Delivery Start-ups Born Out of Opportunities to Solve Problems
11 Jan 2023 • 3 min Read
Clarence Leong, co-founder and CEO of EasyParcel and Pgeon, says being a newcomer and an outsider to the age-old logistics industry was not a concern when he decided to establish start-ups providing delivery services.
“My focus then and now is to address pain points experienced by businesses that want to deliver to their customers. I never thought about shaking up the logistics industry or that my ideas won’t be accepted. I just wanted to offer something that would make the lives of my customers — mostly micro, small and medium enterprises (MSMEs) — a little easier,” he says.
EasyParcel is an online booking platform for parcel delivery while Pgeon is a last-mile delivery service provider. These are just two of a number of start-ups founded by Leong, a self-proclaimed serial entrepreneur who had left a high-paying job as an aeronautical engineer in the UK in 2010 to “do something different” back in his hometown of Penang.
“Working in aerospace is very lucrative and I was living my parents’ dream. But it got to a stage where I had to drag myself to work every day. I was 30 years old when I told my parents that I would come back to Malaysia and start afresh on a different journey. Of course, they didn’t understand my motivations but they agreed,” says the 41-year-old.
After establishing a few start-ups, Leong launched EasyParcel in 2014. The integrated online booking platform for courier services had a business model that was new to the region. At the time, small businesses had to approach each courier company for a delivery quote if they wanted to send parcels to their customers. This was a labour-intensive, time-consuming and tedious process that Leong aimed to fix.
With EasyParcel, business owners get a quick overview of which courier company can send their shipment and how much it would cost. Deliveries are worldwide and there are optional services that Leong and his team of employees have launched to make the process even easier for their customers. There are features that allow customers to print, instead of write, air waybills that are to be attached to their parcels; free collection or drop-off services; marketing tools; an online function that provides a single overview of the status of all their deliveries; and e-commerce integrations that eliminate data entry.
“My motivations for starting and running start-ups have changed over the years. At the beginning, it was all about me and how I wanted a change from being an employee. What drives me now is the team of people who work with me. I think of them and their families when I make decisions these days. They are my primary motivation,” says Leong.
Pgeon and EasyParcel have a collective headcount of 500 people across the country. Both companies operate out of Penang but decisions are made on virtual platforms that connect Leong and his young team. Being an early mover in the logistics online booking platform space meant that Leong had to explain his delivery services to business owners. Many did not have any experience using the internet to send parcels to customers. As with many newcomers, he faced the arduous task of changing the way things were done.
“In the early days, businesses did not pay for their deliveries in advance. A business would send a parcel and pay after it was delivered. So using a platform that had a prepaid model required a change in mindset — something that is not easy to do. Looking back, I realise that I could only have come up with these ideas because I did not have any experience in the traditional logistics industry. These ideas sprung from a desire to solve problems,” says Leong.
He continues to practise this approach as he launches new features and services. The ability to keep offering new solutions is a competitive strength. For example, during the pandemic, he launched PgeonMart, an online marketplace for neighbourhood grocery shops and food stalls, and PgeonFLEX, a programme to hire freelance riders. He recently launched Pgeon Paperless delivery to assist small businesses, his main target market, that do not have access to a printer.
Pgeon was established five years ago with the aim of making delivery collection even more convenient for receivers. By partnering with retail brands such as 7-Eleven, myNews, 99 Speedmart and Caltex Malaysia, the service allows its customers — the recipients of packages — to use the brand’s outlets as a receiving centre. This does away with the problem of not being home when parcels are delivered. The company established 3,000 Pgeon Points, or receiving centres, across the country in just one year, and has now grown to 5,000 Pgeon Points. “Any physical retail outlet can be our partner. We have a Pgeon Store agency programme that allows business owners to earn extra income from parcel delivery, an e-commerce trend that has picked up since the start of the pandemic,” says Leong.
To further strengthen Pgeon’s offerings, the company acquired 326 commercial vehicles, mostly one-tonne trucks, in October last year. These vehicles will increase its delivery capacity by at least five times — a move that Leong hopes will establish the start-up as one of the top self-service drop-off and pick-up service companies in the country.
Leong has completed two rounds of funding to date. The first round was completed in 2015 while the second round, opened to strategic investors, was in 2019. Then, AirAsia Group Bhd’s cargo and logistics arm, Teleport, and venture capital firm Gobi Partners invested in EasyParcel. This partnership has allowed the start-up to leverage Teleport’s logistics and infrastructure capabilities to deliver to more than 100 cities. EasyParcel currently has a footprint in Thailand, Malaysia, Singapore and Indonesia.
“Unlike many tech start-ups, we haven’t asked for a lot of funding. We have taken our time to build our operations and be profitable instead of relying on investors to sustain the business,” says Leong.
“There is a possibility of fundraising in the future as we look to evolve into a one-stop shop for delivery solutions. That is our goal and I think it will be an interesting journey as the logistics industry is evolving rapidly with many more players in the game. More competition will benefit the customer and that is good for the industry and for all delivery providers.”
This article was contributed by Elaine Boey
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