Lazada Officially Launches In Singapore With An All New Website.
In under two years Lazada, the e-commerce startup, has become one of the top online retailers in every single market in areas it currently located. Such as Indonesia, Vietnam, Thailand, the Philippines and Malaysia, with its main goal to become one of the first website consumers will have on their mind when they need to do some shopping.
In just two years it has become one of the top online retailers in all the markets where it is present. In Indonesia, Vietnam, Thailand, the Philippines and Malaysia, with the aim to be the first website consumers think of when they need to shop.
It has recently manage to secure a round of financial funding bringing its total valuation from approximately US$430 million led by Tesco, the world’s second supermarket chain.
While the company has always been based in Singapore, It’s only been recently that it has manage to launch its Singapore site. Chief executive Max Bittner, A Mckensey and Morgan Stanley, shared during a recent trip towards Hong Kong, on how Southeast Asia consumer profiles are similar to that mainland of yesteryear and how its goals are to replicate the success of Jack Ma Alibaba within new markets.
“We’re called the Asian Amazon but we see of ourselves more as a Tmall or an Alibaba,” Bittner says.
“The reason is that the challenges that we face in Southeast Asia are more similar to the challenges that Tmall would’ve faced in China five to ten years ago rather than Amazon faced in the US 10 to 15 years ago.”
Bitter stated that there was a huge lack of offline retail presence, especially in third of fourth tier cities, eve the better well known places like Indonesia.
“Of course you have everything you could possibly want to shop in Jakarta but as soon as you go to the second tier cities like Medan or Surabaya, the offline retail presence dramatically declines,” he explains. “The reason why it hadn’t happened yet was because of supply. The demand has been there.”
Historically, it was because of logistical barriers in sprawling archipelagos like the Philippines and Indonesia, where Lazada had worked hard to build a “unique, complex supply chain”.
“We deal with multiple logistic partners depending on the island,” Bittner said. Certain ones are better for Sumatra or Kalimantan. We’ve focused on the last two years to really bring together a seamless logistics and supply chain organisation. If you look at our orders, 50 to 60 per cent is coming from outside the big cities. The special skill that we have is reaching those people.”
Some really good news is that Southeas Asian are starting to become one of the most technological savvy Internet user around the world. Bangkok and Jakarte have topped the list of cities that contain the most activity with Facebook usage. The Philippines has been rated as the country with the highest number of online social networks per person.
Long-term wise, Lazada may have gained a foothold over Chinese rivals JD.com and Tmall as part of these Southeast Asian markets shall never become to interesting for brands to invest heavily enough for themselves.
“For a big offline retailer, it will always make sense to build in China no matter what. You look at Southeast Asia and you have 600 million people but you look closer and its 70 million here, 30 million there. It doesn’t make sense to build an offline retail presence [outside the big cities]. We 100 per cent believe that the huge opportunity for people to enter Southeast Asia but only deal with one counterpart for the whole region–that one touch point rather than their own distribution network for each market.”
Lazada’s launching in Singapore has represented as the first time going into an established market. Bittner clarifies that while it may present a whole different set of challenges, it makes sence due to there being not one clear player dominating the market. There are no plats to branch out further towards the Northern parts of Asia or other regions for the time being.