Shing Chow, the founder of on-demand trucking service provider Lalamove, was not an exceptional student during his childhood in Hong Kong. However, he caught up right before graduation, scoring at the top of his class to gain a prestigious admission at Stanford University.
At Stanford, he spent one year studying physics. However, he quickly grew tired of the subject for its finite nature, where every question has a formula and concrete answer. In search of solving more dynamic and multidimensional problems, he decided to study economics instead.
Upon graduation from Stanford’s School of Economics in 1999, Chow joined Bain and Company, where he worked as a management consultant for three years. Yet, Chow found again another passion—Texas Holdem poker— and in 2002, he decided to quit his job to focus full-time on becoming a professional online gambler.
Unconventional path to pro poker player
Chow would sometimes play in eight different games simultaneously to maximize his experience, using data analytics software to gain further insights. In an interview with e27 in 2015, he cited economist Malcolm Gladwell’s 10,000-hour rule to explain that he only needed to play poker 10 to 12 hours per day, for a few years, to become pro. It only took him three years to start profiting from gambling, and he could hit as much as HKD 1 million (USD 128,855) in good months, he said.
However, the Unlawful Internet Gambling Enforcement Act (UIGEA), introduced in the US in 2006, banned online gambling and stunted Chow’s lucrative habit. Undeterred, he swiftly jetted to Macau, China’s version of Las Vegas, where he continued playing in the smoke-filled casinos of the former Portuguese colony.
By the end of his seven-year career as a pro poker player, 32-year-old Chow’s winnings totaled over HKD 30 million (USD 3.87 million). Yet, Chow was again itching for a new challenge to inspire him.
Going all-in on freight transport
With his accumulated fortune, Chow decided to return to Hong Kong where he bought a dozen apartments in 2009. Hong Kong’s real estate was in a trough following the global financial crisis and Chow’s speculation began to pay off as the economy recovered, eventually turning the investment into a resounding success.
Despite his good fortune in real estate, Chow detested the idle nature of the business, and in 2013, he spotted an opportunity in the burgeoning mobile internet industry, after realizing how rapidly upstart passenger transport companies like Uber and Didi were growing in China. Yet, he saw a greater business potential in the then traditional and low-tech freight logistics sector, as reported in a recent article by AI Finance.
“There were 1.35 million taxis in China, but 20 million freight vans. The efficiency of those 20 million vans was very low,” Chow said.
Uber and Didi’s matching platform could complete between 40 and 60 orders a day, more than twice the efficiency of regular cab drivers, he noticed. In the freight market, instead, van drivers would finalize just about three orders per day, with long periods spent sleeping in the car waiting for the next order.
In October of 2013, Chow, with his typically high-risk attitude, sold all of his real estate holdings in Hong Kong to finance a new freight transport matching platform, EasyVan, which will be later known as Lalamove.
Chow’s ambitions were tempered for the time being. He imposed a strict “996” working schedule for programmers to complete the first EasyVan app in eight weeks. The app was an innovative Uber-style platform that allowed customers and delivery drivers to directly connect, facilitating on-demand, same-day, delivery and moving services within Hong Kong.
Chow’s early approach to leading Lalamove was also volatile and erratic. He hastily launched an expansion into Japan within the company’s first month of activity but was forced to retreat and accept significant losses on the venture. Still, that was just a lost shot in Chow’s expansion plans, as Lalamove would grow to serve over 7 million users across Asia, Latin America, and the US.
During its early stage, Chow had a tight budget and little room for marketing activities, so his team adopted an unconventional approach: employees were going to the streets with signs and portable billboards to promote the app. In 2014, Chow unintentionally even scored a viral video that amassed over 1 million views on YouTube, thanks to senior executive Matthew Tan being filmed while dancing with Lalamove’s advertising on two trucks. The video gave the firm some early notoriety in Hong Kong.
By the end of 2014, EasyVan announced its expansion into mainland China and Southeast Asia through two independent brands and apps: Huolala for China, and Lalamove for Southeast Asia.
