The conventional way of buying and selling is being swiftly replaced by the aggressive ‘virtual shops’
By IZZAT RATNA / Pic By MUHD AMIN NAHARUL
The e-commerce space is getting quite crowded, very quickly. As it is, e-commerce players are already smothering other competitors in the brick-and-mortar world.
The conventional way of buying and selling is being swiftly replaced by the aggressive “virtual shops”, with cashless transactions via new platforms including the e-wallets that offer convenience and speed to consumers.
BMI Research recently projected that e-commerce would hit US$64.8 billion (RM254.28 billion) in 2021 from the current value of US$37.7 billion.
Credit Suisse Group AG has also estimated in a Bloomberg report that online shopping growth could out- pace traditional retailers by six to 10 times over the next few years.
Despite the tougher competition, Lazada Malaysia — one of the pioneers in Malaysia’s e-commerce sector — has not shown any signs of slowing down. In fact, it has managed to sustain its position as the digital leader amid the influx of many new players.
The e-commerce giant is bullish on its ability to plough through the competition and hit new highs to surpass its previous records.
Lazada Malaysia is poised to take a bigger chunk of the e-commerce segment in Malaysia, which has been projected to value around RM211 billion, or 20% of Malaysia’s gross domestic product, by 2020.
Revenue from the Malaysian e-commerce space is also estimated to increase eightfold to RM32 billion over the next eight years, spurred by high online and mobile penetration in the country.
According to a joint study by Google Malaysia and Singapore-based Temasek Holdings Pte Ltd, Malaysians spent RM4 billion on retail purchases online in 2015, with 81% of the country’s over 30 million population using smartphones.
Additionally, revenue from online transactions is expected to reach RM32 billion in 2025, underpinned by strong mobile usage among Malaysians.
Lazada Malaysia, established in 2012, now has approximately eight million organic mobile-app downloads with 50 million average monthly visitors and 30,000 sellers for 100 mil- lion products available to date.
It has approximately 2,000 employees in Malaysia, consisting of 400 overheads in its main headquarters, while the remaining staff members are spread out in its logistic and warehouse hub, as well as courier services division.
The Malaysian Reserve (TMR) recently sat down with Christophe Lejeune (main picture), who was appointed as Lazada Malaysia’s new CEO early this year.
The 36-year-old Lejeune, who took over the position from Hans-Peter Ressel, has been with the company since 2015 as the chief commercial officer.
Lejeune shared with TMR the e-commerce giant’s prospects, goals and aspirations, as well as the overall industry outlook.
TMR: What are Lazada Malaysia’s growth plans for 2018?
Lejeune: We are targeting to achieve a healthy seller base growth rate this year — projecting about 3,000-4,000 new sellers month-on-month. When we launched the “Everyone Can Sell” programme in 2017, the brand managed to triple its seller base to 30,000 from the initial 10,000 mark.
The sellers’ growth rate is expected to be bigger over the next two years against the previous historical records.
We are also planning to grow the supermarket offerings to have everyday products for the customers because there is a lack of fresh food products available at the moment to complement the daily household products such as detergents, soaps and the like.
The grocery segment is one of the focus areas where we want to grow massively this year to cater to urban dwellers and young professionals who are moving away from traditional shopping habits to online.
TMR: What are the key segments that Lazada would focus on this year?
Lejeune: Lazada ada semua (Lazada has everything). So, we want to be strong in everything. We are growing very strongly in fashion with more desire from our female demographic base to have instant access to the new fashion styles.
We also have lots of other brands ranging from diapers, milk formulas and other family-friendly products that are among our bestsellers to date.
Another segment that we grew a lot last year was automotive. We launched a Petronas fuel card for customers to enjoy discounts when refuelling at Petronas stations.
We are also growing a lot in tyres, make-up and other lifestyle products. For all our customers, when it comes to shopping, anything they want to buy is at Lazada, including cars.
TMR: Your target audience?
Lejeune: Lazada is currently commanding 80% of our target audience outside of the Klang Valley — with more female representation.
