The enormous growth potential has also turned the digital freight platform market into a battleground of "gods at war," with the ultimate victor depending on its ability to build a moat.
Recently, Huolala updated its prospectus to the Hong Kong Stock Exchange, disclosing the latest financial data. The prospectus shows that in the first half of 2024, Huolala's revenue reached $709 million, a year-on-year increase of 18.2%. Alongside the steady improvement of Huolala's performance, a trillion-dollar market full of growth opportunities has also been revealed.
According to Frost & Sullivan, in 2023, the global road freight market size reached $3.7 trillion, and it is expected to increase to $4.7 trillion by 2028, with a compound annual growth rate (CAGR) of 5.0%. In terms of total transaction value (GTV) of orders, China is the largest road freight market globally. In 2023, the GTV of China's road freight market was $1.19 trillion, accounting for 32.6% of the global market, and it is expected to grow at a CAGR of 7.1% during the period from 2023 to 2028.
Advertisement
However, due to high dispersion of drivers, merchants' reliance on transportation outsourcing, and high time sensitivity, this is also a market with many pain points. First, the supply and demand are dispersed, with drivers and merchants being extremely scattered, leading to a time-consuming freight matching process. The dependence on intermediaries results in unnecessary communication levels, higher transaction costs, and a lack of price transparency. Second, the vehicle utilization rate is low; for example, in China, about 35% of the total driving distance is empty, indicating a significant room for improvement. Third, merchants' demand for real-time freight services is growing to minimize stockouts and sales losses. The most critical point is the lack of mutual trust, which generates high communication costs between drivers and merchants.
Whoever can effectively address the above pain points will be able to stand out in the trillion-dollar road freight blue ocean market and capture a larger market share. The rise of digital platforms for road freight services has become the key to solving industry pain points, facilitating seamless connections between merchants and drivers and achieving rapid development.
As one of the only digital freight platforms in China, and one of the few globally that generate more than $1 billion in closed-loop freight GTV annually, Huolala has been focusing on building its moat since its establishment, possessing all the above main factors for success. With technology empowerment and data-driven operations, Huolala has built a leading logistics transaction platform with a large scale and network effects. It has achieved a closed-loop transaction model from online ordering to intelligent order matching, automatic broadcasting, and after-sales service, becoming one of Huolala's deepest moats.
On the freight service digital platform, merchants can have real-time access to a large number of drivers and reduce waiting time. Various vehicle types can meet merchants' needs in different scenarios. Similarly, drivers can conveniently choose the best route that fits their schedule to increase vehicle utilization and generate more income. Therefore, merchants and drivers can make informed decisions based on the fair and transparent pricing set by the platform. In addition, artificial intelligence-powered self-learning algorithms continuously improve order matching and distribution efficiency, leading to a better user experience. The background and review of merchants and drivers can also enhance mutual trust and increase transaction transparency and security.
At present, the digital platform penetration rate in the global road freight industry is still low, with significant growth potential. According to data, only 2.1% of global road freight GTV was facilitated through digital platforms in 2023, and it is expected that this figure will grow rapidly in the coming years, reaching 2.8% by 2028; in 2023, the online penetration rate of China's same-city freight transactions was only 4.2%, and by 2028, it is expected that this figure will grow rapidly to 7.2%.

The huge growth potential has also turned the digital freight platform market into a battleground of "gods at war." Relevant statistical data show that the number of digital freight platform enterprises in China has been increasing in recent years, with the number of enterprises growing from 82 in 2011 to 3,683 in 2022, with a compound annual growth rate (CAGR) of 41.32% from 2011 to 2022.
So, who can ultimately win in this long-slope, heavy-snow market? It depends on its ability to build a moat. According to Frost & Sullivan's data, the main factors for success in logistics transaction platforms include: scale and network effects, closed-loop transaction capabilities, brand awareness and influence in the minds of users, operational expertise, technology and data capabilities, and diversified services.Digital platforms come in various types, primarily including information publishing platforms and closed-loop transaction platforms. Among them, closed-loop transaction platforms are suitable for addressing various industry pain points and capturing significant growth opportunities. According to the prospectus disclosed by Lalamove, its closed-loop transaction model can facilitate the end-to-end process from order issuance, pricing, prepayment, freight matching, order tracking to payment settlement confirmation. Throughout the entire transaction, valuable insights are generated, which can be analyzed and used to improve the service quality and efficiency of the platform.
Therefore, the value of closed-loop transaction platforms has tremendous room for enhancement. According to Frost & Sullivan's forecast, the global online freight service platform's closed-loop freight GTV will increase from $17.2 billion in 2023 to $38.2 billion in 2028, with a compound annual growth rate of 17.3%.
In addition, Lalamove's competitive moat also includes being the preferred brand for local and digital freight, highly praised by users; a successful track record of service innovation driving a virtuous cycle of development; proprietary and goal-driven technology; relentless pursuit of capital efficiency and excellent operations; and a visionary management team led by the founder with strong execution capabilities.
According to Frost & Sullivan's data, in terms of closed-loop freight GTV for the first half of 2024, Lalamove has become the world's largest logistics transaction platform, with a market share of 53.9%, far exceeding its main competitors. In terms of the number of monthly active merchants and the number of completed orders in the first half of 2024, Lalamove is also the world's largest logistics transaction platform.
At the same time, Lalamove is also actively innovating, continuously promoting business diversification, and expanding into overseas markets, seeking growth opportunities in the increasingly broad market.