It promises a delivery speed of four hours.
When HK-based supply chain optimisation platform PICK-UP thought of disrupting the corporate logistics industry late last year, it targeted the weaknesses of traditional couriers: They bore heavy fixed costs with a logistics model that needed a warehouse, vehicles and permanent staff, not to mention a temporary storage storefront and sorting facilities.
It has been a year since PICK-UP launched and it has quickly risen to challenge incumbents with a delivery speed promise of four hours, at a cost comparable to what HK businesses were used to paying.
Crystal Pang, one of the four founders of PICK-UP who leads strategies and products, said a so-called asset light model is at the center of the start-up’s growing number of satisfied e-commerce customers - its other clients include popular online gift shop Gift Something - and increasing daily deliveries that have reached 1,200 in September.
This is why PICK-UP is looking to expand in three key areas with an undisclosed amount of new funding: Add features on its mobile app, a new marketing push for large-size merchants, and branch out its delivery coverage to a couple more cities. (It currently delivers to the entire HK Island, the entire Kowloon, Kwai Ching, Tsuen Wan, Sha Tin and Tseung Kwan O.)
PICK-UP’s asset light model removes the need for warehousing and permanent staff, and instead matches companies and crowdsourced freelance agents, the latter of which executes same-day deliveries.
Operationally, Pang said a proprietary technology assigns agents to delivery requests to speed up dispatching, analyses the most efficient pickup and drop off routes to shorten delivery times, and executes batch and cluster processing to fully utilize capacity and reduce cost.
Meanwhile, for investors, she reckoned this asset light model gives PICK-UP a highly scalable growth model where fixed costs and operational overhead does not rise together with demand.
“We sell homemade food and sauces. Our target is to ensure freshness when delivering to our customers. Express delivery in Hong Kong is expensive, so delivery service has always been our main concern,” said Rosemarie Leung, director of Gerine Fine Food, one of many rave reviews the startup has received. “PICK-UP’s delivery service delights our customers’ experience and reduces our cost, which makes our business more competitive.”
Three expansion areas
Pang revealed there are plans to further improve the platform, which was originally made with only personal contributions from all four co-founders, which aside from Pang includes three other founders, Eric San, Paco Chan and Allon Wong who lead operations, sales & marketing and finance, respectively. The team also pooled funds from “friends and family.”
But fast forward a year, and PICK-UP has raised an undisclosed amount of additional funding, the proceeds of which will be used to expand three key areas, according to Pang.
First, it will to roll out of new version of apps “with more value-added features.” Second, it will launch a new marketing campaign to target large-size merchants and invest resources to facilitate API integration. Third, it plans to expand to 2 more locations or cities.
“One path to further grow our platform and enhance efficiency will be integrating with large e-commerce platform to help them with retail peaks and also partner with traditional couriers during peak periods by providing additional capacity for their distribution," said Pang.
She recalled what happened last year during the peak Christmas and Chinese New Year seasons when PICK-UP was swamped with orders the whole week before Christmas and the team did not have enough delivery agents to handle a ten-fold surge in volume.
“We did not want to upset our users so in the end all seven of us, including three software engineers, plus our good friends went out to help fulfill all the delivery requests and worked tirelessly till midnight to make sure all the packages were delivered," said Pang, although the expansion plans should help ensure such a situation does not repeat this year.
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