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April 24, 2024 11:44

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It's better to go out to sea than to be caught up in internal competition.

This article is authorized to be reprinted from: Chuangyebang

Author: Zhao Youbang

In early April, Huolala (listed company Lala Technology) once again submitted an updated prospectus to the Hong Kong Stock Exchange, indicating that the company's listing plan has officially resumed in the near future. In this updated prospectus, Huolala's rapid growth in overseas markets has become a highlight. According to the prospectus, in 2023, Huolala's global freight GTV was 9.414 billion US dollars, a year-on-year increase of 28.8%; The platform's revenue was 1.334 billion US dollars, a year-on-year increase of 28.8%.

The rapid growth of overseas brand Lalamove is not an exception. After entering a deep period of development in the domestic logistics market, overseas markets have become the target of China's logistics platforms in 2023. Huolala, Cainiao, and Jitu, three representative logistics companies that have gone global, are collectively known as the "Three Musketeers of Logistics Going Global" in the market, relying on local markets, cross-border trade, and e-commerce to bring tremendous changes to the global logistics market.

Relying on the local logistics market, Huolala's overseas brand Lalamove has seen a nearly 5-fold increase in market size in the past five years. According to Frost Sullivan's statistics, in the first half of 2023, based on the global closed-loop freight GTV, Huolala was a logistics trading platform with a market share of 44%. It is a local logistics trading platform and also the logistics trading platform with the highest average monthly active merchants and completed orders globally.

Cainiao, on the other hand, relies on its "overseas partner" AliExpress to accelerate the construction of cross-border e-commerce and supporting logistics networks overseas. In March of this year, it joined forces with AliExpress to comprehensively upgrade the "Global 5-Day Delivery", expanding its coverage from five countries including the UK and Spain in September last year to more than 10, and entering new countries such as Germany, France, Portugal, Saudi Arabia, the United States, and Mexico, further achieving rapid scaling.

Jitu has seized the local e-commerce dividend and rapidly expanded in the global market. After entering new markets such as the Middle East, North Africa, and Latin America in 2022, Jitu's network coverage in its market has exceeded 95%. According to package volume, in 2023, Jitu entered the top five markets in Brazil, Mexico, Saudi Arabia, and Egypt.

In addition to the "Three Musketeers", logistics companies such as JD.com and SF Express are also constantly expanding their overseas markets. Chinese logistics companies are stirring up the global logistics market.

Three Musketeers of Logistics Going Abroad, Stirring the Southeast Asian Market

Chinese logistics companies reshape the Southeast Asian market

Southeast Asia is a region with far-reaching influence for Chinese logistics companies going abroad. In addition to its huge geographical advantages, the rapid development of the Internet, especially the e-commerce industry, and the improvement of infrastructure have also made it an important market for overseas logistics enterprises. [Decoding the New Opportunities and Risks of Southeast Asian E-commerce in 2024, Multidimensional Practical Analysis of Southeast Asian E-commerce Refined Operation Strategies, Locked in May 11-13, 2024 (Shenzhen) CCEE Hugo Cross border Exhibition Southeast Asia Special Session, Click to Attend and Enjoy Unlimited Business Opportunities]

According to data from Shouchuang Securities, the GMV of Southeast Asian e-commerce in 2022 was 131 billion US dollars, a year-on-year increase of 16%. It is expected that the GMV scale of Southeast Asian e-commerce will increase to 211 billion US dollars by 2025, and the penetration rate of Southeast Asian e-commerce will reach 6.5% by 2025. At present, the number of Internet users in six Southeast Asian countries (Singapore, Malaysia, Thailand, the Philippines, Indonesia and Vietnam) has exceeded 350 million.

A good market foundation has enabled overseas logistics companies to develop rapidly in the Southeast Asian market, and even changed the business model and ecology of local enterprises.

Taking Huolala as an example, its digital logistics solutions have been favored by many enterprises in Southeast Asia, especially small and medium-sized enterprises. Before Lalamove entered the Southeast Asian market, local small and medium-sized enterprise logistics mainly relied on booking vehicles or self maintenance fleets to solve the problem.

In Malaysia, Jane Teh, the general manager of the overseas brand Lalamove, said that after entering the Malaysian market in 2018, she quickly opened up the market with the instant on-demand delivery model of "5-minute matching and 45 minute delivery". A local business owner stated that before Lalamove enters the market, its logistics delivery needs to make advance appointments with truck drivers and try to group orders of the same route together to improve transportation efficiency. Simply arranging logistics takes up a lot of energy. After Lalamove took on its logistics role, there has been a significant improvement in transportation efficiency and costs.

According to Lalamove's official statement, nearly 90% of Lalamove's customers in the Malaysian market are small and medium-sized enterprises. Lalamove has even become a verb locally, and users will say "Just Lalamove it" when using Lalamove for delivery.

In the Indonesian market, Jitu, as a third-party logistics company, undertakes the main e-commerce logistics services in the country, providing strong support for the development of the local e-commerce industry. Indonesia is known as the "country of thousands of islands", consisting of 17508 islands of all sizes, of which more than 6000 are inhabited. Therefore, the express delivery cycle is extremely long. It often takes half a month from the capital Jakarta to a remote island, and it can be delivered every other day or even on the same day. In 2023, the share of Jitu in the Southeast Asian e-commerce logistics market reached 25.4% (based on package volume), and this proportion is even higher in Indonesia. During the peak period of the extreme rabbit season, it once carried over 50% of packages on the local e-commerce platform Tokopedia and over 70% on the second largest e-commerce platform Shopee. In 2022, the business volume of Jitu in Southeast Asia is three times that of the second place.

