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News  15, Aug 2013

Lazada launches Marketplace platform, wants to be the Alibaba of SEA

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Lazada has launched an online platform for third-party sellers who aspire to be visible on the region’s most popular online shopping mall.

Lazada, an Amazon-like e commerce platform, has just officially launched its Marketplace in all the countries it is operating in. That includes Southeast Asian countries Malaysia, Vietnam, Indonesia, Thailand and Philippines.

What exactly is the Marketplace? It allows SMEs, distributers and retailers to launch an online shop on the Lazada platform, giving them access to Lazada’s community of followers and customers across the region. Lazada Marketplace merchants are able to build their catalogue, update inventory, and create new listings in their virtual shop via a store management tool synchronized with Lazada’s back-end IT system. Lazada also allocates a dedicated account manager to merchants who will educate on e-commerce best-practices and advice on further growth potential.

Maximilian Bittner, CEO of Lazada said,

“The number of partnership requests we received made us realize the massive demand and we are glad to provide this opportunity to all merchants in the region. We started to develop our Marketplace platform in late 2012 as it fits perfectly with our goal to continuously expand our product offering and service level to our customers and partners.”

Bittner also believes the platform has the powerful “side-effect” of developing an online ecosystem which will create business opportunities supporting economic growth and job creation in Southeast Asia.

Some of its early users onboard include Malaysia-based Pineapple Computers, which says that the business has grown by 38 percent since joining the Marketplace, thanks to access to Lazada’s huge customer base. Philips Electronics will also be partnering with Lazada to make its inventories more accessible.

Lazada is operating a multi-category online shopping mall with almost two hundred thousand products listed. Opening up and allowing SMEs to have access to its distribution channel echoes the footstep of the widely successful Alibaba Group. China-based Alibaba Group operates Alibaba.com, the world’s largest online business-to-business trading platform for small businesses, and Taobao, China’s largest consumer online shopping platform, among other internet entities. In 2012, two of Alibaba’s portals together handled CNY1.1 trillion (US$170 billion) in sales, more than competitors eBay and Amazon combined.

While Alibaba Group has diversified into several other verticals, all its ventures have the same focus: e-commerce and small-and-medium-sized enterprises.

Lazada seems to be taking a page from Alibaba, allowing SMEs to start their online storefront on its platform, and focusing on helping them succeed. It provides customized support for logistical arrangements, online marketing initiatives and a tailored shop-in-shop visible to its huge visitor base for its partner merchants.

While Lazada is unavailable for regional merchants to reach out to customers in Singapore (since they don’t have a presence here), Singapore merchants can set up an online shop with Lazada to gain access to regional customers. However, it is currently unclear whether the Marketplace offers cross country logistics support.

It is also worth noting that Lazada has raised more than US$236 million in financing rounds to fuel its growth in Southeast Asia, investing in supply chain, logistics, warehousing, mobile commerce, regional network of e-commerce services, localization, not forgetting hiring as well as marketing. The company foresees US$6  to 7 billion in sales over the next few years.

Read Also: How much are Malaysians spending on Lazada and Zalora?

Alibaba and Shopify wants a slice of South Asia’s e commerce pie too

Alibaba on the other hand, has also started its globalisation plans. Last year, it set up a dedicated team to explore taking Taobao global. According to Daphne Lee, head of Taobao International, they are currently focusing on Hong Kong, Taiwan, Singapore and Malaysia. She says the company is taking things step by step and is now trying to forge logistics and payment partnerships.

Other than Lazada and Alibaba who are eyeing on the e-commerce pie in Asia, Shopify, a global e-commerce online store builder has also teamed up with SingTel to offer its solution in Singapore, Malaysia, Indonesia and India this year. To help Shopify’s merchants with their online marketing efforts and enhance the functionality of their storefronts, SingTel will also offer a range of optional services such as search engine marketing, social network integration, inventory management and email marketing capabilities. The pricing of these services are still unclear.

According to a response by Harley Finkelstein, Shopify’s Chief Platform Officer, to rumours of problem with the Shopify and SingTel’s offering in Singapore, thousands of new online businesses were created in Singapore through this partnership.

While Lazada, Alibaba and Shopify are different in terms of positioning, what’s similar is this: they are showing increased activities to acquire new e-commerce merchants in Southeast Asia. Merchants are definitely spoilt for choice now, scratching their heads on which platform to focus and put their efforts in.

Read Also: Here’s Lazada’s scoresheet on conquering Southeast Asian e-commerce

Jacky Yap

Jacky Yap

Having spent one year abroad in Shanghai under the NUS Overseas College Programme, Jacky has an avid interest in entrepreneurship and web based startups. Jacky used to run N-House, Singapore's first entrepreneurial themed residence in NUS, and was also part of the organizing team for Startup Weekend Singapore 2012. You can reach him at jacky [at] e27 [dot] co

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