Shopify Partners with Australian Logistics Tech Startup Shippit. Co-Founder Will On says the aim is to expand into Malaysia, Philippines, and Indonesia in the near future, with a focus on talent that has a deep understanding of local markets.
Logistics SaaS startup opened its doors in Singapore this quarter, after partnering with Shopify to launch its Cash-on-Delivery model for Southeast Asian merchants and retailers.
In a region where three-quarters of consumers are unbanked or underbanked and e-Commerce is becoming a daily necessity due to COVID-19 Shippit claims its the first shipping platform in Asia to provide carbon neutral deliveries on all shipments completed through Shippit, at no extra cost.
Using Singapore as a launchpad, Shippit aims to accelerate the Southeast Asian e-Commerce industry valued at USD 38 billion in 2019. Founded in Australia in 2014, the logistics SaaS company, says it raised almost USD 10 million, led by Asian investment firm Aura Group.
By using automation and machine learning to simplify the order fulfilment process, Shippit claims it serves more than 6,000 customers a month across Australia, New Zealand, and Southeast Asia, powering delivery for Sephora, UNIQLO, Cotton On and Harvey Norman among others.
According to Shippit Director of MD Lavneesh Arora, Southeast Asia presents a huge opportunity for Shippit with an internet economy expected to more than double to USD 150 billion by 2025 — it also presents a big challenge: as a region with about 296 million (74%) of the population either unbanked or underbanked, cash is still largely king. This is especially relevant now, as the pandemic made e-Commerce a daily necessity.
“Southeast Asia has one of the fastest growing internet economies in the world, and due to the Covid-19 pandemic, we’ve seen a rapid acceleration of e-Commerce, with many businesses realising they need to go online. However, we’ve also seen the majority in Southeast Asia are still heavily reliant on cash over credit cards and online banking. Shippit can be seen as an e-Commerce enabler: by providing Cash On Delivery as a new service, we allow online retailers like Shopify to access a huge section of the market that they would not be able to reach,” says Arora.
According to Arora, logistics is a sector that has seen opportunities amid the crisis. Since nationwide lockdowns were implemented due to the Covid-19 pandemic, Shippit claims it saw a 400% increase in online purchasing rates in Australia from April 2020.
Arora claims delivery volume growth has broken records previously set by Black Friday and Cyber Monday — which are typically the biggest shopping events in the year. This same trend is also seen in Southeast Asia markets with more turning to e-Commerce platforms, a trend that will likely continue even after the Covid-19 pandemic ends.
Shippit says its Cash On Delivery (COD) service is specially designed for the Southeast Asian market. Through its partnership with Shopify, Shippit says its will immediately offer COD as a payment option regardless of order volume or business size. Shopify retailers also do not need to negotiate COD rates with their couriers, as this is taken care of on Shippit’s end automatically. To better help partners on the platform scale internationally, Shippit says it also has instant discounted rates for regular cross-border delivery.
Shippit also claims it is committed to a future of sustainable retail, and says it offsets 100% of the carbon emissions for all deliveries at no extra cost. It does this by purchasing carbon offsets to support projects that prevent and reduce greenhouse gas emissions.
Arora says Singapore has one of the most active online buyers in the region, with 2 out of 3 Singaporeans purchasing products online at least once a year, and an internet economy worth USD 12 billion in value, and expected to more than double to approximately USD 27 billion by 2025.