Lazada fulfilment goes to Alibaba site

Lazada fulfilment goes to Alibaba site

Lazada's semi-automatic fulfilment warehouse in Samut Prakan's Bang Phli district.
Lazada's semi-automatic fulfilment warehouse in Samut Prakan's Bang Phli district.

E-commerce operator Lazada plans to move its fulfilment centre in Samut Prakan to a new facility run by parent company Alibaba in the Eastern Economic Corridor (EEC) that has increased package-handling capacity and automation to ensure faster delivery speed.

"Lazada continues to invest in Thailand for the long term, which includes logistics infrastructure to increase delivery speed with our goal of achieving same-day delivery," Jack Zhang, chief executive of Lazada Thailand, told the Bangkok Post.

Sanida Manakitpinyo, senior vice-president of Lazada Thailand, said Lazada's existing fulfilment centre in Bang Phli district occupies an area of 24,000 square metres, equivalent to five football fields.

This centre, located at Tpark Bangplee 3 Logistics Centre, handles up to 70 brands on LazMall, where sellers operate their online shops, as well as a total of 50,000 stock-keeping units (SKUs), ranging from grocery and cameras to pet supplies, smartphones and jewellery.

The centre deals with inbound goods placed by sellers, rental storage, packing, processing returns and claims for damages and losses. The storage facility will be divided into zones, forming segments such as high-value products, small items and cold spaces.

The new facility at the EEC, owned by Alibaba, is three times bigger than its existing centre, said Ms Sanida, who is also the head of infrastructure and fulfilment at Lazada Express.

An average of two hours is necessary for the existing centre to proceed with packing by staff, placing labels and putting them on conveyors in preparation for delivery. The process could be completed in 14 minutes, she said.

"During the outbreak, we gained new 90,000 sellers in the system," said Ms Sanida.

She said the existing centre has upgraded its performance over the past five years.

The centre adopted Alibaba's technology in 2017, such as Dabao Warehouse Management System, which controls inventory, provides visibility for customer orders and enhances fulfilment capabilities at scale.

This system is integrated with the Workforce Management System, which encompasses a team of skilled employees who use technology to enhance parcel management services, said Ms Sanida.

"In the early days, before Alibaba's technology was used, we spent an average of 4-6 hours on lead time," she said.

Lazada's fulfilment centre has 180 employees working in two shifts from 8am to 11pm. For big campaigns, such as 11.11 shopping festival on Nov 11, temporary staff were recruited, totalling more than 400 employees. They also worked until 3am.

"Money can buy state-of-the-art technology, but humans are the key to success," said Ms Sanida.

The centre's logistics segment processed 35% more orders during the 11.11 festival. Users who ordered before 11pm received parcels by 8am the following morning.

The fulfilment centre is a long-term investment and Lazada needs more brands and online sellers to outsource parcel handling with the centre, she said.

The company charges sellers order processing fees and inventory space fees.

"Brands and sellers can spend time focusing on products and marketing rather than fulfilment," Ms Sanida said.

In Asean, Lazada's fulfilment centre in Thailand commands the fastest lead time from inbound to outbound.

The centre is a semi-automatic facility where humans have to handle inbound goods, put them in storage and proceed with packaging. Outbound handling is automated.

She said the robotic system will be used more in logistics, from picking, handling and delivering products.

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