How Chinese international logistics companies can solve the localization problem in the international market

How Chinese international logistics companies can solve the localization problem in the international market

 

In Malaysia, small and medium-sized enterprises are truly the backbone of the economy, accounting for 38.6% of the gross domestic product. But with the seemingly vibrant economic situation, small and medium-sized business owners are also facing many development difficulties, such as traditional logistics delivery not being timely, and in order to deliver goods to customers, they even need to book freight vehicles two weeks in advance.

But with the landing of Chinese logistics companies, this dilemma has been reversed. Nowadays, in our local culture and language, when people want to move things, they say 'Lalamove to me'. Lalamove's overseas independent brand Lalamove has covered the entire Malay Peninsula, "said Jane Teh, Lalamove Malaysia's general manager.

 

Of course, in addition to Lalamove, an independent overseas brand of Huolala, many Chinese logistics companies such as Cainiao, SF Express, and Jitu have also begun to layout their overseas markets. Currently, Chinese logistics companies, led by technology, are reshaping traditional logistics formats overseas.

In this regard, cross-border investment expert Jeffrey Tauson boldly predicted that intelligent robots (19.340%, 1.18%, 6.50%) and high-performance data analysis tools can enhance China's competitive position in the logistics industry compared to existing traditional enterprises. I expect several Chinese companies to become global leaders in the logistics field.

 

one

Chinese logistics companies

The 'reef' in the sea

Although some Chinese logistics companies have achieved certain development overseas, they also faced the unified problem of localization in the international market when they first went global.

 

Regarding this, Jiang Xiong, Vice President of Lalamove Technology, frankly stated: "Currently, Huolala and its international brand Lalamove cover a total of 13 markets, over 400 cities, and more than 9 languages worldwide. Lalamove supports a diversified market, so it is necessary to adapt to this diversified feature in technical support.

Regarding the "diversification" mentioned by Jiang Xiong, it at least includes multiple dimensions such as geographical environment, market conditions, laws and regulations. As most Chinese logistics companies first choose to enter the market of Southeast Asia - a country with complex geographical environment and numerous islands, Indonesia alone is composed of more than 17000 islands. In addition, some Southeast Asian countries have outdated infrastructure, making the delivery of the "last mile" extremely difficult.

 

However, the challenge goes far beyond that. The uneven distribution of transportation resources in different markets around the world, coupled with dynamic factors such as real-time road conditions and weather changes, makes efficient and accurate matching of vehicles and goods a highly challenging task.

 

Small and medium-sized enterprises in Vietnam need to wait for several hours or days on the phone to find a suitable driver for booking freight, while in the Philippines, people prefer to use motorcycles for delivery, "Jiang Xiong shared." This requires Chinese logistics companies that settle in the local area to be flexible and adaptable, not only to fit the local market in product design, but also to have a very complete technical system to maximize the allocation of limited capacity.

 

In addition, there are significant differences among countries in terms of language, currency system, and holiday arrangements. For example, the currency unit in Vietnam is relatively large, and the shipping cost of an order can easily reach hundreds of thousands of Vietnamese dong; The currency unit in Singapore is relatively small, and shipping costs may only be around ten or twenty Singapore dollars. Therefore, when designing the UI, the technical team must carefully consider many details such as the number of zeros on the page to ensure the user interface's friendliness and practicality.

In order to overcome the difficulties of localization in the international market, many Chinese logistics companies have taken the lead in building local operational channels when going global.

 

Companies such as JD.com and Cainiao have also established their own overseas warehouses. In 2021, Cainiao established intelligent warehouse networks in Vietnam, Indonesia, Malaysia, and Singapore; In 2022, Cainiao collaborated with Thailand's Lightning to build the largest automated warehousing system in Southeast Asia.

Figure/Cainiao International official WeChat official account Figure/Cainiao International official WeChat official account
Faced with constantly updated local laws and market trends, logistics companies going abroad must have a high degree of flexibility and diversity to ensure the smooth operation of the logistics chain.

two

Realize through technology

Localization of overseas business

 

In recent years, Cainiao has been increasing investment in building a "smart logistics global network" that can reach within 72 hours. Its CEO Wan Lin once publicly stated in a speech that technology will become the first driving force of the logistics industry (6.760, -0.13, -1.89%), and technology can also help the existing logistics industry overcome past constraints and form the sharing of data and logistics resources.

 

The key to Cainiao's "Smart Logistics Global Network" is undoubtedly the word "smart", because the logistics network that Cainiao can lay can also be built by other logistics companies; But many existing overseas logistics companies do not possess the technological strength of Cainiao, which is also a key factor for its rapid expansion into the global market.

 

Figure/Cainiao International official WeChat official account Figure/Cainiao International official WeChat official account
Therefore, in terms of the localization of the international market, Chinese enterprises still need to firmly follow the path of "breaking the geographical gap with technology". Only by relying on Chinese enterprises' superb ability of Internet, can they go faster and integrate better in the overseas market.

Taking Lalamove, an overseas independent brand of Huolala, as an example. In 2013, Lalamove began to focus on using technology to revolutionize the logistics industry. Initially, the team consisted of only three technical engineers who developed mobile applications for both user and driver ends, allowing users to connect with nearby drivers with just a few simple clicks.

