Lazada

Lazada Group (t/a Lazada) is an international e-commerce company and one of the largest e-commerce operators in Southeast Asia, with over 10,000 third-party sellers as of November 2014, and 50 million annual active buyers as of September 2019.[3][4][5]

Lazada Group
TypePrivately held company
IndustryE-commerce
FoundedMarch 27, 2012 (2012-03-27)
FounderMaximilian Bittner[1]
Headquarters
Bras Basah, Singapore
Area served
Southeast Asia, except Laos, Cambodia, Brunei, Myanmar and East Timor
Key people
Jiang Fan (Group Chairman)[2]
James Dong (Group CEO)
Lucy Peng (Executive Chairwoman)
ServicesE-commerce
(Online shopping)
OwnerAlibaba Group
SubsidiariesLazada Vietnam
Lazada Singapore Pte. Ltd
Websitewww.lazada.com

Backed by Rocket Internet, Maximilian Bittner founded Lazada in 2012 as a marketplace platform that sells inventory to consumers from its own warehouses.[1] Lazada modified its business model the following year to allow third-party retailers to sell their products on its platform too. The marketplace accounted for 65% of the company's sales in 2014.[6]

Lazada operates in six countries: Singapore, Malaysia, Indonesia, Thailand, Vietnam, and the Philippines.[7] The company raised over $685 million from investors such as Tesco, Temasek, Summit Partners, JPMorgan Chase, and Kinnevik AB, before Alibaba Group acquired a controlling stake in April 2016 to support its international expansion plans.[8][9][10][11][12][13]

Often, Lazada is compared to companies in Southeast Asia with a similar e-commerce platform, such as Shopee, Tokopedia, and Bukalapak.[14][15]

History

In 2012, Maximilian Bittner founded Lazada with the intention of establishing an Amazon-like business model in Southeast Asia, to take advantage of the nascent online consumer market and Amazon's weak presence in the region.[16][17] Lazada's e-commerce websites soft launched in 2012, before iOS and Android mobile apps for its platform were launched in June the following year.[18][19]

The company commenced operations in Singapore in May 2014, where it is currently headquartered.[20][21] In 2014, Lazada recorded $152.5 million in net operating losses, with net revenues of $154.3 million, although the percentage of losses—relative to gross merchandise value—was lower than the previous year due to growth in marketplace sales to $384 million that year, compared to $95 million in 2013.[22][23]

Lazada faced challenges in 2015, when consumer preference for brick and mortar shopping was high. Less than 1% of people shopped online, compared to the international average of 10% at that time. This meant that Lazada had to tackle issues associated with the lack of credit cards, the concomitant requirement for cash on delivery systems, and the need for reliable delivery—especially in rural regions.[24]

In March 2016, Lazada claimed it had become the largest e-commerce player in Southeast Asia, after recording $1.36 billion in annual gross merchandise value across the six markets it operates in.[25]

In September 2018, the company introduced LazMall on its platform to encourage its users to purchase from authentic brands. New services such as a 15-day return policy and next-day delivery options were also put in place.[26]

In December 2019, Lazada partnered with Citibank to launch a new credit card, first in Singapore, and subsequently in other countries.

Countries served by Lazada as of 4 October 2022:
  Available

Financing

Lazada has raised multiple rounds of funding since its founding in 2012.

In April 2016, Alibaba Group announced its intention to acquire a controlling stake in Lazada by paying $500 million for new shares, and buying $500 million worth of shares from existing investors.[27] Tesco sold its stake in Lazada—totalling 8.6%—to Alibaba for $129 million.[28] Alibaba based its investment on the growth of the middle class in Southeast Asia, having estimated that the regional population with a disposable income of $16 to $100 a day would double to 400 million people by 2020.[29]

In June 2017, Alibaba injected $1 billion in Lazada, raising its stake from 51% to 83%.[30]

