Mobile apps for logistics services gain traction in China

April 7, 2014 Leave a comment

Mobile apps for logistics services gain traction in China

Staff Reporter

2014-03-25

The mobile internet has changed our lives, from chatting, shopping and hailing a taxi through a mobile phone, to using a mobile device to access banking services. This trend has also impacted the traditional retailing, financial and transport industries and even the logistics sector to various degrees, reports the Chinese-language National Business Daily.

With the creation of mobile app solutions for logistics, a new type of express delivery model has appeared in Chengdu in southwest China’s Sichuan province. By downloading such an app, every mobile phone user can become a tentative express delivery person and be paid 10 to 30 yuan (US$1.6-$8) for such services.

Industry experts are of the view that “everyone participating in express delivery” is a brand new business model that can pool resources from various aspects of society. However, since the threshold for entering the industry is low, regulations will be needed for its positive development.

The model in fact is based on using the mobile internet and peer-to-peer (P2P) concepts in the logistics industry, the report said.

This would allow mobile phone users to check information about mails and parcels to be delivered through the app before arranging their schedule and itinerary for the delivery of such items. A person could deliver these parcels en route to or from their workplace, according to the report.

Ensuring the safe delivery of express parcels is a concern, an industry expert said. The model would work roughly by first asking mobile phone deliverers to apply for a credit card using their registered mobile phone number. Every time they have items to be delivered, a certain amount of money equal to the value of these items is frozen in their mobile banking accounts. They would therefore be paid the 10 to 30 yuan (US$1.6-$8) for the successful delivery of one of the items, which account for 80% of the total revenue for such services, with the other 20% going to the online courier platform supporting the platform’s operations, tax payments and other expenses.

Industry experts praised the business model for meeting the needs of modern development by integrating idle traffic resources, information and logistics flows.

Internet industry researcher Wu Chunyong pointed out that given China’s sizable population and massive population traffic flows, the model would help make good use of less educated workers and ensure that they had an income.

However, another expert noted that given that the business model was complementary in nature, it would never become part of the mainstream express delivery industry.

 

Filed under Macro Trends, TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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