Lazada, as one of the largest e-commerce platforms in Southeast Asia, carries Alibaba Group’s ambitions in the region. Since it was founded by Indonesian e-commerce company Gearbest in 2012, Lazada has become an ideal place for sellers to enter the Southeast Asian market through continuous development and expansion. This article will explore Lazada’s development history, market overview, platform development, traffic situation, logistics situation, payment methods, entry threshold and restrictions, and marketing strategies.
1. Lazada’s development history.
Lazada’s development began in 2012, when it was founded by Indonesian e-commerce company Gearbest and officially launched in 2014. In February 2016, Alibaba Group completed its full acquisition of Lazada, further promoting its expansion in the Southeast Asian market. Alibaba’s involvement has enabled Lazada to gradually emerge in the international market and become one of the largest e-commerce platforms in Southeast Asia.
2. Market overview.
Lazada’s market overview shows its strong position in Southeast Asia. The e-commerce penetration rate in the six Southeast Asian countries exceeded 30% in 2018, while Indonesia and Vietnam exceeded 50%. This figure reached 58% in 2019 and is expected to exceed 60% by 2023. In Indonesia, Thailand, Vietnam and other countries, Lazada has exceeded 50% e-commerce penetration, and these markets still have huge room for growth.
3. Platform development.
As one of the largest e-commerce platforms in Southeast Asia, Lazada has achieved remarkable results in sales. In 2020, the Lazada platform achieved sales of more than 11.8 billion yuan, with a five-year compound annual growth rate of 133%. Despite the impact of the epidemic, platform sales in the first quarter of 2021 increased by 126% year-on-year to US$492 million. As of the second quarter of this year, Lazada’s GMV reached US$32 billion, a year-on-year increase of 48%. This shows that despite the challenges, Lazada has maintained a strong growth trend.
4. Traffic situation.
In terms of traffic, Lazada performed well. The number of platform users has reached 170 million, and it continues to grow every year. In Southeast Asia, Lazada has an average of 1.7 million daily active users and more than 5 million monthly active users. Lazada is the only e-commerce platform with daily orders exceeding one million, which provides strong support for its broad market prospects in Southeast Asia.
V. Logistics.
Lazada provides fast delivery services through its logistics platform LazMall, covering Indonesia, Vietnam, the Philippines and Malaysia. However, it is worth noting that Lazada’s logistics system currently does not support international express services, and cross-border logistics needs to be carried out through overseas warehouses or other means. The platform has established its own logistics system in Indonesia, Vietnam, the Philippines, Malaysia, Thailand and Singapore, ensuring that local consumers can enjoy more efficient logistics services.
Six. Payment.
Lazada uses LazMall as a payment channel and cooperates with third-party payment providers to provide a variety of payment methods. Among them, “BILIBILI” is one of Lazada’s main payment methods. This is a digital credit card that provides consumers with the convenience of online shopping. In addition, Lazada also has a “VAT” service, which facilitates users to pay anywhere in the form of a virtual card.
Seventh, entry thresholds and restrictions.
To enter the Lazada platform, sellers need to meet a series of conditions, including company registration for more than one year, providing a business license, a registered capital of not less than RMB 300,000, providing merchant contact information and logistics options, etc. In addition, sellers are not allowed to have stores on other e-commerce platforms to ensure their exclusivity on the Lazada platform. These thresholds and restrictions are designed to ensure that merchants on the platform have certain strength and experience to provide users with a better shopping experience.
Eighth, marketing strategy.
Lazada is committed to working with social media to increase brand exposure and user attention through various content creation. Live broadcasts, various marketing activities, content cooperation and community activities have become effective means for the platform to promote sales. Lazada encourages sellers to actively participate and interact with consumers in various ways to improve conversion rates and user stickiness.
In the future, Lazada will continue to optimize traffic distribution, improve category prices, strengthen store management, etc. to enhance user experience and ensure its leading position in the e-commerce market in Southeast Asia. At the same time, Lazada is constantly innovating and further consolidating its position in the Southeast Asian market through cooperation with other e-commerce platforms and the launch of independent apps.
In general, as a leader in the Southeast Asian e-commerce market, Lazada not only provides sellers with broad market opportunities, but also brings convenience and diverse shopping options to consumers. In the future, Lazada is expected to continue to play a leading role in the Southeast Asian e-commerce field and become the preferred platform for more brands and merchants to enter the regional market.