The very concept of on-demand delivery has been ingrained as part of everyday life, a convenient last mile solution that accompanies so many industries; from ecommerce to food delivery.
In Thailand, food delivery alone is a staggering industry. According to Kasikorn Research, up to 68 million orders were made in 2020 alone. The ecommerce industry in Thailand is projected to be worth US$26.2 billion, according to JP Morgan.
The more demand there is for goods and ecommerce, the bigger delivery players become.
The last mile landscape is packed with healthy competition from both regional and local players. One player, though, has maintained a strong hold across Asia and is recognizable from the flashes of orange zooming up and down the busy streets of Bangkok.
We sat down with Ravi Sethi, Country Managing Director of Lalamove Thailand to discuss all things from the pandemic acceleration to consumer demands.
“We want to be synonymous with delivery,” says Ravi. “We are here to help businesses deliver.”
The Executive Background
Ravi’s own career began in Canada, in the oil & gas manufacturing industry.
“This [the Oil and Gas manufacturing company in Vancouver, Canada] was my first job where I got to learn about logistics and operations,” he says. “Later, I moved back to Thailand to join an international bank, where I gained exposure in finance and the tech industry,”
After accumulating experience in logistics finance and tech, Ravi dived into running a grocery delivery platform in Bangkok. The opportunity led to Ravi deciding to join Lalamove.
“I was monitoring the digital penetration rate in Thailand. I saw the demand for logistics growing as it was a complementing service to the growth of e-commerce. With multiple industries digitizing their processes, I decided it was the perfect time to jump in and grow the business with Lalamove.”
From Hong Kong Beginnings to Global Logistics Powerhouse
Lalamove launched back in 2013 with headquarters in Hong Kong. The business focused on on-demand and same day delivery. Fast forward to 2021, the company currently operates in over 20 markets across Asia, Latin America and has also expanded to the US with a network of over 7 million users.
“Our focus now is to expand on our core competency. In doing so, we have expanded our geographic service areas to accommodate various types of businesses in different regions. We are also offering more vehicle types on our platform to accommodate larger products or goods,” says Ravi.
Lalamove currently offers a wide range of services and vehicles; from motorbikes to pickup trucks for furniture, electronics and whatnot. The company serves both B2C and B2B customers, which means it offers customized solutions across the entire landscape.
“We have served a range of industries, from partnering with healthcare startups to deliver on-demand medical instruments to providing delivery service for bulky electronic devices.”
The Pandemic Effect: The Era Of Mask Mandates and Social Distancing
The company’s adaptability and problem solving enabled Lalamove to grow as its B2B and B2C’s diversified demands grew.
Ravi speaks about the pandemic and refers to the impact of Covid forcing businesses into “another realm”. What this means is that financial resources have become a major constraint for many businesses, and it’s the time for these businesses to focus on their unique selling attributes or products.
“We help businesses trim down the managerial costs of owning a fleet. Businesses won’t have to worry about spending on vehicles, employing drivers or training. We are a reliable alternative to huge cost investments, allowing businesses to focus on their core competencies instead.”
“When Covid-19 first hit, our immediate response was to implement hygiene rules for our drivers,” says Ravi. “Drivers have close contact with our customers, so we had to constantly educate our drivers on social distancing, wearing masks and cleaning of delivery boxes.”
As you can imagine, the pandemic effect meant a spike in deliveries and demand as people settled into their work from home routines and online shopping.
This also meant that Lalamove anticipated behavioral changes from its customers too.
“We introduced promotions for contactless payment options, where customers can top up money into their wallets to minimize cash handling, therefore reducing the risk of the virus transmission”
The Post-Pandemic Behavioral Shift: Spearheading Rapid Digitization
“Covid-19 really accelerated the change that was already happening,” says Ravi.”It forced a lot of businesses to be hyper aware of digitization.”
Logistics is a complementary industry, it goes side by side with the adoption of ecommerce.
Ravi stresses that businesses have to adapt to change in order to remain competitive.
“Digitization allows companies to access a larger market, and if you don’t digitize, you are losing out.”
It has been said repeatedly that digitization is no longer a choice, it’s a must because the ecosystem is operating that way. It has also become cost efficient for companies to implement digital tools.
Having said that, digitization for the sake of it also wouldn’t work. In today’s landscape, data driven decisions are what drives growth and sales. Depending on your product or service type, customer behavior will act as a litmus test to how you adapt and change.
“There has actually been proof that cart abandonment rate can increase by 49% due to a mismatch between delivery date expectations and the actual delivery date,” he says. “You have to cover all the bases and tailor each option to fit the product.”
In this case, logistics players know to offer same day deliveries and in turn, brands know to streamline their products and services to quickly meet consumer preferences of a fast and timely delivery.
“It’s all about instant gratification these days. A few years ago, people were happy to wait a couple weeks for their deliveries. That is not the case today. Consumers want to receive their products fast and reliably. ” says Ravi.
Logistics is Tied to Everything
We also spent some time talking about Thailand’s business outlook and growth, and about which trend Ravi himself finds relevant going forward.
As we see the entire digital movement accelerating, the logistics space is expected to grow. For example, platforms are adopting more flexible payment options, such as buy now pay later programmes. These are expected to stimulate ecommerce growth. This growth will be complemented by the integral service of delivery.
The future of logistics is essentially tied to digitizing, consumption behavior and innovations. As the ecosystem flourishes, the delivery sector automatically sees a win.