Ninja Van enters cold chain and B2B logistics in bid to diversify from e-commerce

LOGISTICS platform Ninja Van has launched a cold chain offering, Ninja Cold, and a business-to-business (B2B) offering, Ninja B2B, on its 10th anniversary.

These initiatives are part of an effort to diversify its offerings beyond e-commerce and seek higher-margin businesses in search of profitability. The steps taken to move the business in this direction started in 2019, before Covid-19 hit and e-commerce surged, according to Lai Chang Wen, chief executive officer and co-founder of Ninja Van.

“We started in earnest last year, we didn’t want to talk about it much until we were more ready, we didn’t want to lose the first-mover advantage,” he said on Monday (Apr 8).

While e-commerce marketplaces such as Lazada and Shopee have built up their own logistics fleet, Lai claims that did not greatly influence Ninja Van’s decision to move in this direction. Instead it was propelled by the need to drive profitability by finding a better-margin business outside of e-commerce.

Cold chain, where products are shipped at cold temperatures between 4 degrees Celsius and minus 25 deg C, ticked all the boxes for Ninja Van. It provides the highest value add that Ninja Van could bring and would need both B2B and business to consumer (B2C) options, said Lai.

“If you are sending chicken pies, you can send it to stores like 7-11 and to consumer doorstops, so the lines get more blurred,” said Lai.

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Ninja Van will be utilising both specialised refrigerator trucks and outfitting up to 20 per cent of its 1,000-vehicle fleet in Singapore with cooler boxes with active or passive cooling. The company will be leveraging its existing network of warehouses and vehicles, gaining a head start that others would have trouble replicating, said Lai.

Not all drivers will get to do the cold-chain deliveries, with only the better-performing drivers earning the opportunity, since the goods would require more care and attention. This would be a form of career progression for the drivers, according to Lai.

“When there are higher margins, we can pay people better, when there is higher productivity, we can afford to pay drivers better. This profit, we don’t have to necessarily keep to ourselves, but can share it across our workforce,” he said.

Ninja Cold will launch first in Singapore and Malaysia, with about 20 customers currently trying out this offering. Indonesia, Philippines and Vietnam will follow after the service has taken off in the first two markets. The offering is expected to eventually contribute 10 per cent of revenue and 50 per cent of total profit.

Lai sees Ninja Cold as a potentially transformative service, allowing food and beverage (F&B) businesses to grow in previously unthought-of ways. Rather than sticking to cities or places with delivery coverage from cold-chain logistics companies, F&B operators could now think about opening new places or delivering ready-made food to locations previously too costly.

“Now you can open a food concept anywhere in Malaysia and we can deliver for you at a very affordable price, this gives many more revenue expansion opportunities. Once you unblock the limitations holding F&B back, it can be interesting to see how it develops,” said Lai.

In Singapore, Ninja Van is also launching Ninja B2B, which aids businesses in restocking stores, with the capability of delivering in small quantities for more frequent restocking. The idea behind this solution is to increase the productivity of Ninja Van’s network, while giving businesses reliability and scale in restocking their shelves.

“A lot of shops are being restocked once or twice a week and encounter out-of-stock scenarios, which makes no sense since they are paying so much for rental in Singapore, he said, adding that for a consumer business, “any product not on the shelf is a lost sale”.

Ninja Van’s latest financial filings with the Accounting and Corporate Regulatory Authority of Singapore for the financial year ended Jun 30 2023 saw revenue shrink to S$1 billion from S$1.1 billion in 2022. Higher impairment losses on non-financial assets, merchandise and administrative expenses have resulted in a higher loss of S$326.8 million in 2023 compared to S$250.2 million in 2022.