Is business getting harder and harder? Lazada's one-stop overseas expansion in Southeast Asia has set off a gold rush

"Perhaps 10 years ago, opening a Taobao or Tmall store was the best entrepreneurial project for young people. Today, for young entrepreneurs, exporting Chinese products is also a good career." At the roundtable forum "New Cross-border Forces - Entrepreneurship in Lazada" held at the Lazada Cross-border Merchant Conference on September 29, Ivan, COO of luggage brand MAH, shared his experience of starting a business in Lazada without reservation, and pointed out that "products and brands will find opportunities for transformation and upgrading in the new market (Southeast Asia)."

Southeast Asia is a blue ocean, it’s the right time to grab land

In fact, Ivan is just one of the countless Lazada merchants going overseas. As more and more people realize the huge business opportunities in the Southeast Asian market, a wave of gold rushing in Southeast Asia has also emerged. Some of them sell thongs to foreign men and buy a Mercedes-Benz after two years of entrepreneurship; some worry about Southeast Asian babies and make a great success in the maternal and child care field... In the eyes of many of them, today's Southeast Asian e-commerce is very similar to the early Chinese Internet, and is an absolute blue ocean market.

According to an e-commerce report released by Google, Temasek and Bain, the GMV growth rate of Southeast Asian e-commerce reached 63% from 2019 to 2020, and will remain at around 23% in the next five years. Currently, e-commerce channels only account for 5% of the Southeast Asian retail market. The e-commerce market is still in its infancy and is still a blue ocean market.

It is understood that at this Lazada roundtable meeting, the guests also shared their views on the Southeast Asian market. Bruce, a representative merchant of the department store category, said, "The current Internet penetration rate in the Southeast Asian market is similar to that in China, both at 68%, but the online shopping penetration rate is much lower than that in China. I believe that Lazada will have a lot of room for growth in the next few years." Chen Jiadong, a representative merchant of the consumer electronics category, also pointed out, "Instead of fighting with big sellers in mature European and American countries, it is better to choose emerging markets to stake out territory. Southeast Asia is still accelerating its development, is close to China, has fast logistics efficiency, and has huge development potential."

Lin Chao , a cross-border e-commerce observer and head of the self-media "Lin Chao Chats Cross-border", added, "The entrepreneurial opportunities in Southeast Asia are definitely not limited to B2C e-commerce. There are also many service opportunities in the entire market, such as supply chain, logistics, payment, training and agency operations. Each company has different resources and advantages, so just choose to do something that is valuable to the market."

Intimate Lazada, one-stop service to help take off

Faced with the vibrant Southeast Asian market, Lazada's generous incentive policies and full-link services have opened up a fast lane for young entrepreneurs to go overseas and seek gold.

"What impressed me most during the cooperation with Lazada was that the customer service staff responded very promptly. They would even communicate some important information to us until 11 or 12 o'clock at night," said Ivan. "They will proactively remind you of relevant matters related to the promotion of the project, which makes us have a very clear path to Southeast Asia and gives us confidence." Moreover, "We actively sign up for Lazada activities, invest in promotion costs, and invest in social media and internet celebrity resources, which will have very good data returns," Ivan added.

As Ivan said, Lazada has been making every effort to help small and medium-sized businesses go global. This year, Lazada also built the Lazada cross-border e-commerce ecological service circle in Yiwu, Zhejiang, to provide face-to-face service support and operational guidance for merchants. Among them, the 2021 Cross-border Merchant Growth Incentive Plan launched at the beginning of the year has benefited countless merchants.

According to the plan, new merchants who open stores on Lazada can enjoy a 90-day commission-free service, which reduces commission costs and helps them make more money overseas. In terms of payment collection, Lazada's official designated payment channels are exempt from withdrawal fees for 6 months; in terms of logistics, it also provides diversified logistics solutions. Yiwu has a distribution warehouse for B2C and a collection warehouse for B2B, providing free door-to-door collection services. If the average daily order volume is 50 or more, you can enjoy the free door-to-door collection activity.

So far, Lazada's support for merchants has even reached all levels such as product design and business strategy. Ivan said that under Lazada's suggestion, MAH adopted the hot-selling prints in China and improved them in combination with local cultural characteristics. The result was a great success, successfully achieving the goal of selling more products, and quickly climbing to the top 20 of the luggage category.

Talking about his experience in operating on the Lazada platform, Chen Jiadong said, "Lazada has passed the early stage of distribution, and the platform is becoming more and more complete. Now and in the future, we need to refine operations, do a good job in basic work such as product selection and pricing, and develop brands and overseas warehouses at the same time."

Cross-border observer Lin Chao also affirmed this, and added, "Before 2019 was the first stage of Southeast Asian e-commerce, and the platform's primary task was to help Chinese sellers understand and enter the Southeast Asian market; after 2019, Southeast Asian e-commerce began to enter the second stage. In order to improve user experience, the platform will gradually increase the requirements for sellers, such as starting to guide sellers to open brand mall stores and overseas warehouses. Only by understanding the platform's policies and cooperating with the platform's development rhythm can operations achieve twice the result with half the effort."

In fact, as mentioned by the above guests, the perfect warehousing supply chain system is indeed one of Lazada's biggest advantages. In particular, thanks to the latest brand upgrade of Lazada Logistics' multi-channel logistics (MCL) service, Lazada provides sellers with an integrated inventory fulfillment solution, helping sellers to achieve seamless order fulfillment in all e-commerce channels.

At the 2021 Cross-border Merchant Conference held on September 29, Lazada also announced another upgrade of the platform's cross-border three-dimensional logistics network, and provided RMB 50 million in incentives to support merchants' overseas warehouse business and help cross-border merchants deepen their business in Southeast Asia.

It is understood that after the upgrade, Lazada's one-stop diversified cross-border logistics service, which was created with the support of Cainiao, will be further improved. The overall efficiency of Lazada merchants' direct mail to Southeast Asia can be increased by up to 50%. At the same time, the cross-border express delivery service (Lazada Global Express) has achieved the fastest delivery time of domestic shipments to consumers in just 6 days.

At the Lazada Cross-Border Merchant Conference, the company also announced an upgrade to its smart replenishment system. Backed by Alibaba's supply chain platform and Cainiao's years of experience in warehouse and distribution networks, as well as the powerful technical force behind smart forecasting, replenishment and other solutions, Lazada has launched a CPFR smart replenishment system for merchants to prepare goods for warehousing. The system will monitor intelligently from multiple dimensions, and through big data algorithms, maintain a reasonable turnover period, reduce the out-of-stock rate of popular products, and reduce unsalable inventory.

On this basis, more and more entrepreneurs are rushing to join Lazada. In the just-concluded 99 promotion, Lazada's data performance in Southeast Asian countries was very impressive. In Vietnam alone, the number of buyers doubled in just 2 hours after the 99 promotion started, and the order volume more than tripled year-on-year. Behind the achievements, it also once again demonstrated Lazada's strong strength in Southeast Asian e-commerce infrastructure such as technology, logistics, and payment.

With the improvement of Lazada's infrastructure, a vibrant Southeast Asian blue ocean market has emerged before entrepreneurs. In the future, Lazada will continue to uphold Alibaba's mission of serving small and medium-sized enterprises, continuously increase investment in consumer awareness, logistics infrastructure construction, etc., and help more small and medium-sized enterprises go abroad and into the world, and find new growth points.

Platform Information

Lazada

Cross-border e-commerce