Date Funding Investors References
September 2012 Undisclosed JPMorgan Chase [8]
November 2012 $40 million Kinnevik AB [8]
December 2012 $26 million Summit Partners [8]
January 2013 $20 million Tengelmann Group [8]
June 2013 $100 million Verlinvest (lead), Holtzbrinck Ventures, Kinnevik AB, Summit Partners, Tengelmann Group [9]
December 2013 $250 million Tesco, Access Industries, Kinnevik AB, Verlinvest [10]
November 2014 $249 million Temasek (lead), Kinnevik AB, Verlinvest, Rocket Internet [11]
April 2016 $500 million Alibaba Group (acquisition) [27][28]
June 2017 $1 billion Alibaba Group [30]
May 2022 $378.25 million Alibaba Group [31]
September 2022 $912.5 million Alibaba Group [31]

Leadership changes
Role Outgoing Start End Incoming References
Group CEO Maximilian Bittner March 2012 March 2018 Lucy Peng [32]
Group CEO Lucy Peng March 2018 December 2018 Pierre Poignant [33]
Group CEO Pierre Poignant December 2018 June 2020 Chun Li [34]
Group CEO Chun Li June 2020 June 2022 James Dong [35]

Marketing

Television shows
  • Lazada Garbolnas 12.12 (RCTI, SCTV & Indosiar)
  • Lazada Super Party (RCTI, SCTV & Indosiar)
  • Lazada 11.11 Super Show (TV3)

Controversies

Counterfeit products

Lazada faces issues of counterfeit products being sold on its platform. The company has insisted a zero tolerance policy towards such products. As a response they have launched LazMall in 2018,[36] The Intellectual Property Office of the Philippines recorded Lazada to be the largest source of reports for counterfeit products it received in the first half of 2023 at 69 percent.[37]

LazEarth

Lazada launched its LazEarth campaign in April 2022 to reduce plastic waste in its products and packaging.[38] This coincided with the launch of an Earth Day promotion, when 5,000 products labelled "sustainable" or "planet-friendly" were grouped into a promotional section on Lazada's platform, including polyester shirts, razors, electric toothbrushes, and more. Sustainability experts criticised the promotion as many of the products advertised were plastic disposable products, and offering discounts for such products did little to reduce plastic waste.[39]

Boycott by the Royal Thai Army

Lazada faced a boycott by the Royal Thai Army in May 2022 due to a controversy arising from a TikTok video promoting a sale by the company. Posted on 5 May, the video included a depiction of a woman using a wheelchair, which was perceived as an attempt to mock the younger sister of King Vajiralongkorn, Princess Chulabhorn. Chulabhorn uses a wheelchair as a result of lupus. 245,000 members of the army were prohibited from patronising Lazada as a result.[40]

