlights that both

standard and express delivery options offer comparable quality and delivery times for the end-customer. In the

context of the Estonian market, both services can provide same-day or next-day delivery, leading to a similar

experience for customers in both B2X and C2X segments.

46 (94)

Commission's previous practice of distinguishing between standard and express services is not

applicable in Estonia. Specifically, the factors the Commission has relied upon to differentiate

between these services – mainly that express services are generally faster and more reliable than

standard services – are not relevant in the context of the points raised above. Therefore, it is not

possible to draw the same conclusions for Estonia based on the Commission's past approach.

(189) In light of the above, customers consider the services as alternatives and interchangeable, and it

is common that courier services are diverted in favour of delivery to parcel machines by request

of the final customer (where this is possible). This can happen most often when it is inconvenient

for the customer to receive the parcel directly from the courier. Moreover, in practice, courier

services in Estonia are provided in a manner that it is not possible for the addressee to choose

the exact time at which the addressee can receive the parcel, for example at the addressee’s

home or office. In practice, this means that if the courier fails to deliver the package to the

addressee at certain time, the courier offers the possibility to deliver the parcel to the nearest

parcel machine for the addressee, which further demonstrates that in terms of quality of content,

parcel service and express service are interchangeable for the consumer.

(190) Furthermore, in response to question 15 (c) of the European Commission’s RFI dated October

24, 2024, regarding the differences in the infrastructure for the different stages of the delivery

chain for C2X an B2X, the applicant explains that the infrastructure for C2X and B2X parcel

delivery services is largely the same in Estonia. Both segments primarily use parcel machines for

deliveries, with 25% of C2C deliveries and 14% of B2B deliveries being directly handled by

couriers. Parcels are centrally sorted and share the same linehaul network for transportation,

meaning there is no significant infrastructure difference between C2X and B2X in terms of delivery

handling. The main difference arises in B2B services, where goods are often directed to parcel

machines, though they still use the same core infrastructure. Unlike B2C, B2B logistics are

primarily managed by courier services and involve the transportation of heavier and bulkier items.

Regarding the collection flow, there is a slight difference in how parcels are collected for the two

segments. For C2X deliveries, most parcels are collected from parcel machines, which are

accessible to private customers, while B2X collections typically involve couriers or direct injection

of parcels into sorting facilities. However, it is important to note that the resources involved in the

collection process are not separated, the same couriers generally handle both C2X and B2X

collections. Couriers may collect parcels from parcel machines for C2X customers or directly from

business customers for B2X services, further highlighting the lack of distinct infrastructure for

these segments. Overall, while there are minor differences in service processes, the infrastructure

supporting parcel delivery for both C2X and B2X segments is largely the same, relying on the

same sorting facilities, linehauls, and couriers, with distinctions mainly arising from the type of

collection method used (parcel machines for C2X vs. couriers/direct injection for B2X). Therefore,

the applicant believes that the infrastructure used to serve these segments does not support the

view that they must be considered distinct in terms of the delivery network.

(191) Since the market for domestic parcel services is national in scope, as explained under recitals

(64) – (65) above, the size of the market as defined by EEA territory or EU as a whole is not

relevant for the assessment of direct exposure to competition. Consequently, the applicant

requests the Commission to waive the requirement stipulated under section 5 points (a) – (c) to

provide data for the relevant market for each of the last three financial years.

(192) In respect to section 5.2 points (d) – (e), the applicant notes the product market should be

considered national in scope and the services are not provided in any EFTA state.

(193) For ease of data interpretation, the applicant has provided information requested under points

5.2–1 - 5.2.3 in a single table, segmenting the information based on value and volume.

(194) The applicant has provided market data for the total market for domestic parcel services in tables

9 – 22, along with a potential segmentation based on express and standard parcels services.

47 (94)

(195) In respect to the market data, the applicant notes that public data is not fully available, thus the

applicant notes that the market data is the best estimate of the applicant and may not reflect

actual market shares.

(196) For estimating the market share based on value, the applicant has access to its own internal data

and has provided estimates for the market shares of its competitors. The market share of its

competitors has been derived from their annual reports.

(197) For the calculation of domestic parcel services in terms of volume (Table 12), Eesti Post only has

access to its own volume data. For the purpose of calculating the assumed share of other

competitors' volumes, it is assumed that the market share of the competitors is the same as their

market share in terms of value. This approach is also supported by the fact that the price levels

of the competitors are relatively similar. In this way, the total assumed market volume has also

been derived.

