- Ninja Van’s revenue declined 7% due to intense competition in last-mile delivery services.
- The company is exploring new opportunities in B2B and cold chain logistics.
- CEO Lai Chang Wen expects profitability within the next 18 months.
Singapore-based Ninja Van’s revenue declined by 7% year-on-year, and its operating losses widened by 32% in the 12 months ending June 2023 (financial year 2023).
CEO Lai Chang Wen attributed the revenue drop to a nearly 20% decrease in prices for Ninja Van’s last-mile delivery services, as the company faced intense competition from rivals like Indonesia-based J&T Express.
Despite the challenges, Lai remains optimistic, predicting that Ninja Van will hit EBITDA breakeven in the next 12 months and achieve net profit breakeven within another six months.
Aiming a new target
Lai highlighted Ninja Mart, a business-to-business service that delivers fast-moving consumer goods (FMCG) to small retailers in non-urban regions of Vietnam and Malaysia, as a promising growth area.
Although Ninja Mart currently accounts for only 17% of Ninja Van’s overall revenue, its sales doubled in FY 2023. The company is also venturing into cold chain logistics, targeting suppliers that require temperature-controlled transportation for perishable items like fresh food to F&B outlets in hard-to-reach locations.
Lai expects these growing B2B and cold chain businesses, which boast margins “on average 3x higher” than ecommerce, to drive Ninja Van to profitability.
Hot ambitions in cold chain business
Ninja Van is open to new equity investments, particularly from investors who can contribute strategically to its B2B and cold chain ambitions.
The company has formed a strong partnership with an unnamed major Japanese cold chain player, which will share its tech know-how to help Ninja Van run an integrated cold chain network.
While Ninja Van is diversifying its business, Lai acknowledges that ecommerce will continue to play a crucial role, providing a “baseload” that allows the company to operate at the scale and frequency needed for B2B distribution and cold chain logistics.
Moving forward, Ninja Van aims to prioritize its most profitable businesses, with Lai estimating that the ecommerce sector’s steady-state share of total revenue would sink to around 50% from its current level of about 80%.
To read the original article: https://www.techinasia.com/ninja-van-eyes-path-ecommerce-price-war-dents-fy23-earnings
