The market for e-commerce is thriving worldwide, and in the Southeast Asian country of Vietnam with its young population, opportunities for growth for an e-commerce startup are quite prosperous.
Loship, a Vietnamese e-commerce startup established in 2017, is an example of growth and the future of profitability. The startup has got much attraction from International Investors since its inception and is a promising venture that could achieve a ‘unicorn’ status.
Promising startup attracting investors’ interest
While there are many e-commerce players in Vietnam, Loship is known for its unique Intra-city one-hour delivery offer. Also, it offers a range of services from food delivery, grocery delivery, ride-hailing, medicine delivery, and many other on-demand services. No doubt, the startup has attracted an influx of investments.
“There are not many players in the market who can offer one-hour delivery services, which we consider a competitive advantage. I believe this kind of service will be our engine for growth and profitability as more and more customers now expect quick and urgent delivery options. Those players who can offer the quickest delivery times will win the game,” the CEO of Loship, Nguyen Hoang Trung shares.
Since its inauguration in 2017, Loship has obtained capital injections from several investors, including Vietnam Silicon Valley, Golden Gate Venture, and DT&Investment. In 2019, Loship received eight-digit funding (USD) from South Korea’s Smilegate Investment in its Series B funding round. In the second tranche of its Series B, Loship also secured investment from Hana Financial Group, one of the largest financial corporations in Asia, for an undisclosed amount.
“Our growth rate so far is considered to be on par with companies with many times more investment capital than us. I think the only reason why foreign partners choose to support us is because we have a profit-driven business model in place, and we are creating benefits for them,” CEO Trung said.
“Besides established investors, we also have the participation of individuals from Silicon Valley as well as Australian strategic consultants with many years of working experience in CommonWealth Bank and VIB Vietnam. We are therefore confident that we have the support needed to embark on our journey from being a startup to a billion-dollar unicorn,” he adds.
Easy for consumers; profitable for sellers & source of income for youth
The e-commerce market in Vietnam is projected to grow five times from 2015 to 2019 from $5 billion to $23 billion. In this scenario, Loship is leading in capturing a major size of the e-commerce market with its unique strategies of promoting local sellers and tying up with the traditional retailers. Loship operates without a warehousing cost and connects the sellers directly with the customers through the delivery chain.
The Loship ordering is simple and easy for customers, who can place their order on the app that detects the location and gives recommendations. Once an order is placed with the seller, a chosen driver is given the task to fulfill it. Loship’s main driving force is the fleet of drivers that is the connection between the sellers and the consumers. The drivers that mainly operate on two-wheelers are well-trained and given high-incentives to work for the startup.
The startup currently has more than 50,000 drivers and about 200,000 merchants as part of their service. The platform is catering to more than 1,500,000 customers across the country, and there are around 70,000 daily transactions. Loship expects the figure to triple in the next 12 months, generating about $31 million in revenue in 2020.
Race to become the next unicorn: From service expansion
Loship’s business model is getting much more popular compared to other regional players that do not have the advantage of a 1-hour delivery service. The company has a strong vision of growth and wants to become the next unicorn of the country. Considering the prospects of strong investor backing, coupled with Vietnam’s thriving startup ecosystem and government support, the goal is achievable.
“The key to sustaining growth to a unicorn status comes by investing and tapping into new verticals to expand at a much faster rate,” says CEO Trung.
Apart from food and grocery delivery, Loship is looking to gain a foothold in the retail supply chain sector with a service called Lo-supply, bringing a wide selection of ingredients and raw materials to retailers at the most affordable wholesale prices and fastest speed of delivery.
“In line with the tremendous growth that Vietnam’s retail supply chain sector is currently undergoing, the opportunity is ripe for us to grow in this domain further. Lo-supply may be an engine for Loship’s business growth and profitability in the near future,” he explains.
Additionally, Loship wants to tailor its product offerings to such items that cannot be delivered under one hour, for example, household products and home appliances. Commenting on the service expansion plan, CEO Nguyen Hoang Trung says: “There are so many new verticals that we are looking to launch, and we are ready to explore new opportunities that come our way.”
Market expansion and strategic partnership enhancement
Loship’s strategy is to serve and improve the livelihoods of consumers all over the country, not just in big cities. As part of its market expansion plan, the capital-raising will be used to expand Loship’s presence out of the current four cities where it’s already set footprint, including Hanoi, Ho Chi Minh City, Da Nang, and Can Tho.
“It is reported that just over one-third of Vietnamese residents live in urban areas, with the majority of the population still dispersed across rural areas and encountering difficulties in online shopping. Given this circumstance, we are accelerating efforts to expand our reach into other lower-tier markets to unleash consumption potential further, offering fast and efficient delivery services to customers, especially those living in remote and underserved areas,” says Trung.
With regard to partnerships, Loship is fostering some strategic partnerships with local and international organizations, boosting a strong alliance for long-term development. In particular, Loship has inked partnerships with VNPT – one of the leading digital payment providers in Vietnam as well as other well-known e-wallet platforms. This strategic collaboration will enable convenient and seamless transactions for not only consumers but also driver-partners and merchants on its e-commerce platform.
“Eventually, we will enter the financial technology (FinTech) sector with the new development of our own e-wallet to facilitate cashless payments for all of the services offered through Loship. The future is cashless, and we are moving towards it,” he shares.
What’s more, the startup has already formed a partnership with Adgo, AI-driven revenue growth engine for Commerce, with the aim to help its merchants launch effective advertising campaigns at the most optimal costs. “We understand the difficulty of merchants in reaching customers through advertising on social media platforms, especially when they don’t have enough expertise in the field.”
“Therefore, by connecting with a third party to provide additional advertising features on Loship’s mobile app, we hope to increase sales revenue of our merchants in the most comprehensive way,” Trung explains.
Behind every successful startup is a visionary founder
The startup has strong leadership at its helm with CEO Nguyen Hoang Trung and a team of young talent with global experience. Loship has the backing of committed advisors like Ju Young Yang, COO & Co-founder of Korean unicorn Viva Republica; Jeffery Paine, Founding Partner of Golden Gate Ventures; David Goddard, Head of Strategy and Business Development of Vietnam International Bank; and Kim Kyoung-Hwan, Vice President of Smilegate Investment.
Trung, who is responsible for running all facets of the business, including marketing, investment, technology management, product development, and more, has taken the company’s value up significantly to 8-digit-dollar’s value. In 2017, Trung was nominated in Forbes 30 under 30 Vietnam, followed by being named in Forbes 30 under 30 Asia.
Speaking of his long-term business goals, Trung shares: “We’re moving towards our vision to become the nation’s startup hero and the next unicorn of Vietnam. I believe we have all the right factors to make it happen – radical visions, well-trained tech talents, and more importantly a profit-driven business model that allow us to scale up to the regional standards. As the quality of Vietnam’s tech startups steadily improves, Loship is poised to lead the way in fulfilling the country’s ambition of having ten tech unicorns by the year 2030.”