Quick and reliable parcel delivery is key to customer satisfaction, but last-mile delivery systems are struggling to enable it. The increasing volume of e-commerce orders exerts immense pressure on traditional logistics systems, which tend to be manual and inefficient.
Having experienced this first-hand, on-demand intra-city logistics firm GoGoX decided to leverage artificial intelligence (AI) to improve the operational efficiency of its business.
Addressing last-mile inefficiency
GoGoX’s CEO Steven Lam shares with DigitalEdge that he and his co-founders initially ran a business selling advertisements on take-out styrofoam boxes, which required arranging van deliveries to restaurants across Hong Kong. “It was a painful experience. Vans could arrive late or not at all, so deliveries were delayed. Sometimes, they just left the styrofoam boxes outside the restaurants when the staff was too busy serving customers inside, leaving the boxes unattended and unused,” recalls Lam.
He continues: “Faced with the challenges in managing our supply chain — such as picking up the styrofoam boxes, planning delivery routes, calling call centres to get drivers, managing drivers and customer complaints, and more — I was inspired by the need for efficient and reliable logistics solutions in the rapidly evolving digital economy. This is why we started GoGoVan in 2013.”
GoGoVan matched van drivers with specific delivery jobs in Hong Kong. Over the years, it has expanded its portfolio to offer various logistics services, including door-to-door deliveries and customised logistics solutions across multiple platforms. “We now use a variety of delivery vehicles depending on the job order. Hence, we changed our name to GoGoX, with ‘X’ representing boundless possibilities for exploration in our business, as we continue to offer value-added services to our customers to provide them with a holistic logistics experience,” Lam says.
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Getting an AI boost
Leveraging a combination of technologies including cloud computing, analytics and AI has enabled GoGoX to offer a wide range of logistics services. Moreover, it has developed three AI-powered features aimed at transforming the way driver-partners and customers interact with its platform. “Those features address the challenges [typically] associated with last-mile delivery — from planning to execution, alignment with customer requirements and expectations, to labour shortage, among others,” says Lam.
The first is the order assignment (OA) feature, which uses AI to automatically assign pick-up and delivery tasks to drivers based on the most efficient routes. Lam explains: “Previously, drivers could pick and choose orders, which wasn’t always efficient. With OA, the system calculates the most efficient route at any given time, taking into consideration variables like traffic congestion; matches specific delivery items with driver-partners [such as if they have a history of delivering highly sensitive/expensive items]; and/or [obtains] feedback from previous customer interactions.”
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Doing so also ensures higher earnings for drivers compared to before. This is because OA saves drivers the hassle of bidding for unguaranteed jobs and calculates for them the most efficient way to complete more jobs in less time. “This functionality drives better workflow processes that ultimately unlock better customer service/experience. OA has been rolled out in Hong Kong and is being fine-tuned, with plans for future implementations in other markets in the region,” says Lam.
The next AI-driven feature is resource allocation optimisation. It automatically allocates resources based on the number of job orders received, locations, types of items to be delivered, and the most efficient routes the drivers could take.
GoGoX has also developed AI virtual assistants. These include AI-powered chatbots via popular messaging platforms and voice assistants to provide 24/7 support such as helping to request quotations, accepting orders, handling customer queries and resolving complaints in multiple languages.
The data advantage
GoGoX’s integration of AI is bolstered by the extensive data accumulated over more than a decade. “This is a clear advantage for us as those data are crucial in serving as the foundation for training and fine-tuning our AI models. It’s important to remember that both the quantity and quality of data directly impact the AI model’s performance and generalisation — and we have both,” asserts Lam.
He continues: “Diverse, representative data enables AI algorithms to learn patterns from past experiences, make predictions, improve decision-making in real-time, and adapt to different scenarios, ultimately shaping AI’s ability to perform specific tasks accurately and more efficiently. [In the case of GoGoX, it’ll help enhance our AI algorithms’ ability] to match specific job orders with driver-partners, the routes they take when they go home, their job history with specific customers, and more.”
Lam also highlights that ensuring data privacy and security during AI training is a priority. To do so, GoGoX anonymises personally identifiable information, uses encryption techniques, implements access controls, and adheres to privacy regulations like the EU’s General Data Protection Regulation. Additionally, its development team adheres to industry standards in data handling best practices, such as employing secure data transfer methods to protect sensitive information throughout the AI development life-cycle.
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Success factors
Being tech-driven to be customer-centric has contributed to GoGoX’s success. Today, it has presence in 360 cities and over six million registered drivers across Hong Kong, mainland China, Singapore, South Korea, Vietnam and India — and growing.
“Our revenue and customer base have seen significant expansion across the region and internationally. The Asia Pacific region is particularly lucrative due to the rapid growth of e-commerce and increasing demand for efficient logistics solutions. [I’d also like to highlight that] we’ve pulled GoGoX through a successful IPO [in Hong Kong] right during the Covid-19 pandemic in 2022,” shares Lam.
Beyond using tech, GoGoX’s success can be attributed to a mix of strategic funding, a resilient team and a strong company culture. Lam reflects: “We were lucky to get crucial funding and support at critical moments, like the early micro funding from Cyberport and later support from Singapore angel investors and mainland Chinese investors. These funds allowed us to expand our business across multiple countries between 2014 and 2015, setting the stage for our merger with 58 Suyun in 2017.”
He adds: “Our team’s resilience and adaptability were key too. When we started, Hong Kong didn’t really have a venture capital ecosystem. We had to prove ourselves over and over, showing investors that we could execute quickly and effectively, even with limited resources. Our story of starting with just HKD20,000 and building from there resonated with many investors.”
“Lastly, it’s about staying true to our core values,” says Lam. “At GoGoX, we emphasise ‘Dare to venture’, ‘Top of your game’, ‘Grow or die’ and ‘No bullshit’. These principles have kept us focused and motivated, especially during tough times like the Covid-19 pandemic. We knew we had to keep pushing forward, not just for ourselves but for our customers and our team.”
To sustain business growth, GoGoX plans to further invest in AI to enhance its predictive analytics capabilities and improve decision-making processes. It will also expand its suite of solutions to address emerging challenges and capitalise on new opportunities. “We’ll continue to operate on the principles of customer-centricity, and thoughtful implementation will not change when we evaluate new and emerging trends,” concludes Lam.
