Alibaba-backed Lazada says it’s ‘confident’ it can withstand competition in Southeast Asia

on Jul13

Aimone Ripa di Meana, co-founder and chief marketplace officer of Lazada Group, speaks at the Rise conference in Hong Kong, China, on July 12, 2017.

Anthony Kwan | Bloomberg | Getty Images

Aimone Ripa di Meana, co-founder and chief marketplace officer of Lazada Group, speaks at the Rise conference in Hong Kong, China, on July 12, 2017.

Aimone Ripa di Meana, co-founder and chief marketplace officer at Lazada, said the company’s on-the-ground knowledge about each of the six regional markets in which it operates, its logistics network and the backing from Jack Ma’s Alibaba Group will be advantageous in the face of competition.

“We feel very confident about what we’ve built so far — we have a very unique approach to business,” Meana said. “Having built teams that have been with us for a long time that function in a very organic way that know the markets, know the complexities that are in each market, which can’t easily be replicated. I don’t think knowing how to do (business in) Singapore is in any way relevant to how you build your business in the Philippines or Indonesia.”

He explained that the differences in each Southeast Asian market went beyond people and languages spoken. It involved things including the infrastructure set-up in each country to facilitate logistics and delivery, how the syntax of each local language affected the way search worked and also the behaviors of small and medium enterprises in listing their products and structuring their catalogs.

But the region is still lucrative for e-commerce as millions of first-generation internet users embrace online shopping. A frequently cited study from Google and Singapore investment firm Temasek Holdings predicted the region’s internet economy to grow to $200 billion by 2025, driven mostly from growth in e-commerce. Meana said Alibaba’s investments into Lazada, and the speculation surrounding Amazon’s eventual push into the market, underscored the potential of the region.

“We are in a market that is at the beginning of its curve,” said Meana. “While obviously the numbers are vast and exciting, I think the opportunities that lie ahead are much larger than anything that’s been built behind us.”

To be sure, Amazon has aggressively invested in markets outside the U.S. to grow its stake. For example, reports in India said Amazon has invested more than $2 billion to-date to compete with local e-commerce players Flipkart and Snapdeal.

Earlier this year Alibaba upped its stake in Lazada from 51 percent to about 83 percent, with over $2 billion invested into the company. Its affiliate Ant Financial, earlier this year, merged with Lazada’s helloPay platform to bolster payments processing capabilities.

The backing allowed Lazada to move into Alibaba’s ecosystem and make use of all of the innovation and features for sellers on their platform, said Meana. Those include offerings like a business intelligence portal and new promotional features that allow sellers to create shop decorations in the same way they would’ve done for an offline business.

To offer consumers more variety, Lazada launched its Taobao Collection store that curates and sells about 4 million products in English from Alibaba’s Taobao marketplace — which is inaccessible to many non-Chinese speaking consumers in Southeast Asia.

Logistics operations, which Meana said is a key differentiator for Lazada, also benefit by tapping into Alibaba’s technology, processes and approaches to delivery. Currently, Lazada has about 100 logistics partners in the region and its operations are split into two areas of business: last-mile delivery and a control tower that coordinates the most effective means of delivering parcels from merchants to customers.

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