Lazada, one of the largest online shopping sites in Southeast Asia. Supported by the German startup incubator RocketInternet Samwer Brothers (SamwerBrothers), Lazada’s target is mainly Indonesia, Malaysia, the Philippines and Thailand users.
In 2014, the company’s revenue was US$154.3 million, but its net operating loss reached US$152.5 million.
Lazada Group has been the flagship e-commerce platform of Alibaba Group in Southeast Asia since 2016.
iPrice2018 annual report shows that Lazada ranks first in Southeast Asia’s e-commerce online traffic ranking with 27% of visits.
Founded in 2012, Lazada has more than 70 million annual active consumers in 6 major markets including Indonesia, Malaysia, Singapore, Thailand, Vietnam, and the Philippines. It is now the leading and fast-growing e-commerce platform in Southeast Asia. It has maintained a record of doubling the order growth for five consecutive quarters.
Lazada will continue to digitize innovation and commercial development, empower customers and continuously improve the consumer experience; at the same time, he also revealed that he will continue to increase investment in the local market and further expand Lazada’s dominant position in Southeast Asia.
It is understood that adhering to localization is one of Lazada’s core strategies, not only maintaining its leading position in the Southeast Asian market, but more importantly, relying on Alibaba’s digital technology to build Southeast Asia’s e-commerce infrastructure and upgrade the local digital ecosystem.
Alibaba regards Lazada as an important growth engine for the Group’s global strategy. It has increased investment in Lazada for several consecutive years in 2016, 2017 and 2018, and through the empowerment of ideas, technology and materials, it has shown that Lazada has built a strong Competitive moat.
Taking logistics as an example, Lazada has focused on self-built logistics since its inception. With the help of Cainiao, Cainiao Technology has successfully empowered Lazada’s original logistics system over the years, thus establishing Lazada’s excellent logistics capabilities in Southeast Asia.
At present, Lazada has established at least 30 warehouses and “last mile” distribution centers in 17 cities in six countries in Southeast Asia. 80% of orders are delivered by Lazada warehouse and distribution system, and the last mile network coverage rate is 70%. In addition, more than 3,000 self-collecting points in six Southeast Asian countries will also make it convenient for consumers to choose the nearest place to pick up packages. Today, Lazada’s express delivery can be delivered to almost any island or fishing village in six Southeast Asian countries.
Regarding payment, Lazada has relied on Ant Financial’s technological empowerment to launch Lazada e-wallet since 2018. With the help of credit cards and other payment methods, Lazada has creatively brought a safe and convenient payment experience to Southeast Asian consumers. In Malaysia, half of consumers in the Double 12 event last year chose to pay with Lazada e-wallet.
At the same time, with the establishment of a strong logistics network, Lazada is also the first cash payment method in Southeast Asia. At present, Lazada has a strong cash on delivery service network in Southeast Asia, which has laid the foundation for the development of the entire e-commerce industry in the case of Southeast Asia where financial services are still not popular.
In a few years, Lazada has become an important part of Southeast Asia’s digital ecosystem. Shortly after Alibaba’s shareholding in 2017, Lazada used the “Voyager” project to restructure the platform using Alibaba’s digital capabilities, quickly upgraded to a world-class technical level, and possessed “the ability to create top-level large-scale promotion.”
Based on this, Lazada can not only deeply participate in the annual promotion of 618, Double 11 and Double 12, but also creatively bring multiple “firsts” to small and medium-sized businesses and consumers in Southeast Asia. For example, Lazada launched live streaming for the first time in six countries in Southeast Asia on Double 11 last year. The total number of live broadcasts in Lazada Thailand exceeded 1111. Among them, the 4-hour live interactive show GUESSIT! King, the first vertical screen in Southeast Asia, with the participation of multiple celebrity anchors, has gained more than 1.1 million views. Copper, a Thai women’s fashion brand, quickly gained popularity through live broadcasts. The double 11 sales were 100 times the average daily sales.
At present, the unique competitive advantage established by Lazada is gradually exerting its effects. Take Indonesia as an example. During the 12-month period ended March 31, 2020, Lazada’s orders in Indonesia increased by more than 170% year-on-year.
Behind this, the ultimate benefit is the small and medium-sized businessmen and consumers in Southeast Asia with different cultural backgrounds and consumption habits. During the New Coronary Pneumonia epidemic, Lazada relied on its existing commercial infrastructure to help more than 150,000 Southeast Asian SMEs undergo digital transformation. In April of this year alone, the sales generated by Lazada’s Lazlive live broadcast increased by 45% month-on-month, ensuring that brands and businesses in Southeast Asia can still achieve sales growth during the epidemic.
Alibaba’s first “love to help farmers” model in China was also moved to Southeast Asia by Lazada. Affected by the epidemic, vegetables in Cameron Highlands in Malaysia cannot be sold to the outside world. After learning of the situation, Lazada contacted the vegetable farmers to guide the solution of e-commerce technology and logistics issues. Within 48 hours, the lightning came online to the Cameron store. On the first weekend after going online, farmers in Cameron Highlands sell about 1.5 tons of vegetables on Lazada every day.
This is not only a vivid practice of Alibaba’s globalization, but also the value of Lazada’s e-commerce ecosystem based on the local. Ali’s approach to overseas markets is not to purchase or sell e-commerce oriented overseas, but to cultivate a new digital ecology locally. In other words, regardless of whether the merchant speaks Chinese, English or Malay, and is inland or in the archipelago, they can use the Ali business operating system to achieve digital sales, consumer operations, marketing, supply chain management and manufacturing.
According to the latest reports from institutions such as Google and Temasek, e-commerce is the largest Internet economic track in Southeast Asia. In 2019, GMV reached 38.2 billion US dollars. This number is expected to reach 153 billion US dollars in 2025. As a leader, Lazada’s long-term goal is to serve 300 million consumers by 2030.
