Established in 2012 when eCommerce was virtually non-existent in Southeast Asia, Lazada’s journey has been heavily intertwined with the development of the region’s digital commerce industry as a whole. As Lazada celebrates its 10th anniversary this March, we look back at key company milestones and how these shaped the region’s eCommerce evolution.
Lazada Launches Amid Southeast Asia’s Connectivity Boom
In 2012, the world was becoming more connected than ever. In Southeast Asia, in particular, the internet penetration rate was increasing exponentially, led by countries like Singapore and Malaysia. This connectivity, paired with a burgeoning middle class that was wealth and increasing demand for consumption of goods and services, laid the groundwork for the region to become the next hotspot for business opportunities. ECommerce in the region, however, was still in its nascent stage at the time, making up just 1% of total retail sales in Southeast Asia. Lazada’s founders recognized online shopping’s huge potential in the region and launched the platform with the backing of incubator Rocket Internet in Malaysia, Thailand, Indonesia, the Philippines and Vietnam. In 2014, Lazada expanded to Singapore, where it set up its headquarters.
Building Trust in ECommerce
One of Lazada’s early innovations was introducing cash-on-delivery as a payment method. This feature was launched to cater to the specific needs of Southeast Asian countries, most of which were still cash-reliant in 2012, as well as to build trust with consumers and sellers at a time when eCommerce was still a fairly new concept. Thanks to this trust-building, Lazada was able to achieve more than US$1 billion in Gross Merchandise Value within just three years of its launch, making it the region’s largest eCommerce player. In a region at varying stages of e-payment and eCommerce adoption, Lazada has continued to evolve a suite of different options, including its own Lazada Wallet, that cater to existing preferences while easing customers into digital payments through intuitive solutions. This has boosted trust and safety in the wider eCommerce industry and has continued to set Lazada up for long-term success.
Investing in Logistics and Supply Chain Management
Lazada saw supply chain management as the backbone to any eCommerce operation, but the logistics landscape in Southeast Asia in 2012 was extremely fragmented, leading the company to quickly set its sight on investing in end-to-end logistics capabilities so that it could have complete control over the supply chain. Lazada currently has the region’s second-largest, most intelligent integrated logistics and supply chain network for eCommerce, with fulfillment centers across 17 cities. The company has also made extensive investments in warehouses and sorting centers, leveraging digital technologies that complement the partner network, cross-border and last mile arrangements. Thanks to this robust logistics network, Lazada was able to process over 5 million parcels on a daily basis in September 2021, handling about 80% of the first-mile volume and about 50% of the last-mile volume in house.
ECommerce as an Engaging Experience
To keep pace with customers’ growing demands and expectations, Lazada put emphasis on technologies that would create a seamless retail experience while also offering a wide assortment at the best prices. The platform offers a full range of tech-enabled tools and solutions to help sellers onboard, scale up and improve their operating efficiency. Lazada also pioneered the ‘shoppertainment’ trend with features designed to boost consumer engagement during the shopping journey. In November 2018, it launched LazLive, an in-app live streaming feature that allows users to interact with brands and sellers in real time. LazLive forms a closed loop for making purchases, offering a one-stop destination for eCommerce, education, entertainment and engagement. During last year’s 11.11 shopping festival, 18 million viewers tuned into LazLive, generating a year-on-year growth of 187% in GMV. Then in 2019, it rolled out its “See Now, Buy Now” feature, which allows sellers to showcase their products in real time and reach out to new customers to build loyalty.
Shaping Southeast Asia’s Digital Economy
Over the last decade, Lazada has contributed significantly to the digital commerce landscape and the wider economy across the six markets that it serves, with innovations that forever changed the digital ecosystem. These include the launch of online shopping festivals, also known as mega campaigns. In 2012, Lazada Indonesia became among the first initiators of Harbolnas, Indonesia’s National Online Shopping Day, which accelerated the country’s embrace of online shopping. Since then, Lazada’s mega campaigns have continued to expand, evolving beyond encouraging eCommerce adoption to becoming one of the most effective ways to empower brands and engage with consumers. Lazada also expanded into online groceries in 2016 with the acquisition of Redmart. While still a fledgling industry at the time, e-groceries have since become an integral part of consumers’ daily lives and proved especially essential during lockdowns and other stay-at-home measures implemented as a result of COVID-19. Another major milestone occurred in 2018 with the introduction of LazMall, Southeast Asia’s biggest virtual mall. Connecting shoppers with leading international and local brands, the channel set new standards in retail, offering consumers the assurance of product authenticity, free shipping and a 15-days return policy.
Building on its successes and achievements over the past decade, Lazada has set its vision to serve more than 300 million consumers and hit a GMV target of $100 billion per year. To achieve this goal, the company has already set in motion plans to continue expanding its platform tools and offerings, strengthen its logistics network and create a positive impact for customers, sellers and the Southeast Asian community as a whole.
WATCH: Lazada’s Key Milestones
Some of Lazada’s milestones and key achievements can be viewed through Time Machine, a new in-app feature launched as part of the company’s 10th anniversary.
“Lazada ECommerce Education” aims to inspire young talent to join the eCommerce industry
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