Lazada has little to worry about in the way of funding. Backed by Chinese ecommerce titan Alibaba, the Southeast Asian marketplace is well-positioned to dominate the regional ecommerce market. Except for one, multi-billion dollar caveat: Amazon.
In a fireside chat during Tech in Asia Singapore yesterday, Max Bittner, CEO of Lazada, addressed the elephant in the room – Amazon’s highly anticipated entry into Southeast Asia. In fact, Bittner believes that Amazon Prime Now, the US tech giant’s two-hour delivery service, is slated to launch in Singapore as soon as this month. That’s preempted LiveUp, Lazada’s own customer loyalty program, which went live in Singapore last month.
“So we’ve heard May 28th – let’s see if that’s true,” he said, referring to Amazon Prime Now’s launch in Singapore. “They’ve been delayed a few times, but maybe they’ll get it right this time.”
Bittner believes that Amazon Prime Now is slated to launch in Singapore this month.
Tech in Asia reached out to Amazon and has not yet heard back.
Bittner explained that LiveUp – which offers benefits across Netflix, Uber, Redmart, and other services – has been has been designed especially for Singaporean users. The other advantage Lazada has going for them in defense of Amazon is “the other 800 pound gorilla in the room” or Alibaba, he said.
“We can fall back on [Alibaba], and not have to raise money every six months like our competitors,” he said. “We can really focus on building a fundamental core difference.”
As for Southeast Asia’s other markets, Bittner said that he wouldn’t speculate when and how Amazon will enter them.
The 800 pound gorilla
Alibaba’s US$1 billion injection into Lazada, which was announced last April, is already starting to make a difference. The Southeast Asian marketplace now offers Chinese products from Taobao, Alibaba’s bazaar-like ecommerce site, where anyone can open their own shop and start selling goods.
Lazada is also integrating its payment solution, HelloPay, with Alibaba’s financial affiliate, Ant Financial. The Chinese fintech firm operates Alipay, the leading mobile wallet in China. Last month, Ant Financial and HelloPay announced their merge, which will rebrand HelloPay’s regional identity in Singapore, the Philippines, Malaysia, and Indonesia as Alipay.
Lazada does not take 30 seconds to put a product online. It will take a few days.
“I think Alibaba has a huge wealth of access in tech, in special merchant tools, in special consumer tools, and data tools for both brands and customers to optimize the journey,” said Bittner. “So it’s our job and the thing we’re most excited about is to get access to a lot of that stuff and integrate it into our platform.”
Alibaba’s relationship with brands around the world will also come in handy, as Lazada doubles down on its B2C strategy, which differentiates it from open marketplaces and competitors like Shopee.
“We are a controlled marketplace […] and we have several loops of quality checks and security checks on who is allowed to list something on our platform,” he emphasized. “You look at the company – does it have a license or registration, is the company paying taxes? We look at their products – are they fake or not.”
“Lazada does not take 30 seconds to put a product online. It will take a few days,” he added.
The startup is aiming for a strikingly different reputation than its investor, which has repeatedly come into conflict with brands over counterfeit goods, particularly on Taobao. Lazada started off as more of an Amazon-like service, with its own warehouses and inventory – though now it’s evolved into an open marketplace with tens of thousands of merchants.
“We have a much higher and bigger focus on logistics than [Alibaba] does,” Bittner explained. “We control our last mile -we have a bigger warehouse footprint and it’s slightly different DNA than what Alibaba is coming from.”
However, when pressed about Lazada’s quality controls, the CEO admitted that currently there are unbranded products on the site, such as those from its cross-border business with China. Not everyone in Southeast Asia wants to buy branded items – some are local merchants that want to source from China and sell locally, he said.
This is part of the coverage of TIA Singapore 2017, our conference that took place on May 17 and 18.
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