eCommerce

Why We Decided to Build Locad - An Introduction From The Founders

Enabling Consumer Brands with E-Commerce infrastructure as a service and flexible access to a distributed supply chain.

 

The Defining Opportunity of Our Time

For those of us in the consumer and retail sector, E-Commerce is the defining opportunity and transformation of our time. The Covid pandemic has accelerated an inevitable trend that has transformed retailing and consumer goods distribution one sector at a time, touching all verticals and geographies. The pandemic has led to a step-change and compressed adoption, leading industry pundits to say that we have seen a decade worth of gradual E-Commerce adoption compressed into 6 months. The pandemic has made it unmistakably clear that digital transformation and developing a healthy E-Commerce business has become an imperative for consumer brands in any sector to flourish into the next decade.


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Read the full report: e-Conomy SEA 2020

Beyond the acceleration effects of the pandemic, E-Commerce, by its nature as an open ecosystem, enables millions of entrepreneurs across the world to build new brands faster than ever before, access a huge customer base far beyond the catchment area of any store, start a global business from their living room, and challenge industry incumbents on an equal footing by providing a good product at an attractive price - without most of the barriers to entry that shield traditional distribution channels from new entrants. In many ways, E-Commerce has made trading more dynamic, free, and borderless than ever before.

As social distancing and lockdown measures have opened the floodgates for E-Commerce adoption, brands and retailers relying primarily on offline sales channels have rushed to expand their online distribution, and digital-native brands have braced themselves to cope with rapidly growing sales volumes that stretch existing fulfillment and logistics networks to the breaking point. To further complicate matters, the disruption in commercial air travel has eliminated 90% of the world's air cargo capacity almost overnight, severely disrupting cross-border supply chains. Cross-border E-Commerce shipments that used to reach most parts of the world with a few days extra lead time and relatively low shipping costs are now arriving in weeks and months rather than days, and the cost for faster air shipping has significantly increased. This has widened the customer experience gap between brands with a strong localized fulfillment infrastructure, and those relying on less mature and scalable supply chains with long shipping routes to reach end-customers.

Over the last decade, E-Commerce juggernauts like Amazon, Alibaba. and JD have invested billions of USD to build sophisticated and highly localized supply chains, shortening the last mile to continuously reduce delivery times to the end consumer. This has set a higher bar of consumer expectations for the sector as a whole, with Delivery and Returns as key drivers of good Customer Experience.

 

Facing The Challenge

It is a challenge being the underdog in the online business space, especially when you've got great products and no easy way to make them available far and wide to customers. At least, not the way larger chains and distribution partners can. Compared to the E-Commerce juggernauts of Alibaba, Amazon and Shopee, even established and successful brands often feel like the little guy in a race with the giants and their seemingly unlimited funds and hunger to dominate the market.

You are at once, working hard to build and grow your E-Commerce business from scratch, while also fighting for space in a competitive marketplace and in consumers' minds. All it takes is one delayed package, a lost inventory item, or an inordinately high shipping cost which can lead to a series of unhappy customers and things can go south pretty quickly from there.

That's where Locad comes in - a platform for multi-channel fulfillment, on-demand warehousing, and a powerful distribution network for your business.

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Partners in Commitment

Our commitment is to enable great brands and ambitious entrepreneurs to succeed in omni-channel (E-) Commerce, by providing them a platform with the supply chain infrastructure and tools to grow their business.

Prior to starting Locad, we've spent years developing the E-commerce landscape from different perspectives: as an E-commerce platform at Zalora and Grab, as a logistics provider at Entrego, and with a brand perspective by working closely with and investing personally in a few direct to consumer (D2C) brands.

We have seen all sides of this sector, and decided it was time to start levelling the playing field for E-Commerce brands of any size.

 

Real Business Case Studies...

Here’s the truth: You, as an entrepreneur, offer great products. A product which deserves to be available, accessible and benefit the largest number of customers across Asia Pacific. 

Yet, a well known challenge stands in your way: your supply chain. It has been a hurdle.  

Time and time again, we worked with far too many brands that wanted to grow their online presence and yet struggled with the complexity of multi-channel E-Commerce, lacking the resources to solve that challenge inhouse.

