Lazada is kind of like the version of with which works in Southeast Asia: a key retail e-commerce platform to bolster global growth strategy of the Asian giant in the area. A location where the young population with a high rate of access to the internet and smartphones, has made the platform a tempting target for cross-border sellers.
Among the most recent plans of this take Lazada to Europebut unlike , which focuses on cross-border sales, it will concentrate its efforts on local European merchants.
Lazada, retail e-commerce in a strategic market
The Chinese giant Alibaba, took over from Lazada in april 2016a fundamental operation to add 200 million potential clients in a very valuable region for its expansion.
Lazada was created in 2012 by the German , the largest startup incubator in the world, creator of projects as successful as that of the online fashion giant Zalando and promoter of the an ambitious group of online fashion sales companies with a presence in the most important emerging markets around the world. Thus, Lazada was born with the aim of bringing together the e-commerce business of Southeast Asia in a single portal. In fact, after the arrival of Alibaba, Lazada managed to position itself as the number 1 online shopping and sales site of the area in 2018.
In 2016, a few months after being acquired by Alibaba and thanks to its capital injection, Lazada expanded its portfolio with the purchase of an online service from Singapore specialized in food that facilitates the grocery shipping.
In 2021 it had 159 million users, to whom it offered, thanks to thousands of national and international sellers, more than 300 million items from 18 different categories such as fashion, accessories, cosmetics, toys, home, pets, DIY, leisure , automotive, electronics, food, etc.
Lazada is present in six countries: Philippines, Malaysia, Singapore, Thailand, Vietnam and Indonesia, the largest economy in Southeast Asia. And he sets his sights on Europe, planning to expand in search of new opportunities.
4,000 million dollars of investment between 2016 and 2018
After the initial investment of 1,000 million dollars (885 million euros) to take control of Lazada, Alibaba allocated an identical amount to the eCommerce platform in June 2017. It increased its stake to 83% and bought another digital trading platform that exercised direct competition in the Indonesian market.
In February 2018, a new injection of capital2,000 million dollars more, 1,630 million euros, in order to strengthen its position in Southeast Asia.
With this investment, the e-commerce giant sought to improve service to consumers and offer sellers innovative ways to do business with customers in Southeast Asia. Alibaba qualified for replicate the dynamics of the Chinese market in the region without the need to start from scratch, assuming the infrastructure of Lazada and the logistical challenges of the region.
The customer experience, comprehensive care, multiple payment methods including cash on delivery and “hassle-free” returns via its own delivery service, backed by over 100 logistics partners, are some of the brand’s hallmarks.
“With a young population, high mobile device penetration, and only three percent of the region’s retail sales conducted online, we feel very confident moving forward in Southeast Asia,” commented Lucy Pengone of the founders of Alibaba, who replaced Max Bittner as CEO after the purchase operations.
New businesses, new expansions
During October 2019, Lazada announced his alliance with pan-regional credit issuer Citi to launch its new financial product in Singapore, the Lazada Citi credit card, an event that made history as the first time an eCommerce had launched a co-branded credit card in this region.
With this new financial product, Citi managed to access a younger audience more digitally savvy and Lazada could offer a greater variety of offers and services leveraging a global financial platform.
«As a leading consumer lifestyle destination, we want to provide more value to our customers and a co-branded card that rewards users for their purchases” said Mary Zhou, director of marketing for the Lazada Group.
Next stop, Europe
The next strategic advance of the Alibaba group is to take Lazada to the old continent, according to The need to seek further growth abroad comes from slowing opportunities in Southeast China, where both strong competition with rivals and (PDD.O) and the ByteDance subsidiary, as the new regulations offer limited expansion options.
The measure came after it was opened in November 2021 a new logistics plant in Belgium through its subsidiary Cainiao, with which a large part of the activities are handled and functions as an operations center in Europe. The 30,000 square meter smart center is located in Grâce-Hollogne, near Liege airport.
Lazada’s strategy is first partner with European sellers to start marketing their products on the platform. James Dong, responsible for Lazada in Thailand, is the executive in charge of the expansion of the platform to Europe.
Alibaba increases its revenue and GMV in 2021
Between October and December 2021, the Alibaba Group invoiced a total of 34,218 million euros. This figure reflected a year-on-year growth of 10%, when comparing it with the income of the same period of time in 2020, but it was 1% below the projections made for the quarter.
Although there was an increase in revenue, Alibaba ended the quarter with a net profit of €2.7 million, an amount that reveals a 75% drop, compared to the benefits obtained in the last quarter of 2020.
For its part, during the last quarter of 2021, Lazada increased his gross merchandise volume (GMV) by 52% with a total of 20,199 million euros.
Within Alibaba’s future plans is reach 300 million users by 2030 and accumulate a GMV of 94.8 million euros.
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