【Start-up】Shadow Express: How Start-up
With the constantly increasing demand of online shopping, a small express company is targeting a niche market to tap its growth. Shadow Express, a newcomer of the market, is modifying the service of traditional door-to-door express in order to provide a competitive price and specialized service for university students, a major crowd of China online shoppers in Hong Kong.
Founded by two graduated master students from The Chinese University of Hong Kong, Shadow hit the market with surprisingly low freight fees against ordinary express firms like Sf-express. For the sake of reducing delivery costs, Shadow Express set up service points in several designated locations instead of providing home delivery service.
Targeting at university students, Shadow Express has set up delivery stations in 8 universities up till now. Bill Leung, a university student, explained why he chose Shadow Express rather than Sf-express. “It is convenient enough that I can receive my purchase in campus, so I don’t need to pay extra money for a home delivery service. And Shadow Express provides nice service including receiving goods punctually every time,” said Leung.
As a co-founder of Shadow, Allen Yang Yu-ren, mentioned how he started the business: “At first, I noticed that universities students shop online most. But they have to suffer from an expensive fee for a home delivery service. Why not all students just pick up their goods on campus? It’s both cheap and convenient.”
Yang also revealed that their business model is quite similar to carpooling service which provided by Didi — a mainland-based company that recently acquired Uber’s business in China.
Allen, the founder of Shadow, in an innovation awards.
The new business model cut its cost by sharing the order of one customer with others, the same as carpooling which people share their journey. Different customers’ goods are first delivered to the company’s warehouse in Shenzhen, then the company re-packages them as a whole based on destinations, which is different from traditional express companies that every order is separated with each other.
The company got their private equity funds soon after Yang and his partners took part in several innovative technology competitions. All start from scratch, the founders open up their website, employ a full-time driver team, rent warehouses in Shenzhen and Hong Kong. ‘It was tough at first especially I knew nothing about how to operate a logistics firm. We nearly prepared for half a year before the business started,’ said Yang. The business came into being in September 2016 and, surprisingly, active users rapidly rose to more than 7,000 within 4 months, which was beyond Yang’s expectation.
“Even for myself, it was hard to believe the rapidly rising amount of users.” said Yang. “I think the reason underlying is that we have an accurate target, which means we know what university students want.” Understanding students’ need is one of the Shadow advantages, which allows them to provide better service to these customers.
Meanwhile, Shadow Express has also launched a registration system. The company, then, can analyze people’s buying habits based on the countless information database so as to improve its service, as well as customize service. Recently, Shadow Express found out several kinds of snacks that are expressed most. The new finding leads the company to negotiate with the brands to sell the products directly with a lower price on Shadow’s platform, which is beyond its own express business and open up a new business for future development.
Interaction, including both online and offline, is another point that Yang emphasizes. On one hand, they use social media to communicate with customers to make their customers fully aware of the process of transfer. On the other hand, when it comes to festivals, they send wishes or gifts to their customers. “People expect more beyond express the goods,” said Yang.
In Yang’s blue print, to create an efficient logistics chain is the very first step. After all, targeting on university students limits its customers. “For further development, based on the Shadow, we are going to develop online shopping platform. Actually we already signed a few agreements with some suppliers whose products are welcome among students and allowing them to sell their products on our platform. By doing so, students can get a discount on buying these products,” said Yang.
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