 

Subsequently, based on a machine learning intelligent trading engine, Lalamove built an intelligent scheduling system that improves the success rate of vehicle cargo matching by adjusting the push radius according to factors such as vehicle models, order requirements, and user preferences. At the same time, Lalamove also optimizes its freight map services, scientifically and reasonably planning routes, and continuously improving delivery efficiency.

In 2021, in order to address the issue of regional differences in legal systems such as time zones, currencies, regional cultures, traffic rules, data storage, and taxation in different markets, Lalamove has developed its own intelligent technology system - Pioneer System, in order to adjust according to the multidimensional factors of the local market when developing new markets, ensuring rapid integration of business and achieving localized operations.

 

According to Jiang Xiong, in order to develop intelligent systems, Lalamove's technical team conducted multidimensional research and analysis in the early stages of the market, including "market demand," "technical infrastructure," "competitive environment," "regulatory environment," and "localization demand." They then continuously improved the technical system, ultimately presenting a cutting-edge system that can be adjusted according to different markets in terms of cultural, legal, time zone, currency, transportation, text, and other details.

In addition to improving the efficiency of vehicle cargo matching and addressing market localization issues, Lalamove also uses facial recognition technology to authenticate the identity of drivers in terms of freight security, ensuring consistency between the transportation of goods and their identification. Additionally, Lalamove adds image or signature verification to key processes during the delivery process to oversee end-to-end delivery of goods.

 

Thanks to this technology delivery platform from China, small businesses in underdeveloped countries have now achieved 24/7 operational services, allowing drivers in various regions to have unprecedented flexibility in their work and fully utilize their vehicle resources to create additional income.

 

three

Digital Freight

Changing the overseas logistics ecosystem

As Wu Bo, the General Manager of Baishi Group's North China region, said, "Chinese brands expand their business to overseas markets through brand expansion, production capacity expansion, excellent operational scale, sales processes, and supply chain rules.

 

This provides huge opportunities for Chinese logistics companies, and while Chinese logistics companies go global, they also improve the local supply chain and logistics level

Figure/JD International Logistics official WeChat official account Figure/JD International Logistics official WeChat official account
Lalamove, based on the "all-weather timely delivery platform", reduces costs and increases efficiency for freight distribution in various regions through the platform's technological capabilities. For example, in Vietnam, Lalamove provides flexible public pricing, instant delivery services, same day delivery services, and various types of truck and small truck services. Small and medium-sized enterprises can contact thousands of truck drivers within 30 seconds through this platform.

 

This is something that other local logistics companies cannot achieve. Currently, Lalamove is the simplest and most user-friendly application in Vietnam, and our service scope has basically covered all regions of Vietnam, "said Jiang Xiong.

It can be said that Lalamove, which breaks the barrier of localization of the international market, not only uses technology to change the local traditional logistics ecology, but also injects new vitality into the development of SMEs along the "the Belt and Road".

 

Among the small and medium-sized enterprises cooperating with Lalamove, Aguirre Office Furniture from the Philippines is a typical representative. This company was originally established in its own yard and could only receive 20 orders per day. Now it has moved to an office of over 200 square meters and can deliver up to 500 cabinets per day.

 

We have grown from a small backyard operated by ourselves to a large-scale company today, and our rapid development cannot be separated from Lalamove. It can not only achieve 24-hour response, but also multiple point delivery for one order, and the cost is also lower. With their support, our business volume has increased 50 times, "said Joanna Mare Blanco, Chief Operating Officer of Aguirre Office Furniture.

The role of the driver on the other end of the platform is also undergoing a transformation in life through this Chinese technology platform. Julio Fabian, who lives in the Philippines, has not only been able to support his family through motorcycle delivery by taking orders on Lalamove, but has also become a somewhat famous blogger.

 

According to Jane Teh, since its inception, Lalamove has been committed to empowering Malaysia's major economic pillars, small and medium-sized enterprises, by providing them with flexible logistics models. Regardless of the size of the goods being transported, we provide solutions for every industry, making Lalamove a well-known freight platform in our country. Currently, Lalamove Malaysia has 3.4 million registered users; There are 100000 partners and a total of 680000 registered drivers. It can be said that since 2018, we have deeply changed the original business model in the local area

advertisement
After gaining advantages in the Southeast Asian market, Lalamove has turned its attention to the South American market. In 2019, Lalamove launched its business in Brazil and successfully completed its first order after conducting research and analysis on the local freight market, transportation conditions, service resources, etc; Afterwards, through digital freight and artificial intelligence technology, Lalamove not only provided diversified vehicle services to local customers, but also developed instant delivery services for daily necessities such as food, groceries, and medicine.

Nowadays, Lalamove's team in Brazil has expanded from an initial 15 people to 180 people, covering 8 core city clusters and establishing brand awareness and influence in the local market.

 

four

Write at the end

So far, China has signed cooperation documents with more than 150 countries and more than 30 international organizations to jointly build the "the Belt and Road", and jointly build the "the Belt and Road" to become the world's largest, broadest and most influential platform for international economic cooperation.

Today, Brazil's participation in the international cooperation family of jointly building the "the Belt and Road" will further promote overseas enterprises to accelerate their business expansion in the local market, and play an important exemplary role in deepening the cooperation of China, Latin America and other regions in jointly building the "the Belt and Road".

 

It can be foreseen that Chinese logistics companies going global with technology will bring more positive promotion to the development of many key markets.