Amazon's own delivery service will more than halve the growth potential for Royal Mail's parcels business, the former state-owned British company said on Wednesday, sending its shares lower.

Parcels make up half of Royal Mail's turnover and online shopping has made them central to the company's prospects.

However, competition from the likes of TNT and a new delivery service from Amazon, which was Royal Mail's biggest customer, has hampered the company's progress and revenues.