When Jeevan Kumar had the idea of setting up a logistics company back in 2016, plenty of disruptions were already taking place in the global supply chain business, as consumers increasingly turn to e-commerce for their shopping needs.
Companies were in a race to offer new technology and services to expedite delivery and lower costs.
But the ‘last mile, same-day’ model remains a big and expensive challenge - and largely untapped in Malaysia.
We saw a niche in the market where there were no logistics players servicing the e-commerce perishable space.
“We saw a niche in the market where there were no logistics players servicing the e-commerce perishable space,” says Kumar, co-founder of Zoom, a startup that connects online e-commerce and brick and mortar retailers to on demand same day delivery specialists.
“People who were selling flowers, cakes and so forth online could not get traditional logistics companies to deliver (same-day) for them. And they were willing to pay a hefty amount of money for it,” says the former advertising executive.
Since 2016, the Kuala Lumpur-based startup - founded by Jeevan,Mohamad Hafiz and Sean Lee - has expanded into Indonesia, with close to 60 staff and 300 delivery drivers serving both markets.
“At the moment, in Malaysia, we operate within the Klang Valley, Penang and Johor Bahru. In Indonesia, we cover the Jabodetabek area which is wider Jakarta.”
“We’ve grown and added more services and customers. We now deliver for the likes of Zalora and Lazada. In Indonesia, we do Blibli, JD.id and all these big marketplaces.”
“That’s where I think the general business is going to be in the e-commerce space. But we still offer the same day delivery for perishable goods and stuff. That’s kind of our niche – people come to us because of that skill sets that we have. Of course, that commands a much higher payment than your general logistics,” explains Kumar.
Stepping away from talking about Zoom’s operations, we asked Kumar about the biggest challenge helming a startup; none of the three founders had logistics background.
“I think we spend a lot of our time with the team to learn together because none of us came from any logistics background. But the good thing is, as we try to learn very fast, we fall down, make the mistakes quicker and then not to repeat it.”
Kumar also admits making plenty of mistakes in recruitment during the early stages of the business.
“We were just hiring for the sake of hiring people but not spending enough time talking to them, to understand and to tell them that it is totally different from, for example, working in a bank,” says Kumar.
“Many came in and they didn’t like what they saw and left. That costs us money and time.”
Learning from experience, the Group Chief Executive ‘Zoomer’ - as he is often referred as - says that they are now more meticulous in hiring, favouring a more bottom-up approach recruitment through its ‘Rider Get Rider’ programme.
Under this programme, Zoom’s riders will conduct the interview. Candidates will work up the funnel until it gets to the top management for the final decision.
They are out in the rain, they are out in the sun, and the worst thing is, the last person that is appreciated in the entire supply chain is the guy who delivers (the product)
“That is the reason why our churn rate is very low. The staff that have joined us have not left in the last one in the half or two years. That’s how you build the business. It’s the people.”
People management, says Kumar, is a challenge for Zoom, particularly in keeping the drivers - who work in harsh conditions - motivated.
“I take my hat off to my other partner, Hafiz, who manages recruitment, the drivers and their welfare,” says Kumar. “Keeping them motivated is tough. They are out in the rain, they are out in the sun, and the worst thing is, the last person that is appreciated in the entire supply chain is the guy who delivers (the product).”
To keep them motivated, Zoom carries out family outings from time to time and provide basic English lessons.
“Most of our riders probably fall in the B40 (bottom forty percent) category. Most of them did not have the opportunity to get a higher education. We take the initiative to teach them basic English.”
“Many e-commerce buyers don’t speak Malay. So in that case, there is going to be a barrier if you are unable to converse. I think these kind of things – teaching them skill sets, have been one of the biggest reasons why our drivers stay with us,” says Kumar.
He says that Zoom also pays the drivers attractive rates.
“If you look at the market rate, we are probably one of the highest paying. How we are able to do that is due to the tech platform we have built where we are able to group orders in a much efficient manner,” says Kumar.
“They drivers are able to finish higher number of tasks in a shorter period of time. Therefore, they are able to take on more tasks and once they surpass their daily limit, they start earning an incentive over and above,” Kumar explains.
A Good Problem to Have
Zoom, according to Kumar, is now largely operating in the business-to-business space, helping online e-commerce platforms with last-mile fulfillment process.
The next stage of growth for Zoom is to scale the existing markets, including widening its footprint in Peninsular Malaysia. But Indonesia is where the company aims to grow tremendously.
When we went to Indonesia, we kind of underestimated the market a little bit. We didn’t know it was going to grow so fast. It’s been an eye-opener
“When we went to Indonesia, we kind of underestimated the market a little bit. We didn’t know it was going to grow so fast. It’s been an eye-opener,” says Kumar.
“Our next round of funding will be focused on growing the Indonesian market. What’s in the works for the next fourteen to fifteen months is to expand to other cities in Indonesia that will drive the ecommerce market,” he adds. The cities include Bandung, Yogyakata and Indonesia’s second largest city, Surabaya.
Zoom is also looking to disrupt the last-mile delivery space by offering the ‘freelance’ option. Introduced less than half a year ago, the option emulates the ride-hailing model, connecting businesses to non-professional couriers who can deliver goods instantly.
“Now, people who are working in the shared economy are able to use our system to be able to work, to deliver products and earn an income from that model,” says Kumar. “That’s the focus as we move forward to scale the business."
The challenge for Zoom over the next three to five years, says Kumar, is to stay on top of demand.
“The biggest problem that we are facing now is not about whether we have more competition to deal with but whether there are enough people to deliver the supply that e-commerce is bringing on.”
“The number of deliveries has exceeded the number of people out there to deliver them,” he adds.