Sound familiar? So let's look at it a little closer:

A common strategy for brands we have worked with in our Zalora days, for instance, was to sell initially on one platform - then later on setting up their own "brand.com" store and a presence on marketplaces such as Lazada and Shopee.

Often, multi-channel retailing results in a disjointed inventory and fulfillment set up. With a dedicated stock pool for each channel, you then need to manually update your stock on each respective platform. If one platform runs low, while another isn't moving a product, there is no easy way to transfer it over. A disconnect between sales and inventory data then leads to an absence of holistic visibility over an entire business. This in turn makes forecasting and managing your business much harder. It is therefore very clear that a key  factor of running a successful E-Commerce business is smart and seamless inventory management across all channels.

Many brands selling online are under-delivering on their potential online footprint by not getting the basics right (eg. fast shipping, low shipping fee, convenient returns, convenient localized payment options including COD, etc...). Add to that the reality that you might be shipping internationally with postal shipping, which may require customers to pay out of pocket for not only shipping, but import duties. For some brands, customers need to travel out of their way to warehouses, post offices, or customs offices to pick up and drop off shipments, diminishing the convenience proposition of E-commerce. Now, you’re losing repeat customers.

All of this leads to inefficiencies, customer churn, lost sales, reduced margins and bad cash conversion - key factors of success that online retailers must firmly control. Having seen similar challenges over and over again, based on our direct observations and on the ground experiences across the region, with numerous small, medium and large players, it was time to build a strong platform to address these challenges and empower all brands to succeed online: Locad was created as a holistic, simple, efficient platform for the backend infrastructure of E-commerce, providing technology and supply chain as a service so you can focus on growing your online business.

 

… With Happy Customers’ Endings

Locad now enables brands to keep up with high customer expectations and integrate their business seamlessly across multiple sales channels, from shop systems like Shopify and Woo to marketplaces such as Amazon, Lazada, Shopee, Zalora, etc… and benefit from efficient tools to deliver a best in class customer experience through supply chain infrastructure as a service with 4 critical levers:

  • Help E-Commerce brands sell across multiple channels from one consolidated inventory pool.
  • Run a distributed fulfillment network to bring your stock closer to customers, shortening the last mile, which leads to lower shipping cost and faster delivery.
  • Make data flow between all your sales channels and your supply chain, so you have real time visibility of sales, inventory and all the KPIs that matter for your business.
  • Make it easier to expand your business with on-demand fulfillment capacity and easy international expansion.

Currently, many brands are faced with a dilemma: Leveraging the fulfillment infrastructure of the big E-Commerce marketplaces (Fulfillment by Amazon, Lazada, etc) helps to offer more competitive lead times and shipping options to consumers with low barriers to entry. At the same time, it makes you as a brand entirely dependent on one platform operator that controls both the front-end customer-facing platform and the back-end infrastructure, and all your customer data in the process. While this can be a sensible trade-off for some brands that generate their sales on only one online platform, it is often not a good choice for brands that have a strong multi-channel online presence, generating sales through a multitude of channels including an own brand.com online store and multiple different E-Commerce platforms. Fundamentally, fulfillment offerings tied to one marketplace will always be conflicted by the inherent priority of the operator to increase sales (GMV) of their own platform, rather than optimizing for the best outcome of a brand across all its sales channels.

This is why we believe that the time has come for a channel-agnostic supply chain platform that provides the backend infrastructure of E-Commerce as a service, enabling brands to deliver best in class operations and customer experience across the whole E-Commerce ecosystem, maximizing their business across all channels.

At Locad, we only work for you as a brand and our interests are 100% aligned to the growth and success of your business. Every brand is different, but everyone needs a strong back-end supply chain to scale the business. At this moment, the E-Commerce space in the Asia Pacific region offers endless opportunities. Unlike the offline retail space that is often hard to break into, ambitious brands and hungry entrepreneurs can build a big following online and scale up their business, as the E-Commerce retail landscape continues to mature.

Locad is here to enable the delivery of your E-Commerce strategy; we are by your side with the infrastructure and tools to help realize your business aspirations!

Sincerely, ConstantinJannis, and Shrey

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