Lazada’s Magnus Ekbom on Indonesian ecommerce and crushing competitors

Magnus Ekbom, chief strategy officer of Lazada Group

Magnus Ekbom sits quietly in the corner of Lazada Indonesia’s semi-new office in Jakarta’s Kuningan district, tapping away on a laptop. There’s no waiting room or plush furniture in Lazada’s open air workspace, and everything about Ekbom seems unpretentious. He looks up from his computer and briefly gives the standard office tour.

For those who’ve been living on the moon for the past few years, Lazada Group is one of Southeast Asia’s biggest and most successful business-to-consumer ecommerce marketplaces. The site was originally launched, incubated, and invested in by German web company builder Rocket Internet. However, according to Ekbom, Rocket plays a minimal role in the company today, and is not the controlling shareholder.

“I want to make it clear that today Rocket is a negligible factor,” says Ekbom. “Many people think that Rocket, Lazada, and Zalora are one big company, when it couldn’t be further from the truth. It was our founding incubator. Rocket was active in our first year here. They helped with fundraising, implementing the first tech platform, recruiting talent, and benchmarking. But today, there are two other Lazada investors who are equal to Rocket in terms of size.”

Ekbom has served as CEO of Lazada Indonesia since 2012. However, today he reveals that he is now the chief strategy officer for all of Southeast Asia, and that he’s named Elizabeth Craft and Alexandre Dardy as his successors. The pair will be running the firm in Jakarta as co-CEOs.

That said, as Indonesia is still a very important market to Lazada, Ekbom says he will still spend most of his time in Jakarta. According to him, despite the transition, things at Lazada Indonesia should still be business as usual. “The team is now stronger than ever, and it’s always good to get a bit of new blood into the management roles,” says Ekbom.

Steady lies the crown

In recent months there’s been a great deal of media attention on Indonesia’s ecommerce industry. One of the most notable events was when one of Indonesia’s largest family-owned conglomerates Lippo Group announced that it invested US$500 million into its own ecommerce venture MatahariMall. The idea is that MatahariMall would become the largest ecommerce site in the nation – “the Alibaba of Indonesia,” according to Lippo.

Tech in Asia later learned that Bank of America Merrill Lynch and Credit Suisse are currently raising US$200 million for MatahariMall as part of the US$500 million that Lippo claimed to have already allocated to the project. This was important because it revealed that the venture didn’t actually have US$500 million of liquid capital in its coffers, but instead is banking on Lippo’s ability to get money. There’s no doubt that Lippo can come up with US$500 million, but whether it will place that money in an account for MatahariMall is another matter entirely. On top of that, the site was due to launch some time in March or April, but is now delayed until summer.

Ekbom says Lippo Group runs one of the oldest and best-established offline retail businesses in the archipelago, and it would be foolish of Lazada Group not to take it seriously. He voices a bit of admiration for the company, but says:

They don’t need to talk about how much money or resources they have. If someone gave me US$500 million, I honestly wouldn’t know what to do with it. I don’t even know how you can spend that much on a brand new ecommerce business in Indonesia. […] If I were Lippo, I would just sneak up on the market and surprise everyone. If John Riady had done that, then MatahariMall may have caught us off guard.[…] But the way they’ve done things over the past couple months, it’s only given us more time to get ready. They lost the big element of surprise.