Lazada spends $30m to support Thailand growth

Lazada spends $30m to support Thailand growth

Lazada, the leading online department store in Southeast Asia, has earmarked US$30 million to cement its presence in Thailand and capitalise on the fast-growing local e-commerce market.

The Berlin-based firm is already fully operational in five regional countries: Malaysia, Vietnam, Indonesia, Thailand and the Philippines.

"After one year in operation in the five countries, Thailand is our fastest-growing and biggest online shopping site," said Maximilian Bittner, the chief executive of Lazada Southeast Asia.

"The country has become our operating hub in this region."

Thailand is also the biggest part of Lazada's marketing budget, said Mr Bittner.

Lazada has obtained $116 million in funding for regional expansion from Summit Partners, Kinnevik and JPMorgan.

Mr Bittner said Lazada has become a leader in online retail revenue, owning 30% of the market in Thailand and Southeast Asia thanks to aggressive marketing, a best-price guarantee and delivery within three days.

He attributed the company's low product costs to a strategy of purchasing directly from suppliers under the B2C (business to consumer) concept.

Online retail is poised for high growth in Southeast Asia, with regional GDP growing by 6-10% and the number of middle-class people expected to reach 150 million by 2015.

"Online retail shopping's market value in Southeast Asia is expected to account for up to 6% of the total e-commerce market by 2018, up from 1% at $125 billion presently," said Mr Bittner.

David Jou, the managing director of Lazada Thailand, estimates the retail market in Thailand at $50 billion last year, with 1% from online shopping.

That figure is set to rise to 3% this year and to 6% by 2018, helped by burgeoning broadband use and the boom in smartphones and tablets.

The number of online shoppers is forecast to reach 30 million by 2017, said Mr Jou.

By June, Lazada will introduce a mobile app service for its website to support smartphone and tablet users. Some 15% of Lazada's 4 million visitors each month arrive via mobile phone.

Lazada has about 20,000 items in 12 categories from over 500 suppliers. Best-selling products include smartphones, tablets, diapers and home appliances.

"We expect sales in Thailand to top 1.5 billion baht this year," said Mr Jou.

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