What’s Lazada’s future after hefty job cuts? Insiders tell us

Update (January 11, 7:30 p.m. SGT): This article was updated to clarify that our earlier report on LazMall Vietnam shutting down is inaccurate.

Southeast Asian ecommerce platform Lazada greeted 2024 with a massive downsizing of its staff across all countries it has a presence in. We reported that approximately 30% of overall staff were axed, out of an estimated headcount of 8,000 to 10,000.

So, what’s next? Sources tell Tech in Asia three immediate things will happen. The first one is a merger of Lazada’s LazMall and Marketplace. LazMall is a curated platform with verified brands, while Marketplace is a free-for-all space.

Image credit: Timmy Loen

Our sources couldn’t exactly detail what the end result will look like, but the appointment of Jason Chen as group business officer in August last year was to help facilitate this plan, they say.

Second, a leadership reshuffle is on the cards. According to our sources, Kaya Qin will be appointed as Lazada Malaysia’s CEO to replace Alan Chin, who was laid off. Qin was the group COO and CEO of the ecommerce platform’s Vietnam unit.

The third move is centralization. Sources tell us that Lazada will be reducing its headcount in each market, and that the remaining staff will directly report to Singapore and with “more accountability to China.” The final structure of Lazada isn’t known yet as discussions are ongoing.

Why make these moves? At home, Alibaba finds itself rapidly losing ground against rival PDD Holdings, which has surpassed it in market value.

Abroad, Lazada has not captured market leadership in Southeast Asia despite a US$7.4 billion investment from its parent Alibaba Group. With the regional ecommerce market hitting a ceiling, that dynamic is unlikely to change.

These trends may have compelled Alibaba to cut its losses and gun for profit in Southeast Asia, conserving resources to defend its home turf.

Analysts say the cuts may be aimed at presenting a stronger income statement ahead of an IPO. But looking at the abrupt and sudden nature of the layoffs, a former senior executive at Lazada speculates that the company’s working toward a trade sale deadline.

‘Since August last year’

Founded in 2012 under the Rocket Internet banner, Lazada has a presence in six countries: Indonesia, Malaysia, the Philippines, Thailand, Singapore, and Vietnam.

Despite its early start, Lazada was overtaken by Shopee with its slew of incentives and discounts. Analysts are also expecting TikTok Shop to add to the competition after the Chinese social media juggernaut acquired a controlling stake in Indonesia’s Tokopedia.

But the writing was on the wall, “since August last year,” ex-Lazada executives tell us. The company, one source says, had been doing a group-wide reorganization, moving staff around to different departments.

A history of leadership shuffles

No reprieve for Lazada staff