What happens if you identify an operating issue that has cut deeply into your company’s profit? The best staff, of course, try to help their companies solve the problem. The most entrepreneurial ones, however, will turn it into an opportunity for their own business venture. This is what has happened in the case of Huang Zhen, a former executive of Alibaba.
Zhen got her start at the telecoms equipment giant Huawei, having been put in charge of its overseas sales in Africa in 2008. Before long, she was dispatched to the Middle East. In 2015, she changed direction, signing up as the chief technology officer of a joint venture between Alibaba Cloud and the United Arab Emirates (UAE) company Meraas.
Two years later, having come to know first hand how last-mile deliveries had become the bottleneck in Alibaba’s expansion in the Middle East, she resigned.
Huang founded a courier company called iMile that focused on the Middle East, where e-commerce sales were starting to flourish. The goal, she declared, was to be the SF Express of the region. While that might have sounded ambitious, the start-up was already reporting revenues of Rmb1 billion ($157.3 million) by 2021 and it expects to rake in five times that amount this year.
iMile’s sales area already encompasses 60% of the Middle East countries, with a list of cross-border clients including Amazon, SheIn and Zain, to name but a few. Its business model is based around sellers from China that deliver their packages into a consolidation warehouse. Once the packages are received, they are forwarded to Dubai, where iMile is based. After customs clearance, the merchandise heads for one of iMile’s warehouses and a fulfilment team, which take care of last-mile delivery.
“For anyone familiar with the Middle East, we are like a little Aramex,” Huang says, comparing her company with the Dubai-listed courier. “We offer express delivery, mainly from China to the Middle East, and other B2B services. The starting point for setting up the company was to solve the problem of end-delivery of e-commerce in the Middle East, especially the cash-on-delivery business.”
The e-commerce market in the Middle East is still at an earlier stage of development. In 2020, internet sales in the region were just $22.2 billion, although they are expected to reach $50 billion in 2025.
“As much as 80% of the goods purchased by Middle Easterners on e-commerce platforms come from China. Locally, there are also a lot of Chinese e-commerce platforms. But a common problem they encounter is that they can’t find couriers that really understand their needs,” Huang explained to Entrepreneur, a magazine.
Cash-on-delivery – the preferred mode of payment for e-commerce purchases in the Middle East – makes the delivery process more complicated. To ensure a quality service, iMile has assembled its own team of delivery staff, with a dedicated department that handles the payments by the end customers.
Investors have been taking heed of iMile’s success. Internet giant Bytedance invested in the company in a financing round, which valued the courier firm at $350 million.
At the moment, iMile has two R&D centres – for mapping out delivery locations – in Shenzhen and Hangzhou. It has built an operations team of more than 600 people at home and abroad, employing more than 5,000 delivery drivers too. It also plans to expand into other markets including Egypt, Kuwait and Morocco – using the proceeds of the Bytedance fundraising.
iMile’s growth is also making it a target for challengers. In February, Yicai reported that logistics giant SF Express had partnered with Saudi Arabian conglomerate Ajlan & Bros Holding Group to launch a logistics joint venture. The JV, called AJEX, will provide distribution services in the Kingdom and across the wider Middle East region. Headquartered in the Saudi capital Riyadh, the new logistics platform wants to promote bilateral trade with China, broaden the reach of the Chinese e-commerce players, and help local consumers and businesses to buy more goods online. To iMile that will sound a familiar strategy…
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