Expansion in China
For Chow, the Chinese market represented an enormous opportunity, but the company faced stiff competition from rivals like Manbang. To further complicate matters, Chow, who was born in Guandong, China, but moved at the age of three to Hong Kong, spoke slightly awkward Mandarin, according to a report from AI and Finance in 2017.
To make inroads in the Chinese market, Chow’s company adopted again a crude offline marketing approach. The company hired a team of young women to lure China’s predominantly old male population of truck drivers onto the Huolala app. Lalamove’s female staff and other executives would target areas usually frequented by drivers like local food stalls to promote the benefits of on-demand order matching on Huolala.
The company also had notably loose requirements for drivers’ to sign up to the platform. It did not ask for prior experience transporting freight cargo, and only required drivers to submit a copy of their driving licenses. Applicants would then need to attend a training course of only a few hours to join the company.
These efforts were largely successful and the company was able to register enough drivers to entice investors into financing the company’s USD 10 million pre-Series A round in January 2015.
Since then, the firm’s growth has been swift. Within seven years, it expanded from Guangzhou and Shenzhen, where it first started operations in China, to 352 Chinese cities. Huolala currently occupies a 54% share of China’s USD 153 billion intra-city freight market, thanks to its network of over 2 million drivers in China.
Guiyang-based Manbang, backed by high-profile investors like Google and Tencent, and Didi Freight, the on-demand trucking unit by Chinese ride-hailing giant Didi Chuxing, are Lalamove’s main competitors in China.
While it remains a competitive player in China, Lalamove has also expanded to 24 international markets. The firm first launched operations in major cities across Southeast Asia such as Kuala Lumpur, Manila, Hanoi, and Bangkok, among others.
In the region, on top of its regular offerings, Lalamove also offers food delivery services for restaurants and businesses. In fact, the company mainly targets small and medium-sized enterprise clients (SMEs), which account for 50% of the platform’s user base and 85% of the firms’ revenue outside of China.
In 2019, Lalamove reached unicorn status after closing a USD 300 million Series D round. The firm later forayed into Latin America, with the launch of operations in Brazil and Mexico. When the COVID-19 pandemic hit in 2020, despite experiencing a 93% drop in shipment volume during the first months of the year, Lalamove also saw an opportunity in the US market, where it expanded in August, opening operations in the Dallas-Fort Worth area, a major hub for distribution and logistics.
Tightening internal compliance
Despite Lalamove’s scale and status as a decacorn, the company’s internal compliance and safety standards remained lackluster. In the wake of a scandal involving the death of a 23-year-old user in China in February, Lalamove has been forced to tighten background checks for drivers and implement security measures in its vehicles.
While companies like Didi and Uber may have inspired Chow to initially enter the transport and logistics market, he failed to heed the warning, as the ride-hailing giants were hit with similar scandals over lack of safety measures years before.
Since the incident, Chow has revamped the team’s internal security measures and announced the designation of an emergency response team, led by him, to handle any crises that may arise during transactions on the platform.
The move could seek to reassure investors in what is a hugely capital-intensive sector. Less than a decade old, Lalamove has raised nearly 10 rounds of financing in total, collecting over USD 976.5 million from investors such as Sequoia Capital China, Hillhouse Capital, and Shunwei Capital.
Chow has denied any plans for a public listing “within 10 years.” He prefers to not talk about profitability. “Because the current estimate is also a gross estimate, so I’m still conservative,” he said in a rare interview with financial media outlet Ran Cai Jing in February 2020.
The Lalamove founder has maintained a low public profile, yet he has never lacked ambition or confidence. Leading Lalamove into new markets while competing against resource-rich rivals in China is another exciting challenge for him, rather than a daunting obstacle.
“Too much pursuit of short-term interests can affect the company. The mentality of our staff will also affect the behavior of the company. So I have always instilled a concept: we hope to do a long-term thing,” he added.