How Lazada is improving its logistics offering for sellers and shoppers

Shopping online can involve a rollercoaster of emotions. The rush of finding a great deal, especially during major sales events like 11.11, leads to the euphoria of confirming a purchase, before it all gives way to the anticipation of waiting for the package to arrive.

There’s much ado about the first couple of stages; merchants and ecommerce platforms put a lot of marketing dollars into surfacing their latest offers to shoppers. However, delivery and logistics are as integral to the shopping experience as the discovery and buying phases are.

Ecommerce players are aware of this aspect, and that’s why both international and regional platforms have put together and launched in-house solutions. In doing so, they’re able to provide a better customer experience from start to finish.

A one-stop logistics solution

The importance of logistics has been ingrained into Lazada Group’s operations since its founding in 2012, according to Andy Huang, the company’s chief logistics officer.

“We focus on building up an internal network – our product, systems, and mechanisms – to help our sellers give customers speed and assurance in the delivery experience,” he says.

Andy Huang, chief logistics officer at Lazada Group / Photo credit: Lazada Group

In the early days, the firm’s logistics arm primarily worked in two separate ways: one side focused on third-party providers, while the other managed customer parcel delivery. In August, it combined both units into the rebranded Lazada Logistics as part of streamlining efforts. The move is aimed at making the new unit a one-stop shop for logistics solutions, offered to the brands and sellers that work with Lazada. By taking this approach, the company can bring value to the overarching logistics infrastructure and ecosystem.

“Our logistics arm allows us to better control capacity and volume, ensure continuous service to sellers and buyers, and create a better experience for everyone involved,” says Philippe Auberger, chief logistics officer at Lazada Indonesia. This enables Lazada to have full control to customize and optimize the delivery journey of each package, maximizing the customer experience.

A tech-led evolution

The advancements go beyond restructuring. In order to keep up with the changing demands of users, Lazada is also consistently investing in new technologies to automate logistics processes and provide integrated fulfillment and supply chain management services.

The firm has tapped into its own experiences as a major player in the region for the past decade to build its own in-house logistics platform, Apollo, which aims to streamline the entire logistics journey.

Huang says that among the benefits of Apollo is how it can leverage intelligent routing empowered by algorithms to give delivery drivers more efficient routes and thus faster delivery for customers. The platform can also generate more accurate estimates on the time it takes for parcels to reach their destination by using predictive tools.

On the other side of the coin, merchants are also able to track and manage the items they send out.

The use of Apollo “tremendously reduces manual operations as it can automate allocation intelligently based on the venture’s business strategy and provide real-time visibility of the network health,” observes Huang. “This enables a proactive planning and optimization of the network.”

Photo credit: Lazada Group

This is particularly important during major campaigns such as the upcoming 11.11 sale, when “volumes can increase by up to 30 times,” says Cheng Pak Wing, regional performance and fulfilment senior manager at Lazada. “With Apollo, spikes in volumes can be better anticipated, and proactive measures, such as bringing in more staff and drivers, can be taken to address the increased demand.”

The next stage of the evolution

As it continues to improve its logistics offerings, the company has also introduced multichannel logistics (MCL) services as part of its Lazada Logistics rebranding initiative. These are services that help merchants, ecommerce enablers, and brands on Lazada fulfill their logistics obligations – across all channels – seamlessly.

Huang says that the overarching idea is to provide sellers with a “unified brand experience” across all the platforms they operate on, offering them greater agility and flexibility on inventory control as well as simplifying order management processes. It also addresses a common pain point: the high operating costs that come with order fulfilment.

Relieving merchants of these concerns allows them to focus on sales and marketing, which in turn improves the overall customer experience.

“Connecting logistics performance and the customer experience is one of the key things we’re doing to make sure that nothing is working merely in silo,” Cheng says. “We’re not just improving things for the sake of improving things – we’re improving logistics to make sure that the customer gets a better experience.”

Photo credit: Lazada Group

For its part, the ability to roll out a one-stop solution like MCL at the regional level is indicative of Lazada’s growth and expertise. “It’s a showcase of Lazada’s advanced supply chain infrastructure and logistics capabilities, as well as a reflection of our confidence in our logistics capabilities and a testament to our commitment to provide better customer experience,” Huang says.

What comes next?

As ecommerce continues to grow in Southeast Asia, so will the importance of logistics. With the region’s well-known diversity in geography and population distributions, getting packages where they need to go will continue to be challenging in many places.

“We believe that an intelligent, integrated logistics and supply chain network for ecommerce is critical for improving the customer experience and efficiency for businesses, which is what we want to offer with Lazada Logistics,” shares Huang.

Looking ahead, the ecommerce major plans to offer sellers and partners who provide expedited services with more incentives, such as increased store visibility and higher traffic. This will, in turn, result in shorter delivery lead times and an overall better customer experience.

“Customer demands are getting more diversified, so we need to come up with better solutions to meet those demands,” Huang affirms. “The continued development of our logistics infrastructure has a very important role to play as we move forward.”

With additional reporting by Stefanie Yeo

Founded in 2012, Lazada Group is a leading ecommerce platform in Southeast Asia. Its Lazada Logistics arm is a ​one-stop solution for Southeast Asian brands and sellers.

Learn more about Lazada Logistics here.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.