Good entrepreneurs will realise that logistics is an important part of a business’ day-to-day running.
Logistics involves everything from acquisition from wholesalers and suppliers to manufacturing, storage and delivery to customers. It can be said to be the lifeblood of the economy – carrying oxygen from organ to organ.
With the COVID-19 pandemic, logistics is even more in demand than ever. The supply chain disruption that happened as a result of pandemic-related lockdowns across the region underscored just how reliant our modern economy is on logistics.
At the same time, Gartner has predicted that 50 percent of the large global companies will use advanced analytics, IoT and AI in their supply chain operations. The use of such smart data analytics will result in increased efficiencies for the logistics sector, where companies have to make every advantage count, amidst razor thin margins and time-sensitive deliveries.
An Untapped Market
Perhaps the most visible part of logistics for the average person is the tech-based delivery services like Foodpanda, Deliveroo, or Grab. Their businesses focus on the ultra-competitive B2C sector, with slim margins and increasing customer expectations.
On the other hand, the B2B logistics market is still lacking in its last-mile capability. Caelus Asset Management, a boutique asset management firm based in Hong Kong, is investing in this future with Zeek, a smart B2B last-mile solution provider from Hong Kong, which is a brand under Kin Shun Information Technology Limited.
“Zeek competes in a different market segment compared with Foodpanda or Deliveroo. Instead of delivering to the end user, Zeek’s customers are the restaurant or food manufacturer themselves,” explains Carl Chan, co-founder of Caelus Asset Management Limited.
As a Hong Kong-based logistics solutions provider, Zeek is also seeking to expand its operations in Singapore, Malaysia, Thailand, and Vietnam. “We can see that Zeek is doing well in Hong Kong, and they have picked Southeast Asia to expand to. As long as they can fully utilise their technologies and stay true to their business model, I believe they can succeed,” says Chan.
Looking for Synergies, Resonating with Investors
Aside from operating in an underserved niche, Zeek also utilises sophisticated AI to improve their delivery service to best match drivers, loads, and destinations to increase efficiency in this area. As employee costs are half of the total operational costs, Zeek is investing resources to optimise resource usage and expand clients’ application scenarios of its services.
Through the development of smart logistics data, Zeek aims to strengthen customer loyalty and stickiness as well as to build competitive barriers.
But more than that, Caelus’ collaboration with Zeek’s use of AI can also unlock synergies in other sectors. As a proactive investor, Caelus takes the initiative to help its portfolio companies expand their business with its strong business networks, which serves to also secure a higher return for investors.
“We are investors in other Hong Kong-based AI development companies, so we want to bring them together to cooperate and further develop AI,” said Chan. “We also have partners in the medical sector, and not many people know that logistics is critical to this sector. For example, delivery of medicines or medical devices needs to be fast and secure. And some may require specialized storage and handling permits to comply with local regulations,” he explains.
For Caelus, investing in such technology goes beyond just investor returns. Chan says, “We focus on investments that have an impact on our everyday lives. In terms of investment, as well as the collaborations that we seek, we look for innovative models that do not compete directly with established players. This also resonates with our investors as they can really ‘see’ the demand as a secure investment.”
“For logistics services, it is of course used every day – and Zeek has already broke even, compared to other loss-making platforms. We want to emphasise our strengths so that we can help our portfolio companies to grow and explore other opportunities,” adds Chan.
Established and headquartered in Hong Kong, Caelus Asset Management Limited (aka “Caelus”) is an independent asset management firm committed to serving institutional investors, family offices and affluent individuals across Asia. As a boutique asset manager, we focus on investment placements that deliver active value appreciation and sustainable absolute return. We form alliances with professional partners around the world and offer off-market investment projects to our private clientele. Our expertise in financial and multiple business sectors allows us to have a unique perspective and always invest with assurance.
Licensed by the Securities and Futures Commission of Hong Kong to conduct Type 4 (Advising on Securities) and Type 9 (Asset Management) regulated activities, we offer various Private Equity Funds, External Asset Management and Discretionary Portfolio Management services— designed to grow and safeguard our clients’ wealth.
The information is provided for general information purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service. Investments involve risks and your investment may suffer significant losses. Investors are advised to seek independent professional advice before making any investment decisions.