We are also very strong in the East Coast of Peninsular Malaysia, as well as Sabah and Sarawak.
We, however, have little representation from the youths. But compared to three years ago, we are seeing ourselves being spread more evenly across the board.
TMR: How is rising competition in the e-commerce space affecting Lazada Malaysia’s future growth plans?
Lejeune: Six years ago, when Lazada Malaysia was first established, there was no competition for us. We actually faced challenges in convincing customers, sellers and the public in general to have faith in buying and selling on our platform. We had to convince all of the relevant stakeholders to have conviction in us and after one or two years, we started seeing the brand growing, in line with the sector’s overall robust growth rate.
This has also provided opportunities for more players to join the digital space as this is where the next growth potential is for businesses.
For us, competition is good as it helps us to be better. We are very confident to get the best out of the brands with more competitions on the rise.
Amid rising competition, we have launched many new services such as the Lazada Express, a direct live chat tool between sellers and customers, a seller rating system, multiple payment options, as well as the recently launched milk formula guarantee programme to ensure milk-based products shipped from our warehouse has more than six months of expiry date, coupled with good packaging and would arrive in good condition upon delivery.
Every time we see a new competitor, the growth of Lazada accelerates rapidly. So, we are not worried about the rising competition because we are the best.
When Lazada was the only player around, people were not that convinced. Now with the recently launched Amazon (Prime) in Singapore, it further reaffirms South-East Asia as one of the most important market globally for e-commerce.
TMR: What are your views on issues that are plaguing e-commerce such as fraud, as well as user and data protection policy?
Lejeune: At Lazada, we spend a lot of time listening to our customers’ feedback through the brand survey conducted at the end of each quarter. Based on our findings, there are three main concerns from customers such as online payment, lead time and trust.
Customers are worried on safety, while conducting online transactions. They also find it difficult to trust the information on websites, especially when it comes to receiving their order in a good and safe condition as per advertised online.
As a leader, it is our job to answer customer complaints and to address these issues.
For payments, we refer to multiple payment options. The most current one is the recently launched cash-on-delivery payment system — even for cross-border items.
In order to gage more trust into the brand, we have implemented a new seller rating system for customers to provide feedbacks on every seller available on Lazada, as well as to address their concerns when conducting online transactions.
We are also launching by the end of March, a direct chat system between sellers and customers.
The new live interface application would be used to convey any customer concerns about the product to the sellers for a safe and informed purchasing decision.
In terms of lead time, customers in 2018 are more demanding. They want to receive products earlier than the initial five days traditional practice.
To address this new demand, we are utilising our own delivery company — Lazada Express, which refers to the fastest lead time for customers to receive their parcel within the stipulated time frame.
We have an express service, where customers can order products from our warehouse for a delivery on the same day in the Klang Valley and the next day in 10 other cities nationwide.
TMR: What kind of management style and culture would you implement as the new CEO?
Lejeune: Our culture that we want to promote today is to have significant impact. We want to change how e-commerce works, making it easier for customers.
We are just at the beginning. The growth that we would achieve over the next two years is expected to be much bigger than the growth recorded in previous historical records.
As the new CEO, my priority is to groom our fantastic pool of young talents.
We have a great people team that is using advanced solutions through social media and communication tactics to source for new talents.
One in particular was the management associate programme launched two years ago, where we are reaching out to top universities and schools in Malaysia.
Under this flagship, we are offering a 24-month programme for candidates to have an experience working in different departments within the company such as sales, marketing and other job functions.
For this year, we are aiming to have 25 people to join the company — mainly Malaysians.
I also want to make Lazada the best company for women to work for. We have a lot of great women working here in different departments such as public relations and commercials.
I want these women to have great careers, and combine that with a very fulfilling personal life. As such, we have implemented new things such as flexible working arrangements.
At present, 55% of Lazada Malaysia’s management team are women. However, we do not have enough women in senior management roles and this is something that I want to change from this year onwards. My point is to call all of the great women in Malaysia from business leaders and skilled professional practitioners to be part of Lazada’s fantastic workplace environment.