Is the Lazada-Uber-Netflix alliance a game changer?

Image credit: lightwise / 123RF Stock Photo.

Southeast Asia’s biggest ecommerce marketplace Lazada made headlines recently with a blockbuster launch of a membership program in Singapore called LiveUp, which offers free deliveries and rebates from Lazada, Lazada-owned online grocer Redmart, Netflix, and Uber.

It’s widely seen as Lazada’s answer to Amazon Prime, in anticipation of Amazon’s delayed entry into the region. But is it as good as advertised? Will it be a compelling moat for LiveUp partners against their competitors? Let’s break it down.

First impressions: not bad

What the welcome email looks like.

I was pleasantly surprised by the perks. I use Netflix, Redmart, and Uber regularly. Lazada on occasion. I rarely order on UberEats, but I see myself using it weekly from now on. These are all widely used services in Singapore, which means LiveUp has the potential to attract a wide consumer base.

The benefits seem compelling, and the signup process is smooth. You can activate LiveUp by either ordering through RedMart or Lazada. You’ll then receive an email with two buttons: one to redeem credits on Netflix, the other for Uber.

I was done in seconds, and I’ve already redeemed about half the value of the usual S$49.90 (US$36) annual membership fee.

I can see this appealing to the so-called “online lifestyle natives,” which is what Lazada calls people who primarily go online for all sorts of services.

Not just a simple perks program

On the surface, LiveUp may not look too different from existing rewards or cashback programs like Perx, Shopback, or Grab’s GrabRewards.

There is a difference though. To understand how LiveUp might work, look at what made Amazon Prime successful in the first place. The key psychology is this: when consumers pay in advance for a service, they’re essentially committing to the view that it’s worth paying for.

And because people are inclined to show consistency in their actions, they’re likely to use Amazon’s services and stay loyal to them, and they often spend more than they otherwise would if they did not subscribe to Prime.

There’s also the desire to redeem sunk costs: once people put money into something, they’re are more likely to want to get their money’s worth, again, often to the extent of spending more than they expect.

Further, Prime is not just offering discounts, but also lowering buying friction by offering free and fast deliveries with every order. The net effect is greater loyalty towards Amazon.

Lazada Singapore could win big

A competitive edge

A wait-and-see attitude