26 Jun Parcel Pal Technologies – On the Quick Road to Success
ParcelPal Technologies (CNSX: PKG) (OTCPK: PTNYF), a Canadian on-demand local delivery service provider, announced the completion of a major milestone of delivering over 2,500,000 packages to date. The company is disrupting the local delivery business by using cutting edge technology, that connects customers and businesses, through an algorithm that allows them to shop and get goods delivered within an hour.
Kelly Abbott, the President and CEO, opines that
“We are extremely excited to have achieved this major milestone of 2,500,000. Our growth over the past year has been tremendous and we’re looking forward to taking advantage of the many opportunities that have presented themselves for the remaining part of the year specifically in the liquor and Cannabis space with near-term plans to enter Ontario.
What started as an on-demand delivery platform has now evolved into a wide-ranging e-commerce platform, which allows a customer to choose from a range of legal goods encompassing food, alcohol, clothing and even cannabis. The area of operation is currently limited to Vancouver, Calgary and Saskatchewan, with the company aiming to expand to other markets in Canada and the U.S on a war footing, by focussing on adding new users, signing contracts with small business and large e-commerce providers and exploring various verticals for delivery.
The company has signed an agreement with Shopify (NYSE: SHOP), a major e-commerce platform for cannabis in Canada, to deliver to users who order cannabis products from Shopify stores in Vancouver, Calgary and Saskatchewan. This is another feather in the cap of the company, which has been pursuing strategic partnerships with not only big tickets retailers but also cannabis companies, which will help it establish a strong firm hold on the cannabis delivery space.
As Kelly Abbott, the President and CEO states
“Shopify is the main e-commerce platform in Canada for cannabis. Our integration onto the Shopify platform allows us to easily integrate and begin executing within the space,”
It already has a partnership with CHOOM Holding (OTCQB: CHOOF), a leading cannabis retailer in Canada, wherein both the companies together will determine the ideal distribution channels for adult use cannabis. This will offer convenience and easy accessibility to customer by providing access to over 45+ dispensaries across Canada, within strict legal guidelines set by the regulatory bodies. Aurora Cannabis (NYSE: ACB), a Canadian cannabis behemoth, has invested about $27 million in Choom and holds a 20% stake in the company.
It has a similar agreement with Kiaro, another leading cannabis retailer in Canada. This deal allows the company to manage cannabis deliveries through the Omnichannel platforms of Canadian retailers.
President and CEO Kelly Abbott States,
“Our objective is to become the Uber of cannabis in Canada and this takes us one step closer to our goal.”
In November 2018, ParcelPal started its operations in Everett, Washington, in partnership with Amazon (NASDAQ: AMZN), to act as its last mile delivery partner. This foray into the U.S market is part of the company’s expansion plan and offers as strategic base with close proximity to Seattle, Redmond and Tacoma, all representing future west coast expansion opportunities. It currently has contracts for Vancouver, British Columbia and Everett, Washington.
Offering Speed and Convenience
Looking to order food from your favourite restaurant but it’s not listed on any delivery app? Or want to pick up a cake for a birthday party, but running out of time?
ParcelPal will deliver from any vendor to any location you choose, at the click of a button. It allows you to order anything you want be it food, alcohol, clothes and cannabis and will deliver within an hour to your preferred location, even allowing you to track the status online. Its app connects buyers with sellers who were hitherto not available on conventional delivery platforms.
It uses an asset-light model, similar to Uber (NYSE: UBER), by using a combination of employees and independent contractors, and can offer customer data and metrics for further interpretation and analysis for mutual benefit. It uses a smart algorithm based steering of its resource pool to achieve seamless fulfilment of delivery.
From a consumer’s perspective, it offers instant and flexible delivery, all from the convenience of a home or office environment. Its app allows a customer to browse through a common user-friendly interface and choose from a wide variety of selections, along with customer service. The participating merchants also offer discounts, coupons and specials for the customer, making it an even better experience. There is very minimal mark-up on items, with provisions for in app payment and tipping. A customer can track his order from start to end through GPS enabled tracking, with features that allow timely notifications and in-app driver communication.
The company enjoys a dual revenue stream, with customers paying a 9 percent transaction fee, in addition to a 5 percent delivery fee. While the businesses pay a 15 percent transaction fee, translating to $29 in revenue on every $100 order.
Parcel not only wants to expand its offering and categories but also foray into newer markets as part of its expansion strategy. It aims to enter tier 1 and tier 2 markets in Canada and the U.S. The company also intends to diversify its revenue sources, through large e-commerce contracts, cannabis delivery and strategic acquisitions.
The Burgeoning Need for Faster Delivery
According to a report by Research and Markets, 61% of shoppers want their products delivered within 1-3 hours but over 72% of retailers do not offer same day or faster delivery.
Adriot Market Research estimates that the global same day delivery market will reach over $9.96 billion by 2015 from $2.81 billion in 2017. The rise in customer spending for faster delivery and convenience will drive the growth in the market. The report shows that business to customer delivery accounted for nearly 51% of customer spending in 2017. Faster delivery is no longer a perk; it is deemed essential and acts as a differentiator between competitors.
The advent of the smart phone and the rapidly growing internet penetration has seen e-commerce capture almost 55% of the same day delivery market. In 2017, smart phone penetration increased by over 30% over 2016, a number that is likely to go up in the coming years. The report also shows that the global m-commerce sales in 2017 were more than USD 1 trillion, accounting for over 60% of the global spending. Players such as Foodora and Deliveroo in Europe, as well as Postmates and DoorDash in the U.S. are offering on-demand delivery services.
There is a clear demand for quick, hassle free and reliable delivery services. However, the feature that sets Parcelpal apart is its delivery model which is both asset-light and extremely efficient.
- ParcelPal is set to disrupt the delivery services industry by using technology driven algorithms to achieve the best, fastest and most efficient delivery options for both customers and businesses.
- The demand for last mile delivery services has seen a rapid increase, and it makes it imperative for big players in the retail and e-commerce space to tie up with companies such as ParcelPal, that will provide a reliable and quick delivery service.
- The company has built a scalable business model that will help achieve rapid growth in the least possible time.
- The biggest challenge that it faces is that others may jump on to the bandwagon and the company may lose its USP. With retailers increasing looking at novel delivery models that could prove to be cost efficient, it is only a matter of time that competition follows suit.
- Amazon and other retailers have launched programs in the past such as the Delivery Service Partner and Amazon Flex, which allows for non-employees to deliver packages through their own vehicles. Its acquisition of Whole foods also points to the fact that it is looking to establish a hub and spoke logistics network in every city.
- The company has witnessed over 802% revenue growth between 2017, when it was launched, to 2018. It is optimistic of maintaining the same growth in the coming years as well, owing to its expansion plans.
- ParcelPal is diversifying into business that are at the cusp of breaking big, such as cannabis delivery through its series of agreements with Canadian cannabis players, which will not only help it establish a dominance over the market, but will also give it a huge advantage when the U.S legalises Marijuana as well.
We believe that ParcelPal has the potential to disrupt the delivery market just as Uber did with the taxi market. Its unique selling proposition of ordering from anywhere to anywhere, coupled with the use of technology to provide a bridge between customers and businesses is fulfilling a large unmet need in the delivery business. If its plans, to expand both geographically and product offering wise, go according to the roadmap it has set, then the company is looking at great success in the near future.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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