Technological advancements have greatly altered our lifestyle; today you can browse an online fashion store in Thailand, use advanced AI data analytics to find the best fitting dress, pay across borders without having to count your cash and have the dress delivered to your doorstep. All of those steps require little human intervention, except the last step – delivery to your doorstep. Just take the packaging for example, when you receive your package, do you notice how much handwritten scribbles are inscribed on the packaging? With deep technologies permeating more aspects of the value chain, handwritten scribbles and other traces of manual effort are greatly out of place. I had the pleasure of speaking with Lee Junxian; co-founder of Moovaz, to learn more about how his company is harnessing technology to provide fuss-free international relocation logistics.
Fresh from his experiences in building up CashShield, Fundnel and Shopee, Mr Lee and a few other veteran entrepreneurs set up Moovaz to provide logistics software to the market. Going beyond conventional moving, Moovaz provides seamless life-moving, offering their clients a simple experience in relocating overseas. To date, Moovaz has helped more than 10,000 families relocate internationally to every major city in the world, and settle down comfortably.
Trends in the region
Logistics is a behemoth industry, earning USD 8,183.46 billion in revenues in 2015 and is set to increase to USD 15,522.02 billion by 2023, growing at CAGR of 7.5% from 2015-2024 (Prnewswire, 2016). Logistics is particularly important to Singapore, with transportation and storage accounting for 7.6% of Singapore’s GDP in 2016 (Singstat, 2017). However, Mr Lee feels that this industry suffers from a low level of automation. This sentiment was also echoed by Mr Koh Poh Koon, Senior Minister of State, Ministry of Trade & Industry and Ministry of National Development, who said that “existing manual processes and the use of disparate systems that are not interoperable” is hampering communication in the supply chain (The Straits Times, 2017). A PWC study also found that only 28% of Transport & Logistics companies rated themselves as “advanced” as compared to 41% of automotive companies (PWC, 2016).
Even so, Mr Lee does not expect the industry to be plagued by low automation for much longer as the first unicorns of the logistics-tech industry are starting to spring up. In the West, US-based Flexport is nearing a USD 1 billion valuation, handling around 80,000 TEU in 2017, almost triple the volume of 2016 (JOC, 2018). Closer to home, Lalamove, a Hong Kong logistics start-up, raised USD 100 million in funding which places its valuation close to USD 1 billion (South China Morning Post, 2017). Alibaba has also built a logistics unicorn by merging two ground freight startups that it backs; 58 Suyun and GoGoVan (Nikkei Asian Review, 2017).
Temasek Holdings has also signed a memorandum of understanding to set up a 50-50 joint venture with Switzerland-based logistics group, Kuehne+Nagel, to invest in early stage logistics and supply chain technology firms (The Business Times, 2018). Mr Lee says that this is a strong signal of the government’s confidence in building this industry and will lead to more funding in this area.
Mr Lee has also noticed that cost containment is becoming a priority in the logistics industry and harnessing modern technology is the best way forward. In ‘The future of logistics industry’ report by PWC, rising customer expectations were identified as a key area of disruption for the industry. In particular, individuals and businesses expect to get goods at low or no delivery cost and therefore the industry is under growing pressure to deliver better service at an even lower cost, which would only be possible through making maximum and intelligent use of technology (PWC, 2016). Reinforcing the urgency for cost containment, a recent UPS report found that 74% of consumers ranked “free shipping” as the most important delivery option and a FLEXE survey revealed that 56% of online customers abandoned their shopping carts due to shipping fees being too high (FLEXE, 2017).
