Q&A: Lalamove's Blake Larson

Q: What attracts drivers to Lalamove?

A: Our value proposition to drivers is threefold. First, we offer them a way to increase their income. In many markets, truck or van drivers only completed one or two orders a day, which meant a lot of uncertainty about their daily earnings. After registering with us, they can at least double their earning capabilities. Second, we offer them the freedom to work how they want. They can work as much or as little as they want based on their individual needs. If they need to take their kids to school in the morning or care for their sick parents, our platform provides them this flexibility. Lastly, we focus on respect. Historically, drivers have been seen as a commoditized labor force with low skills sets. We look at our delivery partners as entrepreneurs – they work hard and hustle each and every day. We want to empower them to work in a better more efficient way that elevates the role of delivery people as a key part of what makes our cities work.

Q: How do you gain insights into what drivers want?

A: To understand your customers better, you need to be on the ground rather than sitting in the office. For instance, in Hong Kong, we would hire a van to see what it is like to be a driver who uses our service. I myself sometimes use my motorcycle to do deliveries in Hong Kong to gain insights into the user experience in the city. Instead of only speculating what the customers need, it’s better for to talk to or even become one of them. Our founders have spent a lot of time hanging out with drivers as well.

Q: How do you localize?

A: The biggest compliment for us is when people think we are a local company. For instance, in Manila you can see Lalamove drivers everywhere as they deliver via their motorcycles and trucks. We localize our messaging and hire local teams that understand the needs of the local communities we operate in. The nature of local delivery can be very different because of regulations, customs and infrastructure.  By living and breathing that local environment every day, our teams create a sense of community and integrate into the fabric of the cities they serve.

Q: What are the major revenue channels for the company?

A: We have two main revenue channels: revenue sharing with our partners in Southeast Asia and charging membership fees to our delivery partners in mainland China. The adoption of different business models in the two places is reflective of the local nuances in how our partners prefer to engage with our platform.  For example, in mainland China, our delivery partners prefer to pay upfront and not on an order basis. But in South East Asian countries, due to how other shared economy platforms work, our partners prefer to share the revenue for each order with us.

Q: How do these systems work from a practical perspective?

A: We have different levels of membership fees in China [those in the top tier get access to the most orders] and drivers there don’t have to share commissions with us. In Southeast Asia, divers take mostly orders that are paid with cash. After they have taken cash from customers, we require them to top up an e-wallet in our app to pay the commission. If the customers pay with a credit card or through their registered account on the app, we will deduct commission from the drivers’ e-wallet directly and then pay them the money.

Q: What do you think of the competitive dynamics in the industry?

A: There are other technology-driven logistics players with services that are similar to ours; however, in the end it’s not just about technology but the ability to create value to our clients and delivery partners. We believe competition is essential as it pushes us to improve all the time.

Q: What is the development strategy for 2019?

A: In mainland China, we will focus on enterprise clients, further penetration in tier two and tier three cities and vehicle sales. In Southeast Asia, we are also focusing on attracting enterprise clients and aim to open more cities in that region. In addition, we are expanding our presence in India, having launched there in January.

Q: Why vehicle sales in China?

A: We have roughly two million registered delivery partners in China and given our close relationship with them, we look for additional ways to create value for them. Vehicle sales is a natural way for us to help them by providing quality vehicles and financing which may have previously been hard to obtain given the lack of documentation regarding their income. Even though retail car sales plunged in China in 2018, we are still bullish on our car dealership business because it’s more business focused. Purchasing new cars is an essential not a discretionary demand for drivers who deliver to make a living. We are going to rapidly scale up the business given our early success doing so in a few cities in 2018. 

Q: Is an IPO on the agenda?

A: Not yet. All our investors have been very supportive of our current strategy and trajectory. I believe we have met almost all if not all the criteria to list in a city like Hong Kong but there is no pressing reason for us to list at this moment. With the funding round we just closed, we have sufficient resources to execute our strategy.

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• Topics
• Greater China
• Technology
• Southeast Asia
• South Asia
• Hong Kong (China)
• Asia
• TMT
• Logistics
• Transportation