Cyberspace is a great place to find hot startups, but most business done in the virtual world has to lead eventually to somebody getting something in the real world. Across Southeast Asia, these delivery systems are fragmented, as countless independent operators and small trucking firms scramble to get things to where they’re needed. In response, a number of tech-based entrants such as GHN and Ninja Van—to name two of our favorites—are stepping in with solutions.
GHN (Giao Hàng Nhahn or “Fast Delivery”) has tackled the task in Vietnam, where logistics costs are estimated at over 20% of GDP. Founded in 2012, the firm connects with e-commerce platforms such as Lazada and Shopee—as well as with local, physical retailers and grocery stores—to get the goods to buyers. The market boasts plenty of upside, as busy Vietnamese increasingly prefer to tap their mobiles rather than burn time shopping, and GHN is growing to match demand.
Over 7,000 drivers, about 40% freelance, pilot vehicles and motorbikes for GHN. They serve three major metro areas, Hanoi, Da Nang, and Ho Chi Minh City, and offer trucking across Vietnam’s 63 provinces. GHN’s technology backbone provides fast coordination—target delivery time within a metro is two hours max—while keeping costs low.
Logivan is another new Vietnamese entrant with a different business model. According to founder Louise Linh Pham, the real “hole” in Vietnam’s logistics market can be found inside the trucks: about 70% come back empty after completing a run. So the Cambridge-educated serial entrepreneur has focused her attention on load optimization, matching shippers of freight with independent truckers who have space.
Her company is off to a promising start. Logivan raised $600,000 in seed funding from Insignia Venture Partners early this year, then $1.75 million in Series A funding in August.
Asset-Light and Outward Bound
Logivan is part of Southeast Asia’s new breed of asset-light logistics firms, which have few physical assets, such as vehicles and warehouses. They earn their keep primarily via tech-enabled facilitating of cargo flows for others.
The gorilla in the room, China-based Manbang, leads the load-matching and truck-hailing sector in its own backyard. Already backed by Tencent and Baidu, Manbang raised another $1.9 billion this year in a round led by Softbank and others; the firm may now look to use that cash injection to expand outside China.
Meanwhile, many similar players have sprung up in other Southeast Asian markets. Giztix, in Thailand, matches full-service trucking companies (not just independent truckers) with shippers, and deals almost solely in B2B transporting. Recently, Giztix has managed to average 30% month-on-month growth, demonstrating a clear demand for its services.
Another market that holds great potential for the asset-light firms is cross-border transportation. The core ASEAN region consists of 10 separate countries, with India and China nearby. Demand is increasing for transnational movement of cargo, both by land and sea—and 3PL (third-party logistics) companies whose main asset is software can add efficiencies to the picture while scaling easily, at minimal risk.
Don’t Sell the Short-Haul Companies Short
On the short-haul side of the spectrum, last-mile delivery is another fertile niche. Lalamove and GoGoVan, two firms highlighted in Forbes last year, have their roots in Hong Kong and are expanding into major Southeast Asian metros. Each hires van and truck drivers on an Uber-style basis, with dispatching by mobile apps. Rapid B2C delivery of small items is a specialty and a host of other services are offered, from B2B transport (including courier service) to pet transport to rent-a-truck.
But the most exciting last-mile player right now is Singapore-based Ninja Van. Founded in 2014 with a focus on delivering e-commerce purchases, the company has a tech platform honed to that purpose and well-woven strategic links with online merchants and other partners. Ninja Van relies on drivers with their own vehicles, but will add physical assets as needed. Funding has been ample—a Series C round closed in January at $87 million—and Ninja Van is expanding. Markets now range from Bangkok to Manila, plus growing coverage of urbanized areas in Malaysia and, notably, Indonesia.
Indonesia is the largest ASEAN nation, with sprawling island land masses and a population over 260 million. Any 3PL firm that can lock up the Indonesian market alone, or take a sizable chunk of it, would be very well positioned going forward.
And “going forward” is where we see logistics startups headed generally, throughout Southeast Asia. Countries here have the demand, the tech talent, and plenty of drivers willing to work within a sharing-economy model. Add the fact that these are frontier economies—open to innovation, with few old-line legacy companies or systems bogging things down—and there’s a clear recipe for growth.