Ahamove: Vietnam’s Logistics Services Disruptorby Fintechnews Singapore September 28, 2015
Vietnam’s Ahamove, an Uber-like service for logistics, seeks to disrupt the current business models and address the country’s logistics sector’s “severe fragmentation and inefficiency,” according to Phuoc Tran, Co-Founder and Operation Manager at Ahamove.
Similarly to Uber, Ahamove provides users with a platform where truck drivers and consumers can connect. Such a platform not only allows massive process simplification, but also allows consumers to benefit from lower services costs.
In an exclusive interview with Fintechnnews.sg, Tran shares the story behind Ahamove, their purposes, the challenges they had to overcome, and their plans for the coming months.
Fintechnews.sg: Can you please present your startup? What is Ahamove?
Phuoc Tran: Ahamove, an on-demand logistics service, was founded with the mission to address the inefficiency & high cost for consumers. Similar to Uber, Ahamove serves as a platform connecting suppliers & consumers, capitalizing on excess capacity in the economy to create value for suppliers and reduce the cost for consumers.
Vietnam logistics cost is among the highest in the region, presenting a challenge to the country’s economic growth. It constitutes 23-25 % of the country’s GDP in comparison to 17 % in Thailand, and 16% in China.
According to the Vietnam’s General Statistics Office and World Bank’s report, there are 600,000 trucks registered in Vietnam.
In addition, the sector is also plagued with inefficiency. For instance, there are no leading players that set the standards, with 93% of the trucks are owned by individuals.
Such fragmentation creates a market where there is no consistent price, no consistent quality but too many middlemen.
Moreover, with more than 2/3 of the trips return empty after delivery, it adds significant waste to the $7 billion sector that is in need of change.
Fintechnews.sg: How many drivers and customers does Ahamove currently serve?
Phuoc Tran: For drivers, we currently have more than 150 truck drivers.
For customers, we have 4000+ registered customers. In that we have about 1000 small business owners that have registered and used the service.
We’re both growing fast the drivers and customers. We aim to launch in Hanoi by November 2015.
Fintechnews.sg: What is the story behind Ahamove?
Phuoc Tran: Lương Duy Hoài, Ahamove Co-Founder, is the CEO of Giaohangnhanh. He has experience in the logistics sector. He saw and recognized the inefficiency within the sector, such as severe fragmentation, absence of standard process and technology.
Fintechnews.sg: Why this particular business model for the Vietnamese market? What kind of opportunities is Ahamove looking to tap into?
Phuoc Tran: This inefficiency leads to many problems for the consumers: there is no consistent price, no consistent quality, too many middlemen, lack of technology and standard process. Therefore, it is very difficult for consumers to get good trucking service, and the cost is high.
On the other hand, it’s difficult for drivers to find consumers. We have spoken to hundreds of drivers, and they shared with us the same story. Many of them drive for tens of years, and they only rely on 10-15 contacts from small shop owners for business. And often, they don’t have any order for several days.
If one goes on certain streets in Ho Chi Minh and other cities in Vietnam, one will see many trucks lying idly, a resource under-utilized.
These problems create the opportunity for Ahamove to connect and optimize to bring value to drivers and reduce the cost for consumers.
Our team believes technology is the key solution to solve these challenges. We believe creating this platform will create a lot of values for consumers, drivers and society as a whole.
And now we’re realizing and building that belief every day: consumers will get trucking service much easier, for a standard price, standard process and very good quality; at the same time we bring many business/orders to drivers. On average, we reduce the cost for consumers 20-40%; at the same time we increase income for drivers 20-40%.
Ahamove seeks to solve first the intra-city trucking challenge, starting with Ho Chi Minh City and then Hanoi. Afterward, Ahamove plans to roll out inter-city trucking services.
Fintechnews.sg: What are the main challenges Ahamove had to face?
Phuoc Tran: First challenge is the lack of standards within the industry. For instance, truck drivers will charge different prices for different goods, different areas. And the price offered by drivers varies greatly as well. Therefore, to impose a uniform price and service for the driver who join our network presents a challenge at the beginning. However, as we offer more trips for drivers, they begin to accept the uniform price and service.
Second, the lack of standard across the intra-city trucking services presents another challenge. For instance, even for the same truck type, the weight and the volume the customers demand from drivers vary, and the ability to fulfill those demands. Matching the two along an agreed standard is difficult. It’s an ongoing challenge and we’re solving it by educating and supporting both the customers and the drivers
Third challenge is customers’ mindset. For many small shop owners, using a mobile app or a web app to book a truck is new. Therefore, we have to stopped servicing many customers because their refusal to use technology even though they have the capacity (smartphone and Internet).
For those agreed to use, we have to take effort to educate and support them. And this segment is growing as they see the value: they could book a truck at anytime for a uniform price, and expect and uniform service instead of relying on traditional methods of going through many middlemen.
Looking for Funding next Year
Fintechnews.sg: Does Ahamove have any plans on raising a round of funding?
Phuoc Tran: Ahamove plans on raising our first round next year. Specifically we seek to find an active and supportive partner to journey with us to form a win-win partnership.
One of the important elements from the partner is the ability to help us go regional.
Fintechnews.sg: Should we be expecting anything from Ahamove in the next coming months?
Phuoc Tran: After building a good working progress with intra-city trucking service in Ho Chi Minh city, Ahamove plans to expand the range of services to customers.
The new services will be rolled out in the next couple of months. We continuous continue to improve and innovate as these new services will the first, create new standard for the market.
Find out more about Ahamove at http://ahamove.com/.
Phuoc Tran will be speaking during the Young Entrepreneurs Saigon (YES) event on Wednesday 30, September 2015, in Ho Chi Minh City.
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