Learn Three Lessons from Lalamove Expansion to Master Logistics in Southeast Asia

Industry E-commerce in Southeast Asia has grown so rapidly with the transaction rate that always doubles every year. Innovations on various sides are carried out in order to increase customer satisfaction, as well as for efficiency.

On the one hand, the innovations the logistics industry has not been able to match. Even though this industry is one of the supporting ecosystems E-commerce with a vital role because it is fully related to the element of efficiency.

Lalamove took this opportunity by making himself on demand logistics, elevating technology as DNA. As a result, positioning Lalamove for corporate partners who want to prioritize speed of service to consumers without having to invest in segments they do not understand.

In a brief discussion at the Echelon Asia Summit 2019 at the end of last month, Lalamove's Managing Director of International Blake Larson explained the various things that can be learned through its expansion in Southeast Asia. How companies bridge all the fragmented needs in each country.

"We really want to empower local businesses that they have mastered. Lalamove becomes a partner when they want to develop their business. So during peak season, partners don't have sufficient fleets, we can help," explained Larson.

Lalamove has a trained fleet that can help partners arrange and make deliveries according to their needs in various modes. Larson said the company was founded in 2013 in Hong Kong. Then expand to various countries such as Thailand, Vietnam, Philippines, Malaysia, Singapore, Taiwan, Cebu, India, and China.

In Indonesia, Lalamove just inaugurated its presence at the end of last year. In total, Lalamove is present in more than 150 cities in Asia Pacific, with a total fleet of more than 2 million and 15 million registered customers. The company has the status unicorn thanks to the US$300 million Series D funding received earlier this year.

Technology as company DNA

Lalamove distinguishes itself from logistics companies in general because it fully uses technology. Larson explained that as a company with rapid growth, one of the challenges faced was to ensure that the demand side of the fleet was always met as the number of customers grew.

At the same time, it also ensures how Lalamove can continue to provide the best experience for its users and drivers. Therefore, enterprises rely heavily on data to integrate it via APIs.

He gave an example, based on variations in the route taken by the driver, the company could provide recommendations for the best route for the fastest delivery. Or recommend the right driver if there are special needs from partners.

"Technology allows us to deliver experiences seamless pattern and fully automated, users and drivers can send and receive convenient delivery requests, know exactly how much it will cost and pay for it through various payment options."

This issue occurs in India. When doing research in the field, it turns out that the logistics competition there is very high because there are no drivers who specifically serve a company. They gathered and waited for the order to arrive. If there is only one, they can fight each other. So it could be that a driver does not get an order at all for days.

Human touch is always needed and most important

Larson stressed that companies always need a human touch, even though the company's DNA is technology based. This human touch has a full impact on user retention and the driver itself.

"While technology helps us improve operational and business efficiencies, the human touch is still important when it comes to improving the user experience."

Online experience either via API, application or otherwise only has a share of 10%. While the remaining 90% offline lies on the driver and user side. This has resulted in quite a contrast from the innovation side, companies are using a branding approach by sticking lots of stickers on their fleets.

This strategy is considered more effective because it can capture the targeted consumers, rather than advertising on online sites. This strategy was carried out by the company to develop its business in China. It is said that there are more than 400 thousand fleets that have installed Lalamove stickers.

Regret choosing Singapore over Indonesia

Larson was asked what regrets he hoped to fix for Lalamove, interestingly he replied that he regretted choosing Singapore over Indonesia as his second expansion country.

At its inception, the company attempted to expand rapidly. However, the choice of country is due to competitors with the same business model targeting these countries.

"We went to Singapore as a second country. I hope [should have] been to Indonesia five years ago, not Singapore because here there is nothing [problem]. It's like a country with the largest market share versus the small one."

However, of all the countries that Lalamove has now entered, Manila is the most profitable city. The growth there is many times faster than other cities, even though the company claims to have made a profit than in Singapore.

Other achievements, such as in Bangkok, Lalamove became a leading player for food courier delivery. From this achievement, the company has many restaurant partners who rely on the Lalamove fleet to send orders to consumers.

Sebagai unicorn, lalamove certainly have a greater opportunity for a monopoly on the Southeast Asian market. But Larson prefers to provide more choices for consumers. The key to winning the market here is not a price war to provide the cheapest price, but by providing quality.

"The key is to provide competitive prices and add a lot value. For business owners, it's not just about being reliable, transparent and secure. We provide a team that is specifically dedicated to them."

Moreover, in the logistics industry there are many types of shipping available and complex. Which not all types must be mastered by Lalamove. Just like shipping food, the handling is different from sending furniture. Monopoly, according to him, makes the market unhealthy because consumers don't have many choices to compare.