As demand for e-commerce and prime delivery standards continues to advance in Southeast Asia, cloud-based logistics solutions provider Locad announced plans to feed $11 million it raised from its Series A round to build the region’s largest fulfillment network dedicated for the e-commerce supply chain.
To realize its ambition of being the preferred logistics engine of e-commerce brands across multiple sales platforms like Lazada and TikTok Shop, Locad said the fund will be funneled towards the acquisition of new warehouses, forging partnerships with transport operators, and growing its talent pool in both Southeast Asia and Australia.
“E-commerce has reached an inflection point, and supply chains are pressured to adapt. The e-commerce share of retail is reaching 10-20% for Southeast Asia and Australia. This requires consumer brands to fundamentally redesign supply chains,” Locad co-founder and chief operating officer Jannis Dargel stated in a product presentation.
In an International Trade Administration report dated Q3 of 2022, the $17 billion e-commerce market sales for the Philippines in 2021 is largely attributable to its 73 million active users, while the top platforms include Shopee, Lazada, Zalora, and BeautyMNL.
Driven by the swell of omnichannel retailing and the increased internet penetration in developing countries, P&S Intelligence says that the last mile delivery market is projected to hit $121.2 billion by 2030, currently valued at $27.1 billion in 2022.
“A localized fulfillment is key to shorten the last mile leading to faster and cheaper delivery. Locad enables frictionless e-commerce globally. Our fulfillment is powered by technology and local distribution,” Dargel added.
By onboarding upstart direct-to-consumer brands to its multi-regional supply chain network, these companies are able to tap into a reservoir of consumers and sales channels without shelling out a significant upfront investment for launching in new markets.
“Our brands enjoy a transparent platform with real-time visibility across their sales, fulfillment, and inventory. Through Locad, our deliveries reach customers faster, we reduce shipping costs, we provide access to variable warehouse capacity, and we reduce fixed operating costs in the supply chain,” he explained.
The $11 million Series A funding round was led by Reefknot Investments — a joint venture capital fund by Singaporean sovereign fund Temasek and global logistics company Kuehne & Nagel. Since its 2020 launch, the company has served over 200 brands beyond the Philippines — in Singapore, Thailand, Hong Kong, and Australia.
According to Locad chief executive officer and co-founder Constantin Robertz, higher customer expectations for quicker delivery timelines and the complexity of managing a brand across multiple platforms has exposed a need for better supply chain and fulfillment infrastructure, changing the way omnichannel retail operates.
“Ultimately, our goal is to enable a frictionless movement of physical goods and data across the supply chain for SME and enterprise brands, enabling anyone to sell anywhere, on any sales channel, and deliver seamlessly,” he continued.
Since the company started out in the Philippines, it already has fulfillment centers setup in Luzon, Visayas, and Mindanao. Locad’s warehouse network caters to next-day deliveries in Tier 1 to 3 cities and is available to brands and merchants via a single integrated platform.