Lazada sets out long-term business plan
E-commerce operator is hoping to break even or make a profit within three years
E-commerce operator Lazada has pledged to raise seller and buyer experiences on its platform and boost its ecosystem to ensure long-term business sustainability, while aiming to break even or make a profit over the next three years.
James Dong, chief executive of Lazada Thailand and Vietnam, said Lazada had enjoyed strong growth over the past year and a half, driven by the pandemic.
"We have grown at a high double-digit rate with some quarters at triple-digit growth," said Mr Dong, attributing the growth to the shift in consumer demand towards online shopping and the impact of the pandemic-induced lockdown.
During the pandemic, Lazada has faced higher logistics costs and needed to offer vouchers and free shipping to draw new customers to the platform.
The key mission is to help small and medium-sized enterprises run their businesses during this difficult time and let people have better access to consumer goods online, he said.
"During the pandemic, sellers and brands have looked up to us to help them have this alternative channel for generating revenue, so we make sure that we can deliver that even at higher cost," Mr Dong said.
Despite having its own fleet of vehicles, Lazada is also working with third parties as this could help build an ecosystem when working with others.
On the logistics side, Lazada leverages the logistics technology of Chinese e-commerce powerhouse Alibaba with Lazada's most advanced warehouse in Asean, Mr Dong said. With digital technology in hand, Lazada can make shipments across borders in a shorter time.
Lazada has set a target of ensuring cross-border delivery within three days, Mr Dong said. So far, shipments from China to Thailand can be done within three days by Lazada.
An aerial view of Lazada's newest and largest warehouse in the Eastern Economic Corridor.
Mr Dong said Lazada is striving to maintain or increase its market share in the e-commerce segment.
"We try to provide a little bit better experience by providing better logistics with a more trusted assortment of products and we will continuously launch more technologies involving artificial intelligence [AI] and virtual reality [VR] to improve the customer experience," Mr Dong said.
"For our company, we always focus on a long-term and sustainable achievement. We will try a lot of different initiatives," he said. "We will continue to invest in things that we can scale."
Lazada still maintains a market-leading position in the country, Mr Dong said.
"Providing the best experience to sellers and buyers is actually the most relevant strategy for us," he said.
The company is also striving to reach break-even or even profitability, Mr Dong said. "Hopefully this could be soon enough, maybe during 10-12 years of Lazada's operation." Lazada is now in its ninth year of providing its services.
However, he said profitability is not the biggest pressure for Lazada as it is not a public company and still gets funding from Alibaba.
Lazada and Shopee are dominating the online shopping market in Thailand.
"As long as there are two big players, there will be tough competition," said Mr Dong. "But the good thing is we push each other to get better and provide a better service to both sellers and consumers."
According to him, online retail accounts for more than 30% of the total Chinese retail market, while this share stands at less than 10% in Thailand. "There is still huge room to grow," Mr Dong said.
DIVERSITY AT WORK
Mr Dong was made chief executive of Lazada Thailand and Vietnam in June 2021.
Mr Dong said that during the pandemic, Lazada slightly reduced the number of expat workers while increasing diversity, with more women than men at the company right now.
At Lazada's Bangkok head office, more than 60% of its employees are female and the team is "pretty international", he said.
For the entire business, Lazada has more than 60 nationalities. "This diversity delivers a lot of good thoughts in our business," he said.
A myriad of tech and internet firms are now studying how to create a virtual environment where people can interact with each other online or in the metaverse, and Lazada is one of them.
Mr Dong said the firm is crucially paying attention to AI and VR technology, representing one of the three key components of the metaverse. The other two are blockchain and people's experiences with their tailored preferences.
"We are probably one of the first movers in this area," he said.