Flash Group CEO Komsan Lee
Flash Express, owned by Flash Group, is an all-in-one logistics service provider serving e-commerce players.
A unicorn company, Flash Express has so far attracted over US$780 million across several funding rounds from investors, including Buer Capital, SCB 10X, eWTP, PTT Public Company Limited, OR Retail Limited, Durbell, and Krungsri Finnovate.
In this interview, Flash Group CEO Komsan Saelee shares how the group grew in the past two-three years, how the current global economic slowdown is affecting its business, the market opportunities that emerged due to the economic downturn, and the company’s working culture.
Edited excerpts
How has been the past two to three years for Flash Group from a business growth perspective? How did it tide over COVID-19 and the economic slowdown?
During the first year of the pandemic, it was a favourable period for the logistics industry, and not only Flash Group and other players gained market share. Flash was able to handle delivery volumes reaching millions of parcels. We also started looking for opportunities to expand our business into Southeast Asia.
Flash Group provides services in Thailand, Malaysia, the Philippines, Indonesia, Laos, and Vietnam. We are preparing to cover the entire Southeast Asia region by 2024.
After the intense period of the pandemic subsided, the logistics market also began to decline. The growth of e-commerce, although present, was not as robust as anticipated by all parties. The high management cost and the market situation have slowed down the business.
Also Read: Flash Express adds US$150M more to its kitty, becomes Thailand’s first unicorn
However, Flash has been able to adapt by adjusting our business plans promptly. We always have Plan B and Plan C for overall business management. We expedite cost management and policies to ensure the organisation moves forward steadily.
How does the current global economic slowdown affect business, and what steps has it taken to mitigate any negative impacts? Has Flash noticed any changes in customer behaviour or demand, and how has it responded?
The overall global economic situation indicates that the global economy will experience a slowdown or slower growth than the previous year due to various factors.
However, the overall economic outlook for Thailand this year is expected to show slightly better growth than the previous year’s. This is partly due to the recovery in tourism and increased domestic and foreign investments that have returned.
Meanwhile, Flash Group continues to follow our original expansion plan in Southeast Asia (SEA). This means that the global economic slowdown has not significantly impacted the business in this industry.
The e-commerce market continues to expand, although fluctuations may occur during certain periods. Overall, the market still demonstrates growth. The company closely monitors Thailand’s global economic situation and other relevant factors. We have developed contingency plans for both the medium and long term to ensure preparedness for coping with the situation and aligning the company’s policies accordingly.
Amid the current economic conditions, consumer purchasing power remains high, as evident from the continued increase in online platforms, which are experiencing profitability this year after previously facing losses.
Additionally, consumer behaviour in choosing our services has remained consistent. This can be seen from the growing number of customers, with an average daily peak parcel volume exceeding 2 million pieces.
This indicates that the strategies previously employed by Flash Group, such as pricing, accessibility to remote areas, and an effective IT system, continue to be successful. These factors are considered strengths of Flash.
How has your financial strategy changed in light of the current market conditions, and what measures have you taken to ensure long-term sustainability?
The current market situation has little impact on Flash’s financial strategy. We regularly perform materiality assessments, including all actual and potential factors impacting our finances or operation. We have also established a monitoring process to follow up and review management approaches related to those material topics.
Lastly, we set up metrics to evaluate our performance through corporate and department OKRs to ensure we can achieve our business purpose and generate long-term value for our sustainability.
Can you speak of recent fundraising efforts and how the current economic climate impacted those efforts?
There hasn’t been any official news regarding the latest fundraising round. However, every fundraising round is always challenging, and each round presents challenges.
Regarding the overall investor perspective, we believe everyone is looking for opportunities and tends to choose companies with a future potential to generate income and profit. Therefore, the state of the economy may not be the primary indicator of its impact on fundraising.
Can you discuss any cost-cutting measures Flash has implemented and how those measures have impacted your business operations? Did you lay off employees to stay afloat in the market?
Flash has implemented measures to continually improve policies and plans within the organisation to manage costs and reduce unnecessary expenses. Particularly, energy costs are considered a major expense for us. Therefore, the company has incorporated technology and alternative solutions; for example, developing a technology application that analyses the most efficient delivery routes to ensure the fastest delivery of parcels to their destinations, enabling our delivery personnel to utilise it.
Additionally, the company has conducted experiments with electric vehicles for transportation, such as electric motorcycles and three-wheeled vehicles. These initiatives aim to enhance cost management and explore environmentally friendly options.
Have you adjusted your growth projections or other key performance indicators in light of the current economic climate?
