HK-based Lalamove’s entry into Malaysia’s delivery market welcomed by competitors
By Chong Jinn Xiung August 13, 2018
- Ganesh Kumar Bangah, Mohd Izzairi Yamin feel on-demand market will grow due to competition
- Lalamove aims to add vans and trucks to its delivery platform to serve needs of different users
THE latest on-demand logistics service provider to enter the Malaysian market, well funded Hong Kong based Lalamove, aims to provide same-day deliveries in the Klang Valley – in under an hour. It has raised a total of US$161.5 million (RM659 million) since it started in Hong Kong in Dec 2013 when it was called EasyVan. Its latest Series C round in Oct 2017 attracted US$100 million in funding.
It has been operating in Kuala Lumpur since June 2018 with a mobile app, and soon to be launched web app, that acts as an integrated delivery platform that matches customers, which are mainly business, with its network of drivers.
Lalamove’s country director Yong Sik Hoe says it aims to address the pain point of businesses that feel limited by short cut off times and 4-6 hour delivery windows by traditional logistics providers and the hassle of having to manage their own internal fleet of drivers.
After a month of testing its services in Kuala Lumpur, it claims to have achieved deliveries under 36 minutes within 5km or less and with an average of 50 minutes for deliveries within 10km.
“Local deliveries can be achieved within an hour. At the same time, this allows businesses to scale rapidly without being constrained by the overhead and operational cost of a delivery fleet, allowing to focus on their core business,” Yong says.
That’s not to say that Lalamove has its own fleet of vehicles. Essentially a technology company, it owns no delivery assets, rather using its software to match market demand with owners of vehicles.
If you think the lightly funded local players, who also offer same day and even 1-hour delivery services are fazed by Lalamoves market entry think again.
Serial entrepreneur Ganesh Kumar Bangah, whose latest venture is Commerce.Asia Ventures (Commerce.Asia), a commerce technology venture builder says its entry will boost the e-commerce space by helping grow the industry.
Ganesh brushes asides fears that local players will not be able to compete with the pricing the well funded Lalamove can offer. It charges business based on distance travelled, not weight, with prices starting as low as RM5 for an immediate delivery.
“If you look in any on-demand logistics market that serves businesses, there will always end up being two to three players leading the market as merchants always want alternative choices for their deliveries”
Ganesh has a stake in Thai-based delivery platform, Shippop’s Malaysian operations that began in Oct 2017 in Malaysia.
Also echoing Ganesh’s opinion is Mohd Izzairi Yamin (pix, right), founder and CEO of ZeptoExpress. “I would like to welcome Lalalmove into the delivery scene in Malaysia. More players are needed in order to solve delivery issues mainly in high density areas such as Kuala Lumpur, Selangor, Penang, and Johor Bahru.”
Izzairi is not intimidated by Lalamove’s war chest as well. “I don't see any problem with Lalamove coming into this space even if they are cash rich. If you take a look at the market share for couriers (reported by Malaysian Communications and Multimedia Commission), no one is holding more than 20% of the total market size,” he points out.
The significance of this is that observers had assumed that the global players such as DHL, Fedex or UPS would eat up the entire market share. “Yet this did not take place. Delivery services cannot be dominated by a single party as delivery is not the same as ride hailing, it's more about leveraging on each other in order to settle your everyday backlogs.”
ZeptoExpress itself has expanded its services and is now offering on-demand delivery and next-day delivery services together with warehousing services that includes, storage, pick & pack, kitting and delivery.
Meanwhile Lalamove has aggressively expanded over the past five years to eight countries. This includes markets like Hong Kong, Singapore, Thailand, the Philippines, Vietnam, Indonesia and Taiwan. In China it serves over 100 cities.
Its platform is built with real-time GPS tracking so businesses can track the status of their packages. The service also operates 24/7. Users are able to rate drivers and even “save” preferred drivers to have them perform jobs again for them.
“On average, we have received 300 orders delivered per day. We are now supporting more than 200 small medium enterprises with over 1,800 registered drivers in Kuala Lumpur,” says Yong.
Currently serving the Klang Valley, Yong expects to expand Lalamove’s reach to Penang and Johor in the next nine to 12 months.
Though it currently conducts deliveries using cars and motorcycles, Lalamove aims to add vans and trucks to its delivery fleet to serve the needs of different users.