With operations in 26 cities in Latin America and the goal of 20 million packages delivered per year, Chazki Peruvian Logitech is committed to developing a broad supply network that allows immediate speed and long-term reliability.
The digital world implies constant changes and rethinking old formulas. In that sense, e-commerce is no exception. Chazki, the Peruvian logistics startup , is leading a disruptive trend. “Logistics has become the new marketing,” is their slogan. AméricaEconomía spoke with Gonzalo Begazo, CEO of Chazki , about this vision of e-commerce as a business model, as well as the achievements that the company has obtained in a scenario marked by the effects of the COVID-19 pandemic.
The importance of improving the delivery experience
When e-commerce was shown as a new business alternative, customers chose services according to price or offer. “Many years ago, the most important variable was price. Or the customer asked, how different is the variety of products you have? But right now, the most important variable is being able to deliver quickly,” says Begazo. The message is clear. In the face of greater competition, arrival time becomes an important differential value. If one company delivers an order in five days and the other offers the same in 24 hours, it is obvious who will win. Now, logistics is essential.
Along these lines, Chazki has opted to divide its delivery services into first, middle and last mile. While, in the field of transportation, the company already works mainly with vans and trucks (80%). The remaining percentage covers traditional motorcycles. The inclusion of heavy vehicles is crucial for services to cover greater geographical distances. “Now our clients are not only hiring us to provide a delivery service for something their client bought, but also to make movements between their distribution centers, even between cities,” highlights Begazo.
Within Chazki's offer, last mile deliveries are especially important as they are the end point of supply chains. The promise of delivering an order to the final customer in an hour is tempting, but its fulfillment is linked to the availability of drivers in a city. Building a broad network of collaborators takes time, which is why Chazki has made sure to retain its drivers during its seven years of existence. Along with the acquisition of innovative vehicles, this policy has helped Logitech take advantage of new competitors.
“The main value point here is the fact that a company that previously had to do last-mile delivery was contracting with a company. It had to make a delivery by truck and hired another company. Currently, Chazki can be hired to perform all these services in a single negotiation,” adds Begazo. The CEO also highlights that Chazki is a pioneer in this business model that is already available in the five Latin American countries in which it operates (Peru, Chile, Colombia, Mexico and Argentina). A new deal can start with something as simple as a chat with an old partner. For example, Chazki can ask a Peruvian client if they also operate in Chile. If there is an affirmative answer, the startup offers to repeat its different delivery services in the second country. “At that point, the client is already perfectly integrated with us,” summarizes the company leader.
Strategic alliances
Another important point in the expansion to new markets is the alliance with important regional investors. For example, in 2021, Chazki partnered with Falabella, a Chilean business group that manages retail stores at the regional level, to develop Fazil, the delivery service for Tottus supermarkets in Peru. This application works through the on demand modality: the supermarket pays for drivers who are hired for each delivery, but not per day. This is a feature that lowered the costs of the service and caused notable success that expanded Fazil to Chile. Likewise, Chazki has sealed alliances with MercadoLibre ( e-commerce ) and Oeschle ( retail ) to support their distribution channels.
This trend of expansion through customer networks has led to an optimistic forecast: by the end of 2023, Chazki should accumulate 20 million deliveries. Beyond the figure, Begazo highlights a detail. “We will collect 20 million deliveries without owning any vehicles. That is the collaborative economy model we are in,” he explains. The CEO illustrates this achievement in the schemes achieved by successful startups worldwide such as Airbnb, which provides accommodation to millions of tourists without owning houses or hotels.
With deliveries, profits multiply and it seems that it is a matter of time before Chazki reaches the prestigious “unicorn” rank, that is, companies with a valuation of US$ 1,000 million. However, Begazo believes his company should focus on more important goals.
“What we are doing now is scaling the company, not only by increasing its clients and cities, but by making it a business with solid fundamentals that allow it to grow for the next twenty years. “Those ideas seem more important to me than achieving the rank of unicorn,” he says.
From that perspective, Begazo does not care that Chazki is the first, second or third startup to reach the rank of unicorn. “If we are first or third it doesn't matter. In both scenarios it means that we have done things well, generating jobs and giving entrepreneurs and Peruvians in general a lot to be proud of,” highlights the CEO.
Next moves
Regarding the key decisions for 2023, Begazo considers the inclusion of a series B as a financing source. “The point of raising capital for us is that we have already generated the economic fundamentals so that the money that enters Chazki is only for growth. We would no longer need money to cover the shortfall in operating expenses, for example.”
This capital expansion would force the company to take an unprecedented leap: from currently operating in 26 cities to around 190 in three years. Begazo does not rule out that the regional market situation is complicated for this type of surveys; However, he believes that the company's solid economic fundamentals and its conviction to innovate make them potential recipients of additional investment.
If we talk about crisis, some countries have recorded declines in the sectors where Chazki operates . Perhaps the most notable case is e-commerce in Chile, where the sector registered its first drop in 2022 since records began. In this regard, Begazo recognizes the negative effects of this trend on its clients. He describes the causes as “political and inflationary implications, as well as devaluation corrections.”
Even so, the CEO perceives this phenomenon as an opportunity to identify Chazki's two growth paths. “The first consists of retained customers, who in turn grow because you want it or not. Even though e-commerce may have slowed, these companies continue to grow. They do so at a slower speed than other years, but they continue to grow. The second is based on growing by acquiring new customers.”
The latter has been the traditional growth method for Chazki . The reason? It allows the startup to diversify its dependence on e-commerce in the long term . On the other side of the coin, the fact that several retail companies have begun to venture into e-commerce services has also helped a lot .
Currently, Chazki constantly scans the market for potential acquisitions or mergers with similar companies. Begazo assures that they have entered into negotiations to buy a Chilean company. So far this year, other conversations have been held that the CEO affirms “are maturing at different speeds.” On the other hand, he believes that artificial intelligence (AI) can be a great ally of logistics, because its algorithms can better predict demand. In the long run, the level of capacity available to drivers and vehicles to meet that demand is also predicted, especially at unpredictable peak times such as Christmas or Mother's Day.
Likewise, the Peruvian executive highlights the intelligent storage systems that some clients have as another contribution of AI. “These systems based on artificial intelligence help you recognize patterns, trends, regularities, dependencies on the database that may be unstructured.”
Finally, Begazo maintains that AI can contribute to communication with the client. “Conversational artificial intelligence will provide us with the possibility of providing better customer service, more relevant and allowing complete visibility of the shipment. "That the client feels that they are being cared for at all times." The CEO's motto is clear: there are language algorithms involved, but the customer must feel comfortable not realizing that they are being served by a machine.