(198) In respect to the split between express and standard parcel services, the applicant has available

the internal data from Eesti Post. In respect to the market shares of competitors of Eesti Post, the

applicant has provided data based on its best estimates, taking into account the business model

and focus of each particular competitors. E.g. it is estimated that SmartPosti Estonia has a similar

split to Eesti Post between standard and express parcel services, due to its ownership relation to

the Finnish incumbent postal operator. In respect to other competitors, such as DPD (also DHL,

who is currently not covered in the market data, due to lack of any reliable market data), due to a

stronger international influence, there has been a stronger preference for express parcel services,

which is reflected in their market shares as well.

(199) Lastly, the market data included both domestic and inbound statistics. It does not include revenue

or value estimates for outgoing parcels, since such parcels are part of the market for international

parcel services (see Section 5A of this application).

(200) For clarity, the market data below is for the following segmentations:

(a) Total market combining standard and express services (tables 9-10);

(b) Standard parcel services (tables 11-12);

(c) B2X standard parcel services (tables 13-14);

(d) C2X standard parcel services (tables 15-16);

(e) Express parcel services (tables 17-18);

(f) B2X express parcel services (tables 19-20);

(g) C2X express parcel services (tables 21-22).

Table 9 Standard and express services (value)

2021 2022 2023

Value (EUR) Market share (%)

Value (EUR) Market share (%)

Volume (units)

Value (EUR)

Eesti Post 28 972 815 24% 28 353 331 23% 24 671 652 21%

DPD 19 642 923 16% 21 282 836 18% 22 045 611 19%

SmartPosti 16 036 816 13% 16 835 665 14% 17 622 798 15%

Venipak 11 365 792 9% 12 696 591 11% 13 040 272 11%

Jet Express 6 564 403 5% 7 804 304 6% 8 061 846 7%

Bullet Express 6 299 081 5% 2 158 594 2% 2 143 540 2%

DHL - - - - 140 000 0,1%

48 (94)

EKLT/UPS - - - - 300 000 0,3%

Other 31 255 415 26% 31 567 969 26% 30 989 150 26%

Total market 120 137 245 100% 120 699 290 100% 119 014 868 100%

Table 10 Standard and express services (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Volume (units)

Eesti Post 8 794 685 24% 9 285 441 23% 8 763 878 21%

DPD 6 229 569 17% 7 118 680 18% 8 136 275 19%

SmartPosti 5 130 233 14% 5 631 191 14% 5 947 744 14%

Venipak 3 298 007 9% 4 246 754 11% 3 986 590 9%

Jet Express 1 832 226 5% 2 610 383 6% 3 287 588 8%

Bullet Express 1 832 226 5% 722 006 2% 824 460 2%

DHL - - - - 56 189 0,1%

EKLT/UPS - - - - 62 500 0,1%

Other 9 527 575 26% 10 558 850 26% 11 373 457 27%

Total market 36 644 521 100% 40 173 305 100% 42 438 681 100%

Table 11 Standard parcel services (value)

2021 2022 2023

Value (EUR)

Market share (%)

Value (EUR)

Market share (%)

Volume (units)

Value (EUR)

Eesti Post 20 614 809 48% 20 140 998 44% 17 178 963 40%

DPD 8 839 315 21% 10 641 418 24% 11 053 028 26%

SmartPosti 11 410 555 27% 11 959 339 26% 12 585 553 29%

Venipak 1 704 869 4% 2 539 318 6% 1 933 567 4%

DHL - - - - 140 000 0%

EKLT/UPS - - - - 300 000 1%

Total market 42 569 548 100% 45 281 073 100% 43 191 112 100%

Table 12 Standard parcel services (volume)

2021 2022 2023

Volume (units)

Market share (%)

Volume (units)

Market share (%)

Volume (units)

Volume (units)

Eesti Post 7 527 993 49% 7 953 246 46% 7 425 096 44%

DPD 2 180 349 14% 2 491 538 14% 2 590 927 15%

SmartPosti 4 391 329 28% 4 823 276 28% 5 082 007 30%

Venipak 1 319 203 9% 2 123 377 12% 1 616 848 10%

Jet Express - - - - 56 189 0%

Total market 15 418 874 100% 17 391 437 100% 16 833 567 100%

49 (94)

Table 13 Standard parcel services B2X (value)

2021 2022 2023

Value (EUR) Market share (%)

Value (EUR) Market share (%)