The future of Lazada

Lazada, a major ecommerce player in Southeast Asia, has announced its vision for the next few years. It’s doubling down on its status as a curated online retailer for brands. It’s moving beyond pure ecommerce towards offline activities, and it’s merging entertainment and shopping in Southeast Asia in a bid to draw in users.

Photo credit: Lazada

Speaking at Lazada’s Brand Future Forum (BFF) in Singapore, Pierre Poignant, CEO of Lazada Group, recited the company’s updated mission statement: “Accelerating progress in Southeast Asia through commerce and technology.”

“We are doing commerce. That’s what we do. It’s not ecommerce. We want to transform retail and commerce both online and offline,” said Poignant. There’ll be more initiatives in the years to come that will integrate Lazada and its merchant partners with the offline world, he explained. Lazada’s physical collection points, where customers can pick up goods they’ve ordered, is just the first step in this plan.

The platform’s emphasis on physical locations echoes wider trends in the ecommerce world. US giant Amazon has gone into brick-and-mortar retail, as have Chinese titans Alibaba and JD. Closer to home, Indonesian ecommerce unicorn Bukalapak has articulated its offline strategy, and competitor Tokopedia has embarked on something similar as well. As fellow Tech in Asia journalist Putra Muskita writes:

Through Mitra Bukalapak, which translates to “Bukalapak partner,” the company ties up with small offline businesses around the country for two purposes. First, the program lets a warung or roadside kiosk sell Bukalapak-powered digital goods – phone credits, train tickets, electricity tokens – to offline customers.

Second, it lets these offline businesses purchase inventory, such as instant noodles, cigarettes, or fast-moving consumer goods, through the Mitra Bukalapak app. These goods are fulfilled directly by distributors on the Bukalapak platform.

While Lazada hasn’t revealed as much about its offline strategy, we can look to Alibaba, its parent company, for hints. For instance, the Chinese ecommerce giant has been rapidly expanding its chain of Freshippo (also known as Hema) stores.

Will Lazada do the same? After all, it’s running an online grocery shopping platform in Redmart and plans to expand the business beyond Singapore by the second half of 2019. However, Yin Jing, co-president of Lazada Group, has told the media that the company isn’t planning to venture into offline retail anytime soon.

“We’ll never say never, but I think our current focus is still empowering brands and sellers to run their businesses online as a starting point,” Yin said. Without disclosing the full details, he added that the company will be launching tools this year to “help partners connect the dots between the online and offline world.”

Yin Jing, co-president of Lazada Group / Photo credit: Alibaba

In a sense, Lazada is already heavily investing in offline initiatives compared to other regional ecommerce players. It claims to be the largest business-to-consumer logistics firm in Southeast Asia. Poignant said that 80 percent of its parcels are processed through Lazada’s supply chain, which consists of 31 warehouses.