Locad to build more warehouses in Manila, VisMin

LOGISTICS COMPANY Locad is looking to expand its warehouse footprint in the Philippines to further ramp up its capacity and provide cheaper services in the Visayas-Mindanao (VisMin) region.

“So, in the Philippines, we currently have eight [warehouses] and we’re looking at a couple of additional warehouses, both in Metro Manila to further ramp up our capacity, and potentially in one or two provincial cities,” Locad Chief Executive and Co-Founder Constantin Robertz told reporters on the sidelines of the Philippine Global E-commerce Summit.

“We are looking at cities, especially in VisMin where we have a lot of demand and where currently the lead times and the cost of shipping are proportionally high because they’re further away from existing warehouses,” he added.

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Mr. Robertz said it is unfair that people in Metro Manila get their shipments faster and cheaper, while people in the provinces have to wait longer and pay higher for their items.

“Why would I pay three times for shipping and why wait four times as long? That’s not a good experience. And for a brand or a merchant, it’s too hard to open all these warehouses all over the country yourself,” he said. “The only ones who manage that are the biggest global FMCG (fast-moving consumer goods) brands.”

“So, we want to expand that network and make it open for anyone, so merchants can just leverage on our warehousing network — place their stock in any of our warehouses and pay only for the items that are in the warehouse at no fixed cost,” he added.

Locad currently has 20 warehouses in its portfolio distributed across the Philippines, Southeast Asia, and Australia.

“What we’ve ultimately done and what we are doing with the funds we raised is to continuously expand the platform on the technology side and also add new warehouses in the region,” Mr. Robertz said, referring to the $11 million the company raised early this year.

“We expect to double our footprint of warehouses in the next year and make that available to more and more brands and provide that scalable backend infrastructure for commerce that is available plug and play for any brand-new merchant,” he added.

The Philippines is still the biggest market of Locad, followed by Australia and Singapore. Meanwhile, it expects growth in Thailand, Indonesia, and Malaysia.

“The Philippines is still what we consider our home market, because it’s where we have the biggest team and when we first launched, and it continues to be our biggest market to date, followed by Australia and Singapore,” said Mr. Robertz.

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“We’re seeing good growth in our newest markets, which is Thailand, Indonesia and Malaysia. But of course, they’re still slower because they just opened more recently,” he added.

Despite growth in other countries, Mr. Robertz said the Philippines will continue be one of Locad’s top markets.

“We are seeing good growth here, with Philippine e-commerce growing about 15% this year to $16 billion to $17 billion. So, we definitely still see a lot more growth potential here, and we have the deepest market penetration — the strongest presence — in the Philippines,” he said.

“But of course, as other markets like Indonesia and Australia are getting more mature, given the size of these markets… But the Philippines is our largest market to date and will definitely remain one of our most important markets over time,”  Mr. Robertz added.

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The article was originally published in Business World and written by Justine Irish D. Tabile

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