With the continuous growth of the local e-commerce sector, logistics has become one of the fastest-growing verticals in Bangladesh, with several local logistics players successfully raising investment in the last two years, and even drawing the attention of multinational logistic startups.
According to Tracxn, currently, there are 111 Logistics Tech startups in the country including players like Paperfly, RedX, eCourier and others.
On top of that, three multinational logistics startups- Lalamove, Delhivery, and Ecom Express- have also expanded their operation to Bangladesh in recent years.
Of them, two are Indian logistics startups that are rivals in the neighbouring market and expanded to Bangladesh a year apart from one another.
Indian logistics startup Ecom Express made its very first foreign investment into Dhaka through the local logistic startup Paperfly, in January 2021, investing a whopping Tk100 crore initially, following up with another investment of Tk102 crore earlier this year- taking the total investment by the startup so far to Tk202 crore.
According to TA Krishnan, CEO and co-founder of Ecom Express, the company’s investment reinforces its confidence in the Bangladesh market.
The Indian-based end-to-end technology-enabled logistics solutions provider has a presence in all 29 states of the country and operates in more than 2,650 cities and towns.
On the other hand, initial public offering (IPO)-bound Indian logistics unicorn Delhivery entered Bangladesh in May 2022 to expand beyond its border, even appointing former Chief Business Officer of Grameenphone Kazi Hassan as the Bangladesh Country Head in March this year, as per social media posts.
According to Delhivery, it planned to scale its cross-border business by expanding into Bangladesh and Sri Lanka.
Delhivery was founded in 2011 by Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan, and Kapil Bharati and the company launched its IPO for subscription targeting a $5 billion valuation when it debuted in the public market earlier this year.
Although both the Indian startups expanded their footsteps in Bangladesh, they had taken divergent approaches.
Delhivery, which mostly relied on acquisition as a path for expansion and growth decided to slog it out alone in Bangladesh for now, however, the company may go for an acquisition in the future to strengthen its market position, as per the company.
Previously Delhivery acquired two companies: Spoton Logistics and California-based unmanned aircraft system company Transition Robotics Inc.
On the other hand, Ecom Express appears to be taking a different approach—investing in an existing local player.
Industry insiders said, each approach has its perks, and the coming days will show which approach has been more successful.
For instance, Paperfly, being a local player, enjoys certain advantages and the company already has established business in Bangladesh which would have taken Ecom Express several years as well as meaningful investment to build a similar penetration in Bangladesh, as per industry insiders.
Moreover, there have been several cases across many markets where local players were given access to resources and did better than multinational competitors and to that end, the decision to invest in a local player makes better sense than slogging it out alone.
However, there have been cases such as that of Lalamove, which has been a precedent of success for slogging it out alone and have been successful, they said.
