Trung Hoang Nguyen, CEO at Loship tells us about prompt delivery services for e-commerce.
First of all, how are you and your family doing in these COVID-19 times?
Trung Hoang Nguyen: We are fine, thank you for asking. I feel lucky to live in one of the safest countries during this crisis. The government has done an excellent job of tackling the outbreak. Some social distancing measures have been implemented, but everything is quickly brought back to normal. Prospects for recovery look bright.
Tell us about you, your career, and how you founded Loship.
Trung Hoang Nguyen: I am a Co-founder & CEO of Loship, a fast-growing one-hour-delivery e-commerce startup in Vietnam. I studied Computer Science at the Korea Advanced Institute of Science and Technology (KAIST) and worked at Microsoft in the Cloud division. In 2012, I returned to Vietnam and founded Lozi – A Food Review App with Buy & Sell Function.
Back then, people used our Lozi App the same way as eBay, where they could list their products, buy from and sell to others. However, we couldn’t really know whether the transaction via Lozi was completed or not, especially when it was purely online chat. The best way to know the exact status of the transaction was to control the delivery. Therefore, we started Loship – a one-hour-delivery e-commerce platform, and it quickly became the biggest part of our business.
How does Loship innovate?
Trung Hoang Nguyen: As said, we started first with Lozi. After 12 months, Lozi attracted about 200,000 users, with the website traffic reaching over 2 million. With its growing success, the investments soon followed, and Lozi quickly attracted some initial funding. Shortly, what first started as the food review site had transformed into a hyperlocal C2C e-commerce platform.
Yet, this initial success was a small piece of the pie, and the scale potential wasn’t obvious. Lozi had in place the buyers, sellers but lacked delivery men. We didn’t know if the transactions were completed or whether any delivery hiccups were happening along the way. The idea of building our delivery fleet started from there. We understood that if we executed right, there was an opportunity for another 1000x growth.
In late 2017, we rolled out Loship, first starting with the food delivery and then quickly expanding to other verticals, including fresh groceries, ride-hailing, laundry, medicine, courier, etc. We found that with the same two-wheeled vehicle, the driver could actually deliver more than just food – basically anything that can fit on or be transported legally by motorcycle. Loship now offers up to 11 on-demand delivery services, with a fleet of more than 70,000 drivers and 200,000 merchants, serving almost 2,000,000 customers across five big cities in Vietnam.
How does the coronavirus pandemic affect your business, and how are you coping?
Trung Hoang Nguyen: 2020 has been a year like no other. COVID-19 came around and altered our lives in ways never seen before. However, food delivery is amongst the few businesses benefitting from the pandemic. In Vietnam, as cities shut down due to social distancing measures, the delivery business like Loship is gaining momentum. People rely on our services to purchase daily necessities such as toothpaste, shampoo, vegetables, etc. So, Loship witnessed more organic growth than ever. We are proud to say that Loship is a rare Vietnamese startup that has achieved double-digit year-on-year growth in 2020.
The downside is that when COVID-19 surged, our access to capital became limited. With investors becoming wary of the pandemic’s economic implications, there has been a significant decline in funding activities, forcing us to change our fundraising strategy completely. We understand that for huge deals, investors will be cautious and want to appraise investment by direct contact, so the possibility of delay is high. Therefore, instead of calling for large rounds of capital, we divided them into small deals, and all discussions have been taking place online via Zoom. With this approach, we have been able to secure investments from several investors right amid the crisis and about to close our Series-C round.
Did you have to make difficult choices regarding human resources, and what are the lessons learned?
Trung Hoang Nguyen: Yes, we always have to make difficult decisions. As a startup, we became even more financially fragile in times of crisis. However, we made a decision not to lay off any employees. Instead, our higher management team made the sacrifice to take voluntary 50% pay cuts to keep the business afloat and ensure that our employees were not affected.
The lesson learned from this? I would say: Life is all about choices; some we regret; some we are proud of. At Loship, we didn’t choose the easy way, and that is what sets us apart. We could choose to furlough employees or slash pay to survive the pandemic, but we said No. People are our most valuable asset, and it’s our responsibility to protect them under any circumstances. Be kind to people who work with you in your business. Do not expel anyone.
How did your customer relationship management evolve? Do you use any specific tools to be efficient?
Trung Hoang Nguyen: One of the core values at Loship is Customer Obsession. From the very beginning, our customer service approach is that the customer is right in all matters and that mistakes are always ours. We don’t aim to meet customer expectations but to exceed them.
We spearhead a culture of listening to and acting on every customer feedback across the organization. We listen to our customers through different platforms such as social media, email inbox, in-app reviews, telephone surveys, etc. – literally every platform to connect with customers. This allows us to focus on what our customers truly want and quickly respond to their queries. This customer-centric mindset is also applied to our service innovation. At Loship, we define innovation as changes that add optimal customer value. We ensure everything we do provides value to the customers, and if it doesn’t, we keep developing until it does.
Did you benefit from any government grants, and did that help keep your business afloat?
Trung Hoang Nguyen: No, that’s not what we are waiting for. It’s a challenging time for us, but also a challenging time for our Government. We understand their burden. We believe it’s our responsibility as National Startup Hero to support the locals and people affected by the crisis and make a positive impact on Vietnamese life during times of uncertainty. It’s time for us to play our part to help our country and Government moving forward during & after Covid-19.
Your final thoughts?
Trung Hoang Nguyen: Vietnam has been relatively under the radar when it comes to startups. The number of Vietnamese unicorns is very few compared to other neighboring countries such as Singapore and Malaysia. But suppose proper investments are made, and the government can further leverage its economic advantages. In that case, there is no reason why Vietnam can’t catch up with or even surpass those regional players. The market is full of potential for breakthroughs, and we feel that Loship has what it takes to become the next unicorn in Vietnam. It’s only a matter of time before we reach that stage.
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