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Is Lazada Turning into the Amazon of Southeast Asia?

With approximately 1.2 billion users, a presence in 58 countries, and claiming 50% of the U.S. market share, Amazon clearly dominates the international online commerce sphere. However, its reach can barely be seen in Southeast Asia, where eCommerce players continue to battle it out for the top spot. With the region’s 600 million people scattered over four time zones and 11 countries, each with their own languages, currencies, and cultural and political differences, the fight for regional supremacy will have its challenges–but the winner will be highly rewarded.

Alibaba has already set its sights on taking over the entire Southeast Asian eCommerce market with its online platform, Lazada, and it’s making significant strides to do so. But the competition is close on its heels as Value Walk Technology reported, in the fourth quarter of 2018, Lazada had over 183 million monthly visitors, with Tokopedia running a close second at over 153 million, and Shopee with over 147 million. It should be noted that what makes Tokopedia’s numbers so impressive is that it currently only operates in Indonesia.

Lazada’s Leverage

Lazada commands 46% of the e-commerce market share in Southeast Asia and it is the first mega commerce platform to reach six major Southeast Asian countries: Singapore, Malaysia, the Philippines, Thailand, Vietnam, and Indonesia.

Diversifying their offerings by bringing together specialty stores, Lazada hopes to be a one-stop shop of integrated channels to attract the masses in the region–both consumers and merchants.

In 2016 Lazada spread its wings with ready-to-go “products” by purchasing RedMart–Singapore’s leading online grocery service, thus bringing grocery and retail shopping all together in one app. They are also attempting to blur the line between online and offline shopping by introducing pop-up stores in Malaysia where customers can try before they buy or arrange for convenient delivery.

Further, Lazada is taking the shopping mall concept and making it mobile by launching LazMall, a TMall spin-off of Alibaba’s Taobao’s Mall. This new “dashboard” aims to connect over 300 local and international brands including L’Oreal, Samsung, Tesco, and Unilever directly with consumers.

Lazada’s Growth Strategy

According to Pierre Poignant, Lazada’s CEO, Lazada’s strategy for growth is to focus on offering an integrated shopping and entertainment experience. Merchants are providing “shoppertainment” (as it were), in the form of in-app games and live streaming features such as concert events designed to “deepen the connection with the millennial audience.” This also allows Lazada to “harvest rich customer data” that is indicative of their spending behaviours and trends. According to MediaBuzz.com, Singapore, Lazada currently serves 560 million consumers with its 400,000 sellers and 3,000 brands.

As would be expected, Lazada’s growth strategy goes beyond the consumer market. Lazada aims to increase its SME resellers to eight million by 2030; therefore, it only makes sense that Lazada, is now offering “Super Solutions” to entice businesses with the tools necessary to position themselves in the marketplace.

The Super Solutions includes solutions for store owners, like a store builder, where sellers can customise their storefronts to differentiate themselves. It also features Marketing Solutions Package and Business Advisor, where retailers are provided with real-time information to help them make faster and well-informed decisions to effectively and efficiently sell more.

And Lazada offers yet another competitive advantage for participating business owners: their infrastructure. They own up to 80% of their supply chain and the logistics that will support their (and participating merchants’) desire to capture customer loyalty throughout the region.

With several marketplaces vying to gain more sellers, small- and medium-sized businesses are presented with a plethora of options to host their virtual stores. The enticements include multiple commerce channels, established logistics, and the ability to reach a wider audience. And Lazada’s cloud-based marketplace appears to be positioned to provide all these benefits.

Benefits of the Cloud

Cloud-based businesses seem to be the trend du jour–and what’s not to love. Overhead costs associated with running a brick-and-mortar business are almost completely eliminated and your target audience is exponentially larger than just a decade ago. Cloud-based solutions remove you from the troublesome maintenance and updates of servers, software, and networks. And once you automate the processes, you eliminate the need for human intervention and, thereby, human error.

With their Commerce-in-the-Cloud suite, CrescoData allows you to link your store to over 70 commerce channels, with support for eight languages and all 180 currencies. The suite functions as a centralised dashboard where you can manage stock inventory and receive real-time alerts. And the best part is that it connects your current UI to disparate commerce platforms such as Order Management Systems (OMS), Product Information Management platforms (PIM) and Warehouse Management Systems (WMS).

CrescoData uses both AI and machine learning to manage orders and update supply inventories across all your commerce channels in real-time. You can upload your entire product catalogue to several marketplaces simultaneously and the suite automates product mapping. This saves time, allows you to scale your business, and it can all be done, quickly and easily, from a single platform.

With all the online marketplaces available, it will be exciting to see how Lazada plans to keep themselves at the top and win over the remaining 54% of the market share. It is expected that Lazada will continue pushing the boundaries and setting the bar for online shopping, shoppertainment, and logistics. With Alibaba’s expertise in eCommerce and investment, we should all watch out for future integrations and revolutionary improvements that will shape the future of Lazada’s presence in Southeast Asia.

Anna Trybocka