Uber’s departure in 2018 left space for local startups to step into the lucrative Vietnamese ride-hailing and food delivery markets, looking to challenge Grab’s dominant position. Notable among these is Loship, one of the fastest growing and most promising Vietnamese tech startups, capitalizing on its in-depth understanding and expertise in its home market.
From food review app to one-hour-delivery e-commerce platform
Lozi, known as Loship’s parent company, was originally launched in 2014 as a restaurant-review and food-search app allowing users to find dining places based on ratings and reviews. The startup then quickly expanded its services and became a hyper-local e-commerce platform in Vietnam, dedicated to the buying and selling of various product categories including fashion, vehicles, electronics and others.
With its growing success, the investments soon followed, with the startup securing its first investment from local accelerator Vietnam Silicon Valley, followed by a seven-digit funding round with Singapore’s venture capital firm – Golden Gate Ventures and Japanese-owned internet media company – DesignOne Japan in 2015.
In late 2017, considering the rising customer preferences for convenient ordering as well as the sellers’ on-demand delivery needs, Lozi built their own fleet of on-demand delivery services called Loship, aiming to facilitate C2C transactions and bring forth a seamless customer experience, from ordering to delivery and payment.
The national startup hero in the e-commerce marketplace
So, what is Loship? Tapping into the competitive e-commerce market was a bold, but aggressive move by Loship. Within a limited period of time after its official launch in 2017, Loship has been growing tremendously to become one of the most effective one-hour delivery e-commerce platforms in Vietnam. The app is currently offering a wide range of services including food delivery (Loship), grocery delivery (Lomart), ride-hailing (Lo-xe), medicine delivery (Lomed), laundry service (Lozat), package delivery (Lo-send), flower delivery (Lo-hoa) and B2B supply delivery (Lo-supply).
In 2019, Loship’s continued growth and success led to an eight-digit funding (in USD) from South Korea’s Smilegate Investment, together with the significant investment from Hana Financial Group – one of the largest financial corporations in Asia. Commenting on the injection of investment capital, the founder of Lozi said that it would give the company a competitive edge in growing and improving its delivery services, supporting its expansion across the country to become a go-to solution for Vietnamese consumers’ one-hour delivery needs.
Loship has grown to have a fleet of more than 50,000 drivers and close to 200,000 merchants, serving almost 1,500,000 customers across four big cities of Hanoi, Ho Chi Minh City, Da Nang and Can Tho. Loship expects to triple its daily transactions to 150,000 transactions in the next 12 months, generating around US$31 million in revenue in 2020.
“The e-commerce game is no longer about being the fastest in the space, but about being able to deliver in a time span and price range that matches with the customer needs. Consumers aren’t just looking for delivery – they’re expecting differentiated experiences. It seems that the current market hasn’t been efficiently served, meaning that the opportunity for newcomers who provide differentiated customer services is abundant. As a Vietnamese startup with accumulated knowledge and in-depth understanding about the local market, I believe we have what it takes to enter the game and create true value for our customers”, explains Trung.
“There are many other niche services that we want to provide in the near future to better serve the diverse needs of local customers, and moreover, the whole services supply chain will be provided on an all-in-one app called Loship,” he adds.
“We are customer obsessed, not competitor focused”
Needless to say, the market is getting fierce and everyone is trying to crave a slice of this pie. However, CEO Nguyen Hoang Trung said he didn’t worry about other competitors, adding that Loship is focusing on providing a differentiated experience with tailored and to-the-heart services, rather than diving in the cash-burning competition to seek market share.
“We shift our focus on customers, not the competition. We strive to take good care of our customers and drivers, while simultaneously upgrading technology to ensure optimal quality of services. Worrying about competition is an unnecessary distraction and no good for businesses. Customers will always jump from one service to another, but if we can deliver true service excellence that comes from the heart, customers will eventually stay with us,” says the CEO.
Speaking of its recently launched ride-hailing service called Lo-xe, whose market is dominated by Singapore-based Grab, Trung said that he always put customers at the heart of all business decisions. His intention to enter the ride-hailing market was to provide their customer base with a better alternative without hidden fees or additional surge pricing. “We want to keep up with customer expectations and offer them more beneficial choices. Customers need to be empowered, not controlled, and that’s all we think about,” he adds.
Moving forward
Loship takes pride in how its current achievements weren’t driven by the cash burn strategies adopted by other players in the region. Moving forward, Loship intends to expand its presence into different cities across Vietnam, while constantly providing more value-added services to meet customer expectations. The tech startup is also working on securing some strategic partnerships with international investors, boosting a strong alliance for long-term development.
Furthermore, Loship looks to gain a foothold in the retail supply chain sector with a new service called Lo-supply, bringing a wide selection of ingredients and raw materials for retailers at the most affordable wholesale prices and fastest speed of delivery. “The opportunity for supply chain in retail is abundant, given that the Vietnamese retail sector is booming and growing at a fast pace,” says Trung. “It’s very possible that Lo-supply can be a catalyst for Loship’s business growth and profitability in the near future.”
In the long run, Loship aims to build a seamless online purchasing experience with the new development of its own E-wallet, thereby promoting non-cash transactions. The startup’s ambition is also to provide every household product and item that cannot be delivered under one hour.
“Loship is built and developed by Vietnamese talents with the aim to serve Vietnamese people. This is always the opening sentence of all of my presentations to investors as I’m proud of this. I believe the local market has huge potential for growth, and there are a plethora of things Vietnamese people can do to contribute to the betterment of Vietnamese society,” Trung concludes.
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