GoGoVan founder gets a crash course in management after expanding into mainland China
GoGoVan co-founder Steven Lam Hoi-yuen faced a steep learning curve after entering into a deal that created one of Hong Kong’s first unicorns about 12 months ago.
Lam had to relocate to Beijing after GoGoVan agreed to merge in August last year with the company then known as 58 Suyun, the freight business of mainland Chinese online classifieds giant 58 Home, to help ramp up expansion for the combined enterprise in the world’s second largest economy.
“Even though I’m also [of Chinese ethnicity], the way the [mainland] Chinese and I look at topics and issues are very different,” Lam, who serves as GoGoVan’s chief executive, said in an interview.
“In China it’s more top-down, and iteration is so fast – they execute something and if it doesn’t work then they [iterate] again, whereas outside China there is often a lot of testing before something is launched.”
That move has paid off as the company now operates in more than 300 cities on the mainland, up from around 100 before the merger, to make it one of the biggest players in the country’s highly fragmented intra-city logistics market.
Lam said the company’s business-to-business operations have rapidly developed to include more than a million registered drivers and more than eight million users on the mainland.
“Our B2B business is growing very quickly, at double digits every month right now,” Lam said. He declined to provide specific numbers.
The company is now conducting delivery trials in four mainland cities for Cainiao Network, the logistics arm of e-commerce giant Alibaba Group Holding.
Cainiao became an investor in GoGoVan in July after it took part in a US$250 million funding round for the company. Other investors in that round included the Russia-China Investment Fund, Hongrun Capital, Qianhai Fund of Funds and 58 Daojia Group.
The stakes are high for GoGoVan in China, which is the world’s biggest e-commerce market and where the company is laying the foundation to become the global leader in intra-freight services.
That was the stated goal of GoGoVan and 58 Home executives when they announced in August last year the merger with 58 Suyun, which vaulted the Hong Kong start-up to unicorn status with a valuation of more than US$1 billion.
Hong Kong’s first unicorn was SenseTime Group. Based in the Hong Kong Science Park, the firm achieved a valuation of US$1.5 billion in July last year after completing its US$410 million Series B funding round.
Still, GoGoVan became a sort of poster child for the local start-up community. Lam is often invited to speak at entrepreneurship events and conferences in Hong Kong, where he shares his start-up story.
One of GoGoVan’s ambitions was to eventually list in the city, according to Lam in an interview with South China Morning Post last year. Alibaba is the parent company of the Post.
GoGoVan has had some hiccups in its China expansion. Last month, the company faced an angry backlash from its drivers on the mainland after it rebranded as Kuaigou Dache, which translates to “Hail a ride with Fast Dog”. Drivers had complained that they were on the receiving end from customers of the ultimate Chinese insult – calling a person a canine.
Following the merger, the company had retained the name GoGoVan in Hong Kong and other markets.
“We felt that the name 58 Suyun was too corporate, so we changed it to Kuaigou,” Lam said. “We wanted to convey the message that our brand was reliable and trustworthy. And [the animal] that came to mind was a dog. So Kuaigou basically means quick, efficient dog.”
In spite of protests to the rebranding, Lam said he was sticking by the company’s new brand name.
“We want to become the largest platform in China so that people will think of Kuaigou whenever they want to move goods, whether the items are bulky or small,” he said.
Founded in July 2013, GoGoVan has established a sprawling online logistics and freight operation in 14 cities across six Asian markets. It counts more than 180,000 registered drivers on its mobile application, enabling businesses and individuals to hire a driver with anything from a light-goods vehicle to a 16-tonne truck within seconds.
The company first entered mainland China in 2015 after receiving US$10 million in its Series B funding round from Chinese social media firm Renren. Hong Kong logistics rival Lalamove followed, eventually covering 100 cities.
Outside China, GoGoVan plans to expand into new markets across Southeast Asia.
“We need to have laser focus to do what we’re doing right now to the best [that we can],” Lam said.