Retail in Asia had the pleasure to meet Rostin Javadi, newly appointed COO at Zalora, during a visit to the Regional e-Fulfillment Hub located in Selangor, Malaysia.
The logistics hub covers a total area of 470,000 square feet – approximately the size of nine FIFA football fields – and split across five levels, the e-Fulfillment Hub plays a crucial role in fulfilling thousands of orders per day and facilitating the movement of fashion goods 24/7 across eight markets: Singapore, Malaysia, Brunei, Hong Kong, Macau, Taiwan, Indonesia and Philippines.
To ensure the highest level of delivery experience for consumers across all markets, ZALORA invested heavily in building its e-commerce infrastructure from warehousing facilities to last mile delivery fleets.
ZALORA is revolutionising the e-shopping experience across Asia Pacific through operational and logistic excellence. The Regional e-Fulfillment Hub is a key driver for ZALORA’s growth as the region’s leading online fashion player.
Gunjan Soni, CEO of ZALORA shares, “ZALORA is gearing up for step-change in growth across its key markets including Malaysia over next 3 years with 40-60% expected annual growth rate. Our fulfillment centre in Malaysia plays a significant role in enabling this leadership.”
ZALORA invested resources and time to develop in-house logistics and operations systems:
One example is Mobile Picking, a customised solution that transmits picking information of customer orders through mobile devices, allowing greater scalability and on-time fulfillment. Since its introduction, picking productivity increased significantly and accuracy is now at 100%, due to the real-time item verification.
To process all orders in real-time, an in-house Order Management System (OMS) was
developed for the ZALORA Operations team to track movements of inventory into and out of its distribution centres, process orders, manage customer returns and refunds and manage ZALORA’s own delivery fleets.
By leveraging innovative and cutting edge technologies, ZALORA’s average lead-time from item ordered to delivered is now as low as two days for customers in the region.
The visit to the logistics hub was very interesting and staff was able to clarify the different steps and show us the product journey from arrival to dispatch.
RiA : What’s your role at ZALORA and why are you based in Malaysia?
Rostin : I supervise the operations, meaning I review the whole process from the warehouse to the service provider, including logistics, customer service, e-production, meaning content creation, and photo shooting of products.
I am based in Malaysia because we have a strong footprint here, and the regional team operation team is based in Kuala Lumpur. I have been living in KL for more than 6 years, so I would say that is also a personal choice.
RiA : This logistics hub covers the whole region. Can you tell us more about why being in Malaysia has resulted to be more strategic for ZALORA?
Rostin : Our markets can be split into mini-regions: Hong Kong and Taiwan, and the rest of the countries as SEA, keeping Indonesia and Philippines separated because of the challenging geographical setting of the countries.
Therefore, the most strategic areas to consider for proximity to all would have been Singapore and Malaysia, however, it is no secret that Malaysia is much more competitive in terms of costs.
Having one standpoint for the whole region enables us to keep the stock altogether and to have control on the inventory.
The goal now is to create a solid infrastructure that could easily connect the physical warehouse with the website and build on efficiency.
RiA : How do you manage Indonesia and Philippines given the thousands of islands in those countries?
Rostin : Logistics is very complex, but also payments. The key to our success in those countries is partnerships.
ZALORA focuses on customer experience, which is given by different factors: usability of the website, payments, delivery, return, everything needs to be efficiently run to satisfy the customers. In countries such as Indonesia and Philippines, the key difficulty is the diversity from one place to another.
As we cannot operate each and every single Km in a different way, we have built solid partnerships to provide us with the most efficient tools to run each step of the customer journey.
RiA : What are the assets for the perfect customer experience?
Rostin : We are focusing on providing users with the best experience, meaning from the website experience, to delivery, and return. We have developed different tools, one of the latest ones is Express.
Express offer is a service we have created to guarantee delivery within the next day, meaning it can also be within the same day depending on time and country. It is a subscription programme that enables the most demanding customers in selected countries to have their deliveries prioritized and satisfied within the next day, and where possible within the same day.
We are still working on it, along with other dedicated services to loyal customers, as a result of a more customer experience-centric approach.
RiA : The warehouse and your logistics system has been built taking into account that ZALORA is mainly a fashion destination. Can you share with us how is it different to deal with fashion and accessories in comparison to other sectors and any relevant data?
Rostin : Fashion is definitely very difficult to manage both online and offline because of seasonality, and online because of fitting problems especially across different countries.
At ZALORA, we have designed a process that enables us to measure the products, prepare them for the photo shooting, and display them on the website in a way that the user can get as much as information as possible while searching for a product. This to minimize returns. However, as we know that a smooth product-return is a great incentive for potential consumers to buy online, we have built strong partnerships to make people’s life easier while shopping on ZALORA.
Additionally, besides finding ways to deal with the different collections, we have also started collaborating with local designers to release limited editions and capsule collections, but also boost local fashion.
As ZALORA aims at becoming a fashion destination, not only for shopping, but also to scout new brands, it is working with young talents and helping them to launch globally.
Fashion is changing very fast, so we have to be able to adapt to that and we need to have solution that can cater for that as well. So, these are all the things that we are working on, and I think still quite a bit more to go for sure.
RiA : As you mentioned, ZALORA aims at being also a fashion platform to give visibility to local young fashion talents. Do you have any successful case yet?
Rostin : We see big potential in local brands, and traditional fashion, that sometimes because of limited resources end up to have visibility limited to their country, or city of origin only. Therefore, at ZALORA besides choosing brands which match pour users’ demand to drive our business, we tend to mix and match them with smaller local brands to provide them with more visibility.
Let’s take a Malaysian brand like Jovian, for instance, before ZALORA, the number of its fans was limited to Malaysia. Today, even just looking at its social media growth we could see the impact of our partnership. Recently, we have also hosted a fashion show for the brand, and this is one among other cases of brand awareness boost.
RiA : On ZALORA, we can also see that you are differentiating your portfolio of products by adding other categories other than fashion and accessories. Can you share some data on your consumer’s cross-category purchasing behaviour?
Rostin : As women are our main clientele, categories such as cosmetics and fragrances have been introduced to offer fashionistas the opportunity to complement their outfits, not only with accessories, but also with more personal goods such as a lipstick, or a perfume.
We have started slowly, but now we are getting the capabilities of expanding our assortments in this direction as well.
RiA : ZALORA is an ecommerce platform, and we have seen it evolving through time. What’s next?
Rostin : Definitely, we are going to offer to our B2B clients more services to make sure that they can successfully localize their business. We have recently implemented some marketing services like localized influencer marketing plans for our clients. With this service, brands can take part to the overall influencer marketing campaign run by ZALORA to raise awareness about themselves.