See also

References
  1. Ansuya Harjani (17 April 2014). "Meet the man behind the 'Amazon of Southeast Asia'". CNBC. Retrieved 30 November 2019.
  2. "Alibaba replaces Lazada CEO in South-east Asia shakeup". Garage - The Business Times. 3 June 2022.
  3. Huang, Claire (6 November 2014). "Lazada grows revenue and stable of online 3rd-party sellers". The Nation.
  4. Zhang, Jane (11 September 2019). "Lazada says it is e-commerce leader in Southeast Asia with more than 50 million buyers". South China Morning Post.
  5. "Sea's loss widens on investment in Shopee e-commerce platform". Business Times Singapore. 23 August 2018.
  6. Yaw, Min Jie (7 November 2014). "Lazada's Marketplace platform accounts for 65% of its sales revenue". e27.
  7. Sanchez, Luis (28 January 2020). "These 2 Companies Dominate E-Commerce in Southeast Asia". The Motley Fool. Retrieved 4 October 2022.
  8. Russell, Jon (22 January 2013). "Lazada, Rocket's Amazon clone in Asia, raises 'close to $20m' to develop its e-commerce marketplace". TNW.
  9. "Rocket Internet's e-commerce giant Lazada raises $100M". Vator. 20 June 2013.
  10. Grant, Rebecca (9 December 2013). "Amazon clone Lazada raises jaw-dropping $250M to mainstream e-commerce in Southeast Asia". VentureBeat.
  11. Purnell, Newley (1 December 2014). "Lazada Group Raises $249 Million, Led by Singapore's Temasek". Digits - Wall Street Journal.
  12. Russell, Jon (29 November 2014). "Lazada, Rocket Internet's Amazon Clone In Southeast Asia, Raises $250M Led By Temasek". TechCrunch.
  13. Choudhury, Saheli Roy; Kharpal, Arjun (12 April 2016). "Alibaba buys controlling stake in Southeast Asian retailer Lazada". CNBC.
  14. "Here's how Lazada lost its lead to Shopee in Southeast Asia (Part 1 of 2)". KrASIA. 24 March 2021.
  15. Florene, Ursula (4 June 2021). "Shopee pulls ahead of Tokopedia in Indonesia as e-commerce thrives". KrASIA.
  16. Mac, Ryan (31 July 2014). "Germany's Samwer Brothers To Become Billionaires With Rocket Internet IPO". VentureBeat.
  17. Lunden, Ingrid (12 November 2012). "Samwers' Online Shopping Mall Lazada Gets $40M From Shareholder Kinnevik To Push The Amazon Model In International". TechCrunch.
  18. "Lazada launches mobile shopping app for Android OS". The Nation. 19 June 2013.
  19. Russell, Jon (20 March 2012). "T-minus 10: Rocket Internet's ecommerce clones are aiming to conquer Southeast Asia". TNW.
  20. Tan, Vanessa (27 May 2014). "Lazada launches in Singapore with a new site and logo". Tech in Asia.
  21. Ho, Victoria (4 June 2014). "Lazada launches in its home ground of S'pore". AsiaOne.
  22. Cunningham, Susan (12 May 2015). "Rocket's Lazada And Zalora Lost $235.3 Million In 2014 But Are Moving Toward Profitability". Forbes.
  23. Millward, Steven (20 March 2015). "Shoppers on Lazada last year spent $350 million as ecommerce booms in Southeast Asia". Tech in Asia.
  24. Home-field advantage, The Economist, 7 March 2015
  25. "Lazada claims to be SEA's No 1 e-commerce player". Digital News Asia. 10 March 2016.
  26. "Lazada launches Southeast Asia's biggest mall 'LazMall'". Primer. 3 September 2018. Retrieved 22 September 2021.
  27. Chen, Lulu Yilun; Wang, Selina (12 April 2016). "Alibaba Expands in Southeast Asia With $1 Billion Lazada Deal". Bloomberg.
  28. "Tesco starts sell-off ahead of results with Asian disposal". BBC News. 12 April 2016. Retrieved 12 April 2016.
  29. "Southeast Asia's middle class is diverse, confident, and growing richer by the day". QZ. 11 January 2016. Retrieved 4 July 2016.
  30. Russell, Jon. "Alibaba ups its stake in International's Lazada with $1 billion investment". TechCrunch. Retrieved 20 December 2017.
  31. Neo, Kristie (1 September 2022). "Alibaba invests another $912m in Singapore-based Lazada". Nikkei Asia. Retrieved 4 October 2022.
  32. Russell, Jon (19 March 2018). "Alibaba doubles down on Lazada with fresh $2B investment and new CEO". TechCrunch.
  33. "Lazada veteran Pierre Poignant is replacing Lucy Peng as CEO | The Star". The Star. 13 December 2018.
  34. Gan, Joe (26 June 2020). "Lazada appoints a new CEO". Tech in Asia. Retrieved 29 June 2020.
  35. Chevi, Deepa (4 June 2022). "Alibaba Group names new Lazada CEO in leadership shuffle". Marketing Interactive. Retrieved 4 October 2022.
  36. Relativo, James (6 September 2022). "Lazada insists 'zero tolerance' for fake items, but can't inspect them one by one". The Philippine Star. Retrieved 14 October 2023.
  37. Baclig, Cristina Eloisa (13 October 2023). "Anti-Piracy Month: Lazada tops PH list of online fake goods source". Philippine Daily Inquirer. Retrieved 14 October 2023.
  38. "Lazada shows sustainability commitment with LazEarth campaign". Marketing Interactive. 20 April 2022. Retrieved 5 October 2022.
  39. Hicks, Robin (27 April 2022). "Critics question labelling of plastic products as 'eco-friendly' in Earth Day promo". Eco-Business. Retrieved 5 October 2022.
  40. Hoskins, Peter (10 May 2022). "Thai army boycotts e-commerce giant Lazada over video". BBC. Retrieved 10 May 2022.
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