Mr Lee also expects the rise in the DIY economy to drive more utilisation of technology to enable consumers to take more control over their logistical needs. Technological advancements are quickly rendering middlemen obsolete as we gain access to open source information, allowing us to autonomously perform tasks traditionally outsourced to middleman. For example, with sites like Booking.com, Lonely Planet and thousands of travel blogs, we can plan our own holidays. As a result, brick and mortar travel agents are struggling; a survey by travel search engine Kayak found that only 26% of Singaporeans used a traditional travel agency to plan their holidays (The Straits Times, 2016). In the UK only 19% booked their holidays through a high street travel agent, down from 57% in 2006, while 79% booked their holiday online, up from 35% in 2006 (Express, 2016). In the US, the number of travel agents has also dropped to around 74,000 in 2014 as compared to 124,000 in 2000 (The Atlantic, 2016). Today we can have a parcel delivered to our doorstep with a few clicks, how long will it be before we can do the same with container transport? Olaf Mark, a ports and shipping expert explains this well in his article, where he highlights that the “maritime transport chain is traditionally opaque, non-transparent and fragmented. Ideal for middlemen, such as freight forwarders and other logistics providers, who make a living taking charge of the arduous task of organising smooth supply chains. But progress is also starting to touch the shipping sector, in the form of better information, data exchange and traceability.” (Shipping today, 2016)
Mr Lee has also noticed that with the rise of the gig economy, more people are travelling the world serving short term employments in one country before moving to explore the next country. Therefore, he expects a growth in demand for relocation services. In 2016, independent workers made up around 20-30% of the US and the EU-15 population, which translates to around 162 million people. Additionally, one in six workers in traditional jobs desire becoming primary independent earners (McKinsey & Company, 2016). The gig economy is also gaining ground in Singapore; currently there are around 200,000 freelancers in Singapore, representing around 9% of resident employment. Almost 47% of ITE, 35% of polytechnic and 10% of university graduates took up part-time, temporary or freelance work in 2016, double that of 2006 (The Straits Times, 2017). At the same time millennials all over the world are increasingly becoming professional migrants and in a study by MoveHub, the age range of 18-24 represented the biggest group of professional migrants, accounting for 12.6%. On the other end of the spectrum, the age range of 45-54 came in second, accounting for 11.4% of professional migrants and is typically former global nomads who paused for kids and now have the freedom to move again now that their children are grown up (MoveHub, 2016). The growing desire to work overseas can also be seen in Singaporeans, with almost 213,400 working abroad in 2016 as compared to 157,800 in 2004 (Channel NewsAsia, 2017).
Riding on the trends
As a provider of logistics software, Mr Lee shared that Moovaz is well poised to fill the technological gaps in the logistics industry, especially since the level of competition in the log-tech sector is still low. However with more unicorns springing up and more investors taking notice of this sector, Mr Lee expects competition to heat up soon and thus Moovaz needs to move fast to retain their first-mover advantage. The company has found their niche in targeting the growing market of globe-trotting professionals who are looking to explore the world by serving short term employments in different countries. This mobile group will be in frequent need of relocation services and will be looking to do so as cheaply and autonomously as possible.
To answer this need, Moovaz has created a technology platform with a user-centric interface that integrates and synchronises services globally, returning an all-encompassing package optimised to fulfil unique moving needs at a competitive and transparent price. With this platform, users need only key in their origin, destination, date and items to relocate. From there, Moovaz’s award winning crew takes over and ensures that users can relocate without having to worry about their belongings. In this way, Moovaz is using technology to bring down costs while simplifying the process of relocation, thereby allowing the increasingly mobile population to relocate faster and more conveniently.
From his experience in building new products Garena (SEA)- Shopee, Fundnel, CashShield and now Moovaz, Mr Lee identifies the lack of experience as the key challenge for Singaporeans expanding overseas. Mr Lee shared that many western entrepreneurs already have experience venturing overseas and therefore already have an established strategy and know what to look out for when expanding. Therefore, they have a greater advantage when performing daily functions like hiring, marketing and maintaining team morale in their overseas offices. Additionally, from their forays overseas they have a wider web of connections. However in Singapore, many entrepreneurs are only just starting to expand overseas and may not have the required experience to execute their expansion plans well. In 2016, only 56% of Singaporean companies expanded overseas and in 2017 this percentage rose to 83% – the difference of 27% represents a sizeable group of businesses that are venturing overseas for the first time (SBF, 2018).
Moovaz does not have any overseas offices yet, but in his experience with CashShield, Mr Lee finds that International Enterprise’s (IE) overseas offices are a great help when expanding overseas as they are staffed by Singaporeans who understand the Singaporean perspective of running a business overseas. For example, when CashShield was setting up an office in Berlin, Mr Lee went to the IE office in Frankfurt and with IE’s support, CashShield was able to set up nodes of networks from there which then grew across the country.
Mr Lee has also lauded the Market Readiness Assistance (MRA) Grant for helping to offset their set up cost, which is a key concern for many SMEs looking to expand overseas. In a survey by insurer QBE, 42% of SMEs cited the lack of funds as the main barrier to overseas expansion (Insurance Business, 2018).
Call to Singaporean companies
With a population of only 5.6 million, Singapore rarely tops the world in terms of absolute figures, with the exception of cargo volume. The port of Singapore is the second busiest in the world, handling 33.7 million TEU containers in 2017 (Seatrade-maritime, 2018). This presents a huge opportunity for Singaporean companies to identify areas where technological innovation can improve the supply chain, which will not only allow companies to remain competitive but also cement Singapore’s position as an international trade hub.
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