One of Asia’s leading e-commerce platforms, Lazada has built a thriving online marketplace present in six markets: Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. With about 160 million active users and more than one million active sellers every month, Lazada is an influential retail player in the region.
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Retail in Asia speaks with Wee Lee Loh, chief executive officer of Lazada Singapore, on the future of e-commerce in Southeast Asia, consumer trends to watch, and localising marketing strategies.
RiA: Tell us about key trends you have observed in Southeast Asia’s e-commerce landscape.
Loh: Lazada is present across six markets: Singapore, Malaysia, Philippines, Indonesia, Thailand and Vietnam. Across these six markets, the team often conducts research studies to ensure that the platform is evolving with the latest consumer trends and consumption habits. Some of the recent trends include:
E-commerce is still a top choice for many consumers in the region.
Overall, the e-commerce industry in Southeast Asia has undergone tremendous growth from 2019 to 2021. While consumers have been able to head back to physical retail, we have observed that many still prefer e-commerce due to the diverse assortment on offer and the convenience of delivery. In fact, eight out of ten consumers continue to shop online for ease and convenience. And looking ahead, the size of Southeast Asia’s eCommerce market is expected to reach more than 400 million users by 2025i.
Southeast Asian shoppers are mobile-first.
We found that 86 percent of Lazada users prefer online shopping on their smartphones. Further, over three quarters of online consumers shop at least once a month. The overall e-commerce user penetration in Southeast Asia is expected to increase from 53 percent in 2022 to 63 percent by 2025.
Consumers are discovering products directly on e-commerce marketplaces.
Interestingly, almost 50 percent of consumers’ eCommerce purchases are unplanned. Fifty-seven percent of shoppers search for products directly from e-commerce marketplaces, effectively treating marketplaces like search engines. On Lazada specifically, 94 percent of shoppers use the search function to discover products.
Fashion, beauty, and grocery categories are the most popular with shoppers.
Across the six markets, the top three product categories in the past 12 months are fashion (53 percent), beauty and personal care (51 percent) and groceries (46 percent).
Consumers still love mega campaigns and ‘shoppertainment’.
Shoppers in Southeast Asia still actively make purchases during mega campaigns such as 11.11 and 12.12, with 67 percent of them making at least one purchase at such campaigns. Shoppers also enjoy shoppertainment, the blend of shopping during a livestream, which is becoming an increasingly valuable tool for engaging consumers online, even post-pandemic.
Lazada’s Ramadan campaign. Source: Lazada
RiA: How would you compare Lazada’s strategies in different markets?
Loh: We strive to address the unique needs across different markets with localised strategies.
In Indonesia, the Philippines and Malaysia, our customers value fast delivery and free shipping. To address these growing expectations, we have developed our own robust logistics network across these countries. We also offer a variety of secure payments and financial services, as we understand its importance in contributing to a positive shopping experience for shoppers from Singapore, Malaysia, and Indonesia.
In Muslim-majority countries like Indonesia, there is a concerted effort to onboard the right assortment, for example Muslimah fashion and halal cosmetics.
We also keep a close eye on local economic conditions in each of our markets. For example, in Singapore, increasing inflation rates and the recent 1 percent increase in GST have led to many consumers feeling financially pressured. To address these challenges in Singapore specifically, Lazada Singapore has introduced initiatives to help shoppers stretch their dollar. Some examples include flat-free delivery, which helps households manage their monthly expenses; Everyday Cashback, a rebate program; and Price Match, which ensures that items with the Price Match Logo will be priced lower or equal to applicable online retailers.
RiA: Tell us about some of your goals at Lazada Singapore for 2023 and how you plan to achieve them.
Loh: We will continue staying relevant to our shoppers by being hyper-local, with the right assortment and campaigns suited for the many communities in Singapore. We launched a Halal Store in our app in 2022 to cater to the Malay community, and have dedicated channels for various international cuisines on RedMart. We held a Total Defence Day campaign earlier in February, and will hold one for Ramadan too, come late-March.
We remain focused on improving our competencies that will positively affect the customer experience. We want to make deliveries faster – watch this space!
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RiA: What opportunities are you seeing in the e-commerce sector for the next few years?
Loh : The e-commerce sector remains an exciting one, and is still considered in its infancy stages compared to more mature markets like the US and China. In Singapore, eCommerce penetration hovers around 15 percent so there is headroom to grow.
Here are some spaces to watch as eCommerce matures in Southeast Asia:
Affiliates and social selling – As more people jump on board to have a slice of the pie, more customers will be promoting eCommerce products in various content formats.
Logistics – Customer expectations will evolve and they will develop different delivery requirements from pick-up and drop-off, to faster shipping, to same-day delivery.
Sustainability – Sustainability is becoming a topic of interest among younger shoppers in Southeast Asia. Brands and marketplaces alike should find ways to collaborate and make concrete strides to remain relevant to such an audience.