How Giao Hang Nhanh Solves Logistics in Vietnam’s Growing E-commerce Market

In an e-commerce market as huge as Vietnam’s with over 30 big e-commerce players and hundreds of smaller players, logistics and collecting payments are big problems. That’s why Giao Hang Nhanh (GHN), which means “Fast Delivery”, an e-commerce delivery and logistics business, has risen out of this teeming gang of online shops. As far as e-commerce delivery goes, GHN is the first company that comes to mind for most Vietnamese e-merchants. GHN does two things really well: delivery and payment.

I interviewed GHN’s CEO Luong Duy Hoai, to get the scoop on how GHN is doing and what’s up next. The service they offer is quite complex but it solves so many problems at once that it’s worth looking really closely at the model. But first, some numbers.

GHN currently serves over 800 online merchants, over 20 of those merchants are larger scale B2C e-commerce sites like Tiki.vn, Project Lana, MuaFast, Nha Sach Phuong Nam, and Foci, to name a few. Most of GHN’s merchant base comes out of the group buying industry. So far, GHN has delivered over 60,000 orders since its founding early last year, and has 60 staff at last count. Currently, GHN handles over 1.5 billion VND (over $70,000) of transactions per week for its clients and has over 200 million VND ($9,500) of revenue per month.

For merchants, GHN offers three things:

1. 2 to 3 day delivery for 10,000 VND ($0.50)
2. Next-day delivery for 15,000 VND ($0.70)
3. Same-day delivery for 20,000 VND ($1.00)

All these delivery times can be requested from the merchant or customer side. GHN takes orders from multiple merchants, synthesizes them into manageable routes via an internal logistical system and gets them to the specified customers on time via its own fleet of delivery men.

How can a company that serves over 800 merchants, and delivers to 600 to 700 people daily, guarantee anything under 3 days delivery? It’s GHN’s sophisticated logistical system. Currently, e-commerce sites in Vietnam who are not using GHN generally deliver their coupons and goods four days to a week from the initial purchase online.

The logistical infrastructure at work

At first, GHN hired coordinators to develop routes for their trained motorbike delivery guys. These guys would look at routes and orders and plan out the delivery routes for delivery men. But, according to Hoai:

The goal was always to optimize process through technology. We now have coordinators, but our system, now automates 60 percent of all the decisions. Coordinators are freed up to work on other problems. The system plans the route, catalogs the transactions, and keeps track of all the deliveries. In the beginning, we had 10 or 20 deliveries per day, that was easy for one person to organize. Now we have over 500, it’s impossible for one person to organize all that. Our system handles it all.