Diverging IPO fortunes of two Asian logistics giants

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Hello reader,

As economies around the world look to cool off amid red-hot inflation, Southeast Asia’s digital economy is steaming ahead, reaching US$200 billion in gross merchandise value (GMV) in 2022 – three years earlier than expected. This figure could skyrocket to as much as US$1 trillion by 2030.

Ecommerce remains the digital economy’s biggest driver of growth, contributing US$131 billion in GMV this year. Moreover, the sector is still relatively nascent in Southeast Asia, with 100 million of the region’s more than 460 million internet users just coming online over the past three years.

Coupled with Southeast Asia’s increasing mobile penetration, it is little wonder that VCs are confidently making bold predictions such as claiming “the shift to online is inevitable.”

However, ecommerce needs more than just a sound internet connection to boom. Logistics is the backbone of any ecommerce ecosystem but hardly grabs the spotlight as it’s usually just a means to an end for the end consumer.

Personally, tracking my food order on delivery apps is the only kind of logistics that excites me.

Nonetheless, the more than hundred logistics players and enablers in Southeast Asia play a key role in keeping online services afloat and the supply chain from crumbling. That brings us to two logistics titans that are vital cogs in their respective markets: India’s Delhivery (DELH, NSE) and Hong Kong-headquartered GogoX (2246, HKG).

In today’s featured piece, my colleague, Simon, highlights the contrasting fortunes faced by these two firms after their public listings earlier this year.

From the repercussions of rich valuations to the headwinds of the markets they operate in, the premium story touches on a host of factors to dissect why GogoX’s shares have fallen off a cliff while Delhivery has managed to keep the boat steady – at least until a lackluster quarterly report undermined a healthy start in public markets.

— Shravanth

THE BIG STORY

Image credit: Timmy Loen

GogoX and Delhivery: A tale of two logistics IPOs
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