Flash continues to pursue our main objective of expanding business coverage throughout Southeast Asia and connecting logistics networks, with Thailand as the centre. We aim to create an ecosystem and infrastructure that positions us as the logistics hub in SEA.
In 2023, Flash is progressing according to the original plan and is preparing to open operations in another country. We are studying the market in Singapore and Vietnam and our existing expansion in Laos, the Philippines, and Malaysia. Furthermore, the European market is also considered a significant target for the company’s business expansion.
Can you speak of any market opportunities that have emerged due to the economic downturn and how your company is capitalising on those opportunities?
We are fortunate that despite the economic downturn, Flash Group’s business has been minimally affected. The transportation business has become an integral part of people’s lives and the driving force behind the economic system. Most of society still needs to make purchases, and transportation businesses have become crucial to people’s lives. During the COVID-19 pandemic, it acted as a force that changed people’s behaviour from offline to online.
However, we prioritise materiality by constantly reviewing and reassessing it. Our materiality encompasses trending issues or external factors that may impact our business. This allows the company to sense and respond quickly, resulting in corporate resilience in turbulent situations and economic downturns.
Can you discuss your plans for diversifying your revenue streams or expanding into new markets in light of the current economic climate?
Flash continues to seek business opportunities to increase market share in Thailand and internationally. We focus on developing and improving our services to meet the needs of various target customer groups, including online businesses and individual customers.
We emphasise a policy of offering a diverse range of bundled products and services, catering to both corporate clients and online merchants. Furthermore, we seek business partnerships to expand our reach and coverage across different industries, including courier and logistics services. Flash constantly innovates and develops new services and offers to meet the evolving demands of our customer base.
How have you maintained a strong company culture and motivated your team during these challenging times?
The cultivation of five core values is essential for Flash Group. Customer-first means prioritising customer needs, while Result Oriented involves actively contributing to the business and striving for the best outcomes. Teamwork emphasises collaborative efforts and continuous learning within the team. Integrity entails acting honestly and doing what is morally right. Dedication represents a passionate commitment to achieving both individual and team goals.
These beliefs and attitudes guide Flash Group, shaping how people interact with customers and colleagues. They provide a comprehensive understanding of the company and foster self-awareness among individuals. Moreover, these values form a vital foundation for the company’s growth and ability to adapt to changing circumstances.
Do we see an end to the raise-cash-burn-cash growth model and the emergence of the ‘make profits, sustain & grow’ model?
Flash Group believes we have consistently operated our business with a profit-driven approach for sustainable growth, especially when the startup industry has faced new realities.
With the Federal Reserve’s interest rate hikes and the decline of Silicon Valley Bank, investors have become more cautious, causing startups to reassess strategies that heavily rely on fundraising. Therefore, what is essential now for startups is to build investor confidence by having a business plan that goes beyond relying solely on fundraising but also generates revenue from customers. Then we can have the opportunity to navigate through the current circumstances successfully.
What challenges does a late-stage startup face compared to an early-growth-stage startup? What learnings can early or growth-stage companies make from late-stage companies?
For those who are interested in initiating a business venture, it is recommended that you engage in genuine and comprehensive research. Identify the distinctive qualities that differentiate you from competitors in that industry and determine what value you can offer your target customer base. Once you understand this, have faith in yourself and actively pursue your goals. Additionally, timing is also a critical factor that contributes to achieving success.
How is the mindset and cultural shift happening internally since we are in a high-interest rate environment and funding isn’t going to be as easy as before?
Flash has internal management within the organisation divided into three eras: the era of empowerment, the era of regulations, and the era of cultivating organisational culture. In the first era, which we call the era of empowerment, the focus was on results because it was a starting point where we did whatever it took to satisfy customers with our services and make them return to use our services again.
Also Read: Flash Express secures US$200M Series D to expand its e-commerce logistics service in SEA
The next era is called the era of regulations because after doing business for two years, we gained customer acceptance, resulting in a significant increase in daily shipments. With more employees, we had to adapt by implementing regulations, having auditors to examine accounts and strict financial controls. The advantage of this era was that everything was done according to regulations. The company did what it should do, and we had employees who understood the organisation, worked as a team, and were more professional.
We are in the third era, which is the era of cultivating organisational culture. We have five core values that we use in our work. We strive to instil these values in our employees so everyone works together to achieve the organisation’s goals. Thus, we are confident that our people will show this strong and fighting spirit against all the difficulties and achieve our goal. This will build investors’ confidence in our business success, even during this challenging time.
We are focused on the mindset of individuals who can deliver good work under the company’s planned direction and reflect the business performance, which will build long-term investor confidence.
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