On-demand delivery apps take on the Singapore market

On-demand delivery apps take on the Singapore market

Companies like Hong Kong-based GoGoVan and Lalamove make third-party deliveries of goods so customers get them in a matter of hours, not days.

GoGoVan Singapore

SINGAPORE: Touted as the Uber of logistics or the GrabCar of goods, companies providing point-to-point, on-demand deliveries are setting up shop in Singapore. And they want to change the way people get their purchases delivered.

"When you buy something on Amazon, you can still get something delivered within a couple of hours, as opposed to the average expected time here in Singapore,” said Mr William Ban, country manager of one such service provider GoGoVan. “It can go anywhere from one day all the way up to three days. This doesn't really make sense. With a service like ours, our time unit isn't in days, it's actually in hours now."

Christmas has come early for delivery companies here, with some seeing double or even triple the orders they have received in recent months. But the festive cheer may not last for long, as third-party app providers are looking to shake up the industry with their new way of delivering goods.

HELPING BUSINESSES DELIVER FASTER

Companies like the Hong Kong-based GoGoVan connect customers with freelance drivers through web and mobile apps. An average delivery takes about two hours and that is because unlike traditional logistics companies, there is no need for an inventory, warehouse, or central storage system. Goods can be sent directly to the customer, which in turn means faster deliveries.

Another Hong Kong-based company, Lalamove, entered the Singapore market in 2014, around the same time as GoGoVan. It said that it has seen 30 to 40 per cent more orders over the festive season, especially in markets like furniture and food delivery. More businesses are also coming on board, but Lalamove said more could be done to spread the word.

"A lot of consumers and even a lot of business users, they are not used to the whole concept of getting something delivered to their customers immediately, that consumers may actually be willing to pay a little bit of a premium to get something right in front of them,” said the company’s managing director Fion Tan.

Most consumers Channel NewsAsia spoke with welcomed the idea, saying the service is especially useful when it comes to bulky items. However, some noted there are delivery vehicles that do not bear the company logo and that there is often no way to identify the drivers. Unlike regular logistics companies, the third-party app providers do not employ their own van or truck drivers. This echoes some concerns for on-demand taxi services, including driver liability on who is to blame should a delivery go awry?

Lalamove Singapore

Hong Kong-based company Lalamove's office in Singapore. (Photo: Kenneth Lim)

Both GoGoVan and Lalamove said there are strict driver review systems in place. These include looking at a driver's demerit points, having drivers sign a Personal Data Protection Act (PDPA) form, conducting face-to-face interviews and having an in-app rating system.

"Only drivers who pass through the demerit tests and the PDPA, and go through the training with us, then they are on the platform,” said Ms Tan.

"Let's say the incident was severe, then we have no problems in banning that driver, as we are very well aware that one bad experience will ruin the reputation for all of our other drivers,” Mr Ban added.

Mr Ban also said not employing its own drivers allows the company to scale and reduce fixed costs. But he said it remains a hurdle to convince users that the service is reliable despite not owning the vehicles.

STILL ROOM IN THE MARKET

Despite the range of delivery services, Ms Tan said Lalamove is not a "full-fledged moving company". Some experts have said that it is a reason why the current big players might not have to worry about the competition just yet.

"Logistics operators, what they can provide is actually an overall, a total solution; it's not just a small scale of pick-up and delivery,” said transport analyst Prof Lee Der Horng. “ So even though we have this new trend in providing, or making use of the third-party apps in providing logistics services, I think market harmony will still be there."

But ultimately, these third-party app providers said the industry has to move with the times. Both GoGoVan and Lalamove each raised S$10 million in funding recently and are looking to expand their business further in the coming year.

"We're disruptors, right. We're going to make a lot of noise, ruffle some feathers, and there are some ripple effects happening,” Mr Ban said. “It's not a question of if logistics will go on-demand, it's just more of a question of when."

Source: CNA/hs

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