FOR some years the fulfilment industry – the online sale of goods coupled with distribution by post – has been an important part of the Jersey economy.

It has also been a considerable boon to Jersey Post, which has seen traditional postal services hard hit by electronic communication.

However, both the fulfilment sector and Jersey Post will be asking serious questions about the future. They will already have been aware that the declining popularity of some fulfilment products, such as CDs, is in sharp decline, but the news that Play.com, one of the sector’s major businesses, has been sold amounts to another dark cloud on the horizon.

Rakuten, the Japanese retail giant which has acquired Play.com for the relatively low price of £25 million, has not ruled out moving their new acquisition to some other jurisdiction.

If they were to do so, contributions to the Island’s exchequer and to the general economy would clearly be lost. A move would also mean a highly significant and damaging loss of business for Jersey Post.

And there is a further problem in the offing for our present postal service. From the beginning of next year two other organisations will be able to compete for fulfilment business.

There is, of course, another important dimension to the problems which could well emerge as a result of the sale of Play.com. If its operations do indeed move elsewhere, jobs will be lost.

The Jersey packing and dispatch operation currently operates around the clock, providing much-needed employment at a time of record levels of unemployment.
Meanwhile, it has long been clear that the UK government is concerned about the impact of the offshore fulfilment industry on its tax revenues.

In last year’s budget, the threshold for VAT-free imports was reduced and it is entirely possible that further steps will be taken that further undermine the viability of fulfilment.

That said, even if the outlook for the sector is less than favourable, it would be wrong to say – as some claim – that Jersey should have had nothing to do with this particular string to the economic bow.

As matters stand, fulfilment continues to make a valuable contribution and the benefits it has already brought should not be minimised or scorned.