Whether when it comes to solutions directly to consumers or to other businesses, logistics are often a hurdle for companies operating in Latin American countries. But a few players have been watching this as an opportunity, willing to change the game and solve the last mile delivery in those countries. Loggi, CargoX, Rappi, James Delivery… and the list goes on. While some of them focus on solutions for consumers, others are aiming at solving these issues for other companies. And one, in particular, is targeting both markets: the Hong-Kong based Lalamove.
A unicorn since early 2019, the logistics platform reached the coveted status after raising a $300 million Series D round led by funds Sequoia Capital China and Hillhouse Capital. With more than $460 million in investment, the startup sped it up its operations to 180 Asian cities.
As for Brazil – the first country outside Asia where Lalamove decided to operate – the startup entered the market later then, in June, and is currently increasing efforts to reach more cities, as well as to extend its offer to big enterprises and consumers, fostering competition against Latin American unicorns Loggi and Rappi.
“We believe that we have a lot of room to grow and to contribute to the success of these companies,” says Lalamove’s expansion manager, Philippe Rambaud, regarding their recent decision of targeting enterprise-sized companies. In an interview with LABS, he evaluates Latin America’s – and especially Brazil’s – market potential and tells what are the unicorn’s plans to disrupt a market still attached to informality – whether among consumers or in the B2B sector.
We are working hard to democratize delivery services in Mexico and actively expand our team to offer the best logistics service on the market.
Philippe Rambaud, Business Expansion Manager at Lalamove
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L: In addition to the expected arrival between the end of 2020 and the beginning of 2021 in Colombia, Peru and Chile – what strategy is Lalamove designing for these countries?
P: Lalamove arrived in Latin America in 2019. In those first few months, we felt it was important to test and validate our solutions. Our results here, however, already show that we will probably continue our expansion across the region.
L: How has the operation’s performance in Mexico been so far – after opening in December?
P: We are very optimistic about the Mexican market. We are being very successful in getting a significant number of downloads of our app and we also have many partner drivers already delivering with us.
We are working hard to democratize delivery services in Mexico and actively expand our team to offer the best logistics service on the market. We had a successful “soft launch” event in December 2019. In January of this year, we also made our official launch very successful.
After a few months of operating in Brazil, we have a more robust and enough network of partner drivers to meet the demand of these large businesses.
Philippe Rambaud, Business Expansion Manager at Lalamove
L: What motivated the decision to expand to other capitals outside the Rio / São Paulo axis? What was the potential identified in these other regions?
P: Brazil has several state capitals that can benefit from our solutions. These are cities with companies and people in need of delivery. In addition, many companies that already deliver with us ask us to operate in other cities and thus expand their partnerships with us.
We believe that our moving trucks, SUVs, and motorcycles will make life easier for those who need to transport something. But as with the plans to arrive in other countries in Latin America, the expansion to other Brazilian states is still in the planning stage.
L: What are the challenges and biggest bets on targetting enterprise-sized companies vs. SMB?
P: For small and medium-sized companies, they may find the processes related to logistics intimidating and complex. A solution like ours is providential for these businesses. With a few clicks, they can have a truck, SUV or motorcycle at their disposal. And at the best prices on the market.
Large companies, on the other hand, have complex operations and need to be cost-efficient. In addition, they need personalized reports and differentiated services. We help them with all these needs and, after a few months of operating in Brazil, we have a more robust and enough network of partner drivers to meet the demand of these large businesses.
We have special payment terms and services for corporate clients that can be useful for businesses of all sizes. We believe that we have a lot of room to grow and to contribute to the success of these companies.
L: What about the B2C operation – what are the biggest challenges to grow in this sector and why did Lalamove decide to operate on that front too? Does it have more potential than B2B?
P: We decided to operate B2C because there are no efficient solutions for people who want to transport something or moving in or out of a house, for example. It is still a very informal market, especially when these consumers want to transport more bulky goods. We are in 2020 and people still need to ask friends if they have a reliable contact for this type of service (freight). We help these people to find a partner driver in a few clicks and, in addition, vehicle owners have the opportunity to increase their income.
Moreover, B2C is complementary to B2B, as consumers normally use our service on the weekend, while companies, most of the time, deliver during the week.
