Albert Go
Regional Director Latam
Startup Contributor

Reactivate the Economy Through Logistics Partners for SMEs

By Albert Go | Thu, 10/07/2021 - 13:11

According to INEGI, the second quarter of 2021 delivered growth of 1.5 percent compared to the first three months of the year and 19.6 percent in its annual comparison, which reveals the progress toward the reactivation of Mexico's economy that was abruptly paused when COVID-19 arrived.

Many SMEs, which represent the main economic and labor force in the country, closed their doors permanently — we are talking about more than 1 million — and others suffered negative impacts, reducing their operations and almost forcing them to modify or renew their ways of operating and continuing to function through the digitalization of purchase, sale, shipping, and consumer experience.

Today, when observing a major push in the economic recovery after the slowdown that occurred at the end of 2020, we see that this step has been driven by the service industry, which grew 2.1 percent in the second quarter compared to the first quarter. But what are the factors that led to this development? A couple can be mentioned: The adoption and use of technological sales channels and the outsourcing of logistics solutions.

These have functioned as a lifeline for commerce, built up many industries, reached new types of consumers and made their transition from single-channel (physical store) to omnichannel behavior, where virtual channels are combined with physical establishments and the use of immediate delivery and on-demand applications, where Lalamove has been a differentiator in safety, efficiency and technological innovation.

While e-commerce caused 60 percent of SMEs to start selling their products through digital channels, last-mile logistics applications rose exponentially. For example, Lalamove has registered 400 percent growth from pre-pandemic levels because we have understood the logistics operations and customer needs in Mexico; we saw that it is an ideal market due to the compatibility of the solutions that we offer.

We have covered the requirements of immediacy and added value in each shipment through an intuitive technological platform that offers more efficient and economical shipments by differentiators that include a multiple stops function, route optimization and mileage charges.

This is seen from the consumer's point of view. If we consider SMEs and how their reactivation has been promoted by logistics companies, we must invariably mention a basic factor: the outsourcing of services.

Outsourcing shipments in a company is synonymous with several things — trust, security, and development, among the most important. As a small and medium-sized business, having an expert immediate shipping service means breaking with the entrenched idea that logistics fleets are only for large corporations.

Whether it is a store with 20 employees or 100 and more, having a platform that provides solutions for same-day or on-demand orders will not only give entrepreneurs greater confidence but will also extend their spectrum of services and allow them to optimize their resources and their time, as they won’t have to worry about managing shipments. Instead, they can leave this last step of the supply chain in the hands of professionals, which is essential in determining a repeat purchase or a lost customer.

Lalamove's outsourcing experience has proven to be successful because we have grown hand in hand with the Mexican market and its consumers. We have learned how to take advantage of our technology to solve one of the main challenges in the country: keeping the operation as simple as possible and accessible for any entrepreneur who needs its services. Thanks to this, we are strategic allies of 2,000 companies for which we make 20,000 deliveries per month.

There has been a great deal of speculation about the survival of the shipping industry when commerce is fully reopened; however, the answer is clear. The estimates for the immediate future are more than encouraging, foreseeing activity that will invoice just over US$2 billion and that will attract more than 34 million users in 2022 in Mexico. We will not only help to reactivate the economic spectrum faster but we will also be vital players in the business opening.

Photo by:   Albert Go