When Bjorn Pardo started Xend in 2004, his goal was to address the pain points that Filipino merchants were experiencing in the nascent e-commerce segment.
An online retailer himself who specialized in wood exports to cue stick makers in the US, Pardo sweated out hours every day at the post office or a local courier service provider, filling out forms and packing shipment.
No one was paying attention to web-based traders, so he decided to create a hybrid service combining e-commerce, tech, and logistics solutions.
Killer value proposition
Xend made shipping more efficient: forms are provided online, tracking is automated, and free pickup is done door-to-door. Pardo started with one courier, and one coder.
He haunted web forums to invite online merchants to try out his service. “We had this killer value proposition: half the price, 10 thousand times more convenient,” said Pardo. On average, buyers would spend P1,500 ($32.08) on one purchase, and Xend kept their services low-cost. “We knew that e-commerce would never grow if you had to pay high for shipping.”
Over the years, Pardo has continuously improved his service. Xend switched from phone-in bookings to do-it-yourself online booking and now has a mobile app, cutting down booking and actual shipment processing time from two hours to two minutes, and finally to a couple of seconds of finger-swiping.
Do or die
Instead of having to take several screen shots of tracking information, Xenders will soon find this info automatically captured for emailing to their buyers, who need only scroll down to see all the data. “Our mentality is do or die. You just have to continue to improve and grow,” said Pardo, who realized that the growth would be in domestic demand, and so he expanded to domestic shipping from international shipping, although they still serve over 230 countries.
Xend was the first to charge by volume rather than by weight, while other companies charged additional fees for packages over one kilogram. Xend is the first and only courier to offer free insurance worth P2,000 ($42.77) for all domestic-bound and $100 (P4,677) for all international-bound packages, with Pardo extending free ad or shipping credits to clients who take issue with deliveries. Their customer-centrism manifests in dedicated officers managing specific accounts. So if the package does not get delivered the next day (Manila) or up to three days (provinces), customers know who is accountable.
From a handful of signups, Xend now has 160,000 individual merchants registered, and an additional 200 patrons signing up every day. Xend’s 200-strong couriers accomplish 3,000 pickups a day. (In five years, small accounts have gone from one pickup per day to an average of three pickups every day.)
Xend has also partnered with 7-Eleven, where clients may opt to drop off their parcels. Xend is currently working with several local couriers, including LBC and 2GO, to better expand their services from Metro Manila to the provincial areas, where most of their clients’ recipients are located. “We have a mini-2GO and a mini-LBC hub right here in our office, so things gets processed faster. There’s a lot more collaboration.”
Originally, Xend exploited traditional logistics companies’ unfamiliarity with e-commerce, as big players thought that that niche market was negligible. They were wrong: Internet penetration is up, and besides the small online merchants, Xend now serves corporate accounts such as Unilab, and brick-and-mortar shops delving into e-tail, such as Toy Kingdom and Bench.
“Where the big players and I overlap is the corporate accounts that are trying to get into e-commerce right now. But e-commerce and tech has to be in your DNA. We allow our systems to integrate well with any system and we’re open to customizing anything that we need to do to boost e-commerce,” Pardo said.
Nonetheless, Xend has not lost sight of its core market: the small online merchant whom they started—and have grown—with. “We’re not reliant on a few corporate entities. We’re serving hundreds of thousands of people, and it will continue to grow,” said Pardo.
Johanna is a freelance writer who covers business and lifestyle. She is also the former associate editor of Entrepreneur Philippines magazine. Follow her on Twitter, @jo_poblete.
This article was originally published in the August 2015 issue of Entrepreneur Philippines magazine.