Compared to others, the cooperation between Cainiao and its overseas partners focuses more on cross-border logistics. As early as 2017, Cainiao collaborated with the Malaysian government to build eWTP (World E-commerce Trade Platform) and eHub (International Logistics Hub), and signed memorandums of understanding with customs in Singapore, Vietnam, Indonesia, and Thailand to promote the implementation of a series of links such as digital customs clearance, smart logistics technology, logistics information sharing, and electronic cross-border trade single window in these Southeast Asian countries. At the same time, it has invested or cooperated with multiple local logistics enterprises in Southeast Asia to promote cross-border logistics and digital logistics services.

There are many factors that have contributed to the success of the "Three Swordsmen" in the Southeast Asian market, but the core is undoubtedly the successful transformation of local traditional logistics models by the digital logistics system that has been tested in the domestic market. Each of the three has its own emphasis, with Lalamove focusing on logistics transportation and instant delivery, Jitu deeply cultivating e-commerce express delivery, and Cainiao focusing on cross-border logistics, opening up a situation in the Southeast Asian market from different dimensions.

Three Musketeers of Logistics Going Abroad, Stirring the Southeast Asian Market

How to adapt logistics to the local market when going abroad

Although the market growth rate is impressive, after several years of development, the competition in the Southeast Asian logistics market has become increasingly fierce, and the "Three Swordsmen of Logistics Going Abroad" still face challenges in the market environment.

Although we traditionally refer to the southeastern region of Asia as Southeast Asia from a geographical perspective, it is actually a vast region consisting of 11 countries, with a land area of over 4.5 million square kilometers and a population of nearly 700 million. For the logistics industry, the diverse geographical environment and complex ethnic, cultural, religious, linguistic, and economic environments have brought enormous challenges to exploring this diversified market. How to adapt to the local market has become a key issue for logistics companies going abroad.

Lalamove's Chief Operating Officer, Lu Jiapei, stated that adapting to the local environment is crucial for logistics companies going global. Lalamove's approach is to use the same set of apps, operating models, and technologies while thoroughly localizing operations in different markets to adapt to the local market.

A typical example is that in Islamic countries such as Malaysia and Indonesia, due to the local religious tradition of praying on Friday noon, there is a significant decrease in Lalamove orders and drivers every Friday afternoon; After the prayer, the order volume will rapidly increase, so it is necessary to mobilize a large number of drivers to go online at this time point. In addition, Islamic countries require Lalamove to prepare and regulate transportation capacity in advance every year until Ramadan, in order to meet the changes of reduced daytime working hours and increased nighttime working hours during the holiday period; In other markets with a larger Muslim population, such as Singapore, it is also necessary to adapt to the market characteristics brought about by local customs.

In order to adapt to different regions, Lalamove has developed its own team in each market, and the management team is all local. This promotion mechanism can also attract more local talents to join Lalamove. At the same time, local companies should try to use the local language as much as possible to better meet the needs of the local market.

Similarly, there are significant differences in customs, religious beliefs, work and lifestyle habits, currency, language, and other factors among different countries and regions. Lalamove will fine tune the local internationalization strategy, such as maps, language, car payments, payment methods, etc., to ensure that product services can meet local needs.

On this basis, Lalamove has also added different vehicle models and value-added services for different markets. In addition to core instant delivery services, it also provides long-distance transportation across cities in certain markets, helping small and medium-sized enterprises reach more customers and expand their business.

These measures, in conjunction with Lalamove's technical and functional team located in Hong Kong, as well as tactics targeting the pain points of local small and medium-sized enterprises, have enabled Lalamove to achieve rapid development in the Southeast Asian market, while providing an excellent sample for logistics overseas enterprises to adapt to different regional markets.

Three Musketeers of Logistics Going Abroad, Stirring the Southeast Asian Market

Seeking Second Growth Externally

After years of development, the domestic logistics market has become severely competitive, and seeking a second growth curve outward is a necessary path for logistics enterprises. In 2023, the highly discussed topic in the logistics industry is "going abroad", and the important destination for going abroad is Southeast Asia.

In recent years, influenced by geopolitical changes and China's accelerated industrial chain upgrading and transformation, many manufacturing companies have shifted their industrial chains to Southeast Asia, where costs are lower and infrastructure is gradually improving. From 2013 to 2023, the average annual growth rate of trade between China and ASEAN reached 8.8%, achieving deep interconnection and integrated development of the industrial and supply chains in the China Southeast Asian market. At the same time, the rapid development of Internet and e-commerce in Southeast Asia also ushered in development opportunities for its infrastructure logistics industry.

With the continuous progress of the "the Belt and Road" economic and trade cooperation, the construction and development of the international logistics supply chain has also become the focus of policy encouragement. In 2023, the volume of trade in goods between China and the countries along the "the Belt and Road" will reach 19.5 trillion yuan, an increase of 2.8%, and the proportion in the total foreign trade will increase by 1.2 percentage points to 46.6%. The 14th Five Year Plan for the Development of the Postal Industry also clearly states that to develop international postal logistics, firstly, expand overseas service layout, and secondly, enhance cross-border service capabilities.

With the development of the Southeast Asian market, Chinese logistics overseas enterprises are gradually turning their attention to the world. The experience provided by the Southeast Asian market will also help Chinese logistics companies rapidly develop globally.

(Cover Image Source: Image Worm Creative)

(Source: Friends of Hugo Net)

The above content only represents the author's own viewpoint and does not represent Hugo's cross-border stance! If you have any questions about the content, copyright or other issues of the work, please contact Hugo Cross border within 30 days after the publication of the work.

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2024-04-24 11:44