Profitability in Lazada’s basket for IPO

IN FOCUS

In today’s newsletter, we look at:

• Lazada downsizing to profitability
• Buttonscarves’ bootstrapped bound
• Temu’s underdog status in Southeast Asia

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Hi readers,

Whenever we need more dog food at home, I turn to either Lazada or Shopee and try to find the best deal for the brand my beagle wants. These past few months, I’ve ended up buying mostly from Shopee, which offers more generous discounts.

As my colleague Melissa points out in this week’s first Big Story, it appears that Lazada has recently shifted its focus to making a profit.

This has taken drastic measures like layoffs, as well as a bit of copying from low-cost competitors like Temu. Lazada recently launched Choice in Southeast Asia – a move that is said to be its response to Temu.

This strategic shake-up has affected Lazada’s gross merchandise value, which is estimated to have shrunk in 2023 compared to the previous year. The company, however, did hit EBITDA profitability for the first time in July of this year.

Turning a profit means Lazada may now be primed for an IPO. However, it will still be haunted by the shadows of fierce competitors like Shopee and TikTok Shop, which are both larger in many Southeast Asian markets.

But don’t count Lazada out just yet. There are still chances for the Alibaba-backed platform to catch up to Sea Group’s Shopee. Read Melissa’s piece to find out more.

In the second Big Story, I take a closer look at Buttonscarves’ growth toward becoming Indonesia’s “Louis Vuitton of scarves,” which was pushed by its embrace of live selling. And to cap things off, this edition’s Hot Take explores Temu’s underdog status in Southeast Asia.

— Miguel

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THE BIG STORIES

1️⃣ From layoffs to profit: Is Lazada finally ready for an IPO?

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THE HOT TAKE

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Build better products, faster

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