Delivery companies invests in infrastructures to cater to higher demand

This is following the change in consumer purchasing behaviours resulted from lockdowns 


LOGISTICS companies are optimistic on the reopening of all economic activities that will reactivate levels of consumption among households. 

Ninja Van Malaysia CEO Adzim Halim said the lockdowns imposed to curb Covid-19 infections for almost a year and a half have undoubtedly altered consumer purchasing behaviours as they had witnessed a skyrocketing growth in digital consumption which in turn affects the delivery service provider positively. 

“Research has shown that more than one in every three digital service consumers started using the service due to Covid-19, it is predicted that 94% of new digital service consumers intend to continue with the service post-pandemic. 

“Technology has fundamentally changed the way we live, take grocery shopping for example consumers who have tried online grocery shopping have doubled with over 75%, indicating they’ll continue post-Covid-19,” he said to The Malaysian Reserve (TMR). 

Ninja Van, which secured a US$578 million (RM2.41 billion) in a Series E funding round, said it will invest into developing better infrastructure and relook at its operating models to meet higher consumer expectations, especially in terms of speed and logistics options available. 

The money raised was also allocated towards infrastructure and technology systems that will support a sustainable long-term cost structure, as well as the quality and consistency of Ninja Van’s operations.

Funds will also be invested in Ninja Van’s suite of micro-supply chain solutions to help South-East Asian businesses optimise e-commerce opportunities.

The funding involved participation from existing investors Geopost/DPDgroup, B Capital Group, Monk’s Hill Ventures and Zamrud, an entity linked to a South-East Asian sovereign wealth fund. 

Alibaba Group, parent company of Lazada, the pan-South-East Asia e-commerce platform, also participated. 

He added that the e-commerce market in Malaysia had grown rapidly in recent years and is currently worth US$4.3 billion and expected to double to US$8.1 billion by the year 2024 at a 14% compound annual growth rate. 

Bernard Tay, Head of Amazon Global Selling, South-East Asia, in a recent press release said Malaysia e-commerce is still a relatively new but rapidly developing sector. 

“The surge of demand for online shopping under the lockdown begets the digital model of doing business as part of the new normal, alongside business innovation and technological adoption. 

“Based on our latest report, Malaysian micro, small and medium enterprises (MSMEs) want to develop more robust capabilities for cross-border e-commerce — from understanding business models and international logistics to cross-border operation, regulation and foreign competition,” he added after conducting the first-ever Seller Boot Camp, a virtual event hosted to equip sellers with the resources needed to overcome cross-border e-commerce barriers. 

He added that customers’ shopping behaviour is shifting to online quickly. Cross-border e-commerce, which optimises the process of trade can help sellers reach global customers directly and represents a global opportunity. Research shows that overall cross-border business-to-consumer e-commerce market value was forecasted to surge by 30% from 2019 to 2026. 

He added that amid the opportunities for growth through e-commerce, local MSMEs cited difficulty in managing cross-border supply chains and logistics, high operation costs and the intense competition with international sellers on Amazon. 

“Difficulty in managing cross-border supply chains and logistics is the most common challenge faced by Malaysian MSMEs surveyed, with 47% citing it as their top barrier,” he added. Founder and CEO of Dego Malaysia Nabil Feisal Bamadhaj said physical business reopening is good news for the company as they looking into increasing their delivery post-pandemic.

“We did 300 deliveries pre-Covid per day and it increased to 400 deliveries per day during Covid. But now we are down to about 250 deliveries,” he said. 

“But we are confident that the numbers will bounce back to its pre-Covid days as right now people are excited to enjoy their freedom to be able to go out but once the hype has settled down people will look back to delivery services for their own conveniences,” Nabil told TMR. 

He opined that e-commerce is a growing industry that is much younger than the physical retail industry and due to the pandemic, it has exposed everyone to the benefits of e-commerce and thus increases the demands for delivery services. 

“Many new businesses were born out of the pandemic which heavily relies on delivery services to reach their consumers as engaging in modern delivery services today is much more convenient,” he said. 

Nabil added that delivery services will stay strong as it provides conveniences to Malaysians that are still not confident with being outside. 

“Those who have adopted a new norm and are still not comfortable to have physical contact or to be in crowded spaces, dine-in or go to a shopping mall will still opt for delivery services for the main reason of convenience. 

“We will continue to innovate our services and technology to improve the convenience aspect for everyone involved. With physical businesses reopening, we would love to see them continue innovating their e-commerce initiatives and provide a greater range of conveniences to their consumers via the use of smart delivery solutions like what we pro-vide for businesses,” he said.