Retail in Asia


Lazada Singapore CEO Wee Lee Loh on the future of e-commerce in Southeast Asia

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.

SEE ALSO: #TikTokMadeMeBuyIt: Tapping on the rise of social commerce

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!  

SEE ALSO: The Philippine e-commerce market lifts 31 percent in 2022

Lazada delivery rider in Vietnam. Source: Lazada
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.