Written by Nikkei Asia
Chinese logistics platform Lalamove is expanding into Japan, aiming to bring the artificial intelligence-powered services that made it a global leader to a country short on parcel delivery personnel.
Lalamove’s Japan office began recruiting freelance licensed cargo drivers in Tokyo on Facebook last month. After registering online, taking online training, and submitting a driver’s license and other necessary documents, drivers can start making deliveries.
In general, the more shippers and drivers there are, the easier it is to make a match with such services. Lalamove aims to attract users by leveraging its global brand recognition.
Revised Japanese labor legislation will cap overtime for delivery drivers at 960 hours per year from April 2024, fueling concerns over a logistics bottleneck stemming from a truck driver shortage.
Lalamove, which is operated by Lalatech Holdings, raises shipping prices during busy times and can reduce how long a van spends being driven empty before its next pickup. Because money can be earned more efficiently than with current delivery service providers, the pool of available drivers may grow.
Lalatech, founded in Hong Kong in 2013, altered the logistics landscape by replacing the inefficient conventional method of dispatching trucks by telephone with AI. Individuals as well as companies can send packages. As with Uber and other ride-hailing apps, Lalamove’s prices are lower during off-peak periods and higher at busy times.
Lalatech began its international expansion in Singapore in 2014 before moving into Thailand, Indonesia and beyond. It boasts about 11 million shippers, including businesses and consumers, and 1 million drivers worldwide, and held an overwhelming 43.5% share of its global market in the first half of 2022, according to US research firm Frost & Sullivan.
Its main business is last-mile delivery of individual packages in mainland China. Unlike in Japan, a driver in China using a small or midsize vehicle can deliver packages without any special qualifications, meaning that regular driver’s license holders between the ages of 18 and 60 can work for the company.
“I can earn an average of RMB 500 (USD 70) a day,” said a driver who gave their name as Wang and recently began working for the company after a stint at a traditional package delivery service. Wang, who moved from inland Henan province to Shanghai to work and put a son through college, expressed satisfaction with the income, though the job can be tough.
Lalatech’s strength is its network of drivers like Wang. For shippers, the ability to send a package anytime and anywhere is enticing. The company fulfilled 428 million orders in 2022, and its gross transaction value, which it considers an important earnings indicator, reached USD 7.3 billion.
Lalatech’s income sources vary by country and region, but they come largely from monthly membership and other fees collected from drivers.
