Hong Kong’s Lalamove, EY team up to shape ‘low-altitude economy’. What’s next?

Hong Kong delivery company Lalamove and professional services firm EY have joined forces and jumped on the “low-altitude economy” bandwagon in the hopes of expanding their reach in the Greater Bay Area and transforming conventional business. The companies told the South China Morning Post that the collaboration would leverage Lalamove’s logistics platform and EY’s services in planning, business modelling, risk advisory, governance and tax and customs advisory. The initiative involves equipment sourced from Ningbo-based drone specialist Yixin Smart Technology Company, with the devices taking part in the government’s regulatory sandbox project for low-altitude test flights. The drones can carry packages weighing up to 4.5kg and cover distances of 12km to 18km (7.45 miles to 11.18 miles). The Lalamove-EY team-up is among 38 pilot projects approved under the regulatory sandbox scheme. The government has so far received 72 applications as part of its push to help develop a lucrative low-altitude economy. “Our driver partners remain the irreplaceable backbone of Lalamove’s operations,” a Lalamove spokesman said. “The introduction of a seamless ‘vehicles+drones’ end-to-end service could complement our existing business model, which eventually brings convenience to residents of remote areas alongside addressing [small-and-medium-sized enterprises’] logistical challenges and reducing their logistics costs.” These automated flights would involve transporting urgent items such as medical supplies or important documents, he said. The spokesman added that Lalamove was actively engaging with different stakeholders to explore commercial opportunities, including identifying high-value routes covering the outlying islands and the planned Northern Metropolis technology hub. Steve Lo, EY’s alliances and ecosystems leader in Greater China, said the collaboration aimed to build a platform that specifically targeted businesses in sectors such as retail and manufacturing, rather than individual consumers. “The idea is really about the conceptualisation and development of a next-frontier enterprise logistics platform,” he said. “Our focus is really on large enterprises in Hong Kong and the Greater Bay Area, and also in selected parts of the Asia-Pacific region.” Lo pointed out that EY would only target large enterprises or government bodies actively embarking on a broader supply chain and logistics transformation journey, where drone delivery would serve as just one option among many innovative solutions. Lalamove recently completed an early sandbox trial run that involved flying souvenirs from the Hong Kong Science and Technology Park in Pak Shek Kok to Tai Po. But Lo noted that the full commercial deployment of such a service would depend on regulatory, charging infrastructure and other technological developments. He also noted that extreme weather represented a severe risk to the drones. “There are a lot of limitations at the moment, and that is actually why Lalamove and EY would like to work together to tackle both the business and technology bottlenecks,” Lo said. Lo said the advisory firm would assist with cross-border logistics planning, providing a valuable offering for companies needing to transport goods between the city and mainland China. “Cross-border operations will be a meaningful development for stakeholders in the low-altitude economy, providing a valuable offering to companies that value the services,” Lo said. “We have a very strong tax and customs advisory practice, so this is also one of the things that we’re working with Lalamove on. “Another example may be if we need to cross the border to mainland China. I think that is a really valuable offering to companies.” The collaboration was also exploring a digital asset payment gateway, with potential options including the use of stablecoins to solve multicurrency settlements in Southeast Asian markets, he said. Lo added that EY and Lalamove would co-develop green fleet intelligence capabilities to provide automated, audit-ready carbon measurements and reporting at vehicle or route level. The set-up aimed to offer actionable emission-reduction strategies and environmental disclosures that aligned with local regulations and leading global frameworks, Lo said. While Lalamove and EY stopped short of providing an exact timeline for the launch of their commercial service, a legislative document noted that a government technical study on a smart low-altitude traffic management system would be completed in 2027, with initial services planned for 2028. According to the Transport and Logistics Bureau document, which was shared with the Legislative Council this month, the bay area shows substantial market demand for cross-boundary logistics of commercial documents, high-end commerce and emergency supplies. The paper said businesses would enjoy unique advantages if they could develop cross-boundary low-altitude economy logistics applications. The government was proactively working with the relevant mainland authorities to foster test flights for cross-boundary low-altitude logistics projects, the document added. The discussions include planning for cross-boundary air route networks, cargo clearance arrangements and infrastructure requirements, according to the paper. Authorities also aim to complete the drafting of dedicated legislation for “unconventional aircraft” in 2027.