China's Lecang International Takes Shot at Becoming the Uber of Shipping Companies
Yicai Global
/SOURCE : Yicai
China's Lecang International Takes Shot at Becoming the Uber of Shipping Companies

(Yicai Global) Aug. 12 -- Shandong Lecang International Logistics Co. [NEEQ: 838349] is preparing to become China's first e-commerce shipping company to list on the Nasdaq-like New Third Board as the country's shipping industry starts to embrace the Internet age.

The shipper plans to raise between CNY50 million (USD7.53 million) and CNY80 million from the initial public offering. Proceeds will go to building an advanced technology platform, business expansion and operations to further consolidate upstream and downstream resources.

Lecang International aims to become a matchmaker-trading platform, founder and CEO Xu Xin told Yicai Global. The service will use the Internet to simplify what is now a lengthy offline process, cutting intermediary links and lowering the cost of logistics. The front-runner in this field could become the Uber of the shipping industry, he added.

China has more than 20 such platforms. They are investment hotbeds. Several have attracted funds worth tens of millions since last year. But only a few have done any business. Monthly trading volume is just 1,000 to 2,000 twenty-foot equivalent unit (TEU). That is less than one on 10,000 of the entire volume of ship-borne freight.

"The international logistics business has grown to CNY4 trillion (USD602 billion) in spite of the current downturn in the shipping industry," Mr. Xu said. "But the way it works remains pretty conservative."

"The future profit model can be based on charging commission from the seller when a transaction is concluded, charging authentication fees by launching authentication products similar to TrustPass, or charging fees for value-added services such as customs clearance, insurance and price differences," Mr. Xu said.

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