Lazada to intensify promotion, presence in major Indonesian cities

Entering its fourth year of operations, regional e-commerce giant Lazada Group is seeking to expand its customer base in more major Indonesian cities in a bid to win the online store competition in Southeast Asia’s biggest economy.

Lazada Indonesia CEO Magnus Ekbom said Monday that the company would focus on intensifying its presence in major cities outside the Indonesian capital of Jakarta, including Yogyakarta, Medan in North Sumatra, Bandung in West Java and Surabaya in East Java, through road shows and other promotional efforts.

“The road shows in these cities will connect us with our customers and understand unique regional factors,” Ekbom said.

“We have also studied what products seem to be the most popular [in the cities] and the results have often been interesting.”

Lazada Group is a privately owned e-commerce company founded in 2011 by Rocket Internet with the goal of building Southeast Asia’s version of Amazon.com.

Lazada, which began operations in the Philippines in 2012, led Internet retailing in the country last year with a 20 percent market share as it met rising demand for gadgets and electronic appliances, from smartphones, tablets to home theater systems, at prices that were a “huge” discount, according to a Euromonitor International January 2016 report.

Aside from the Philippines, it operates sites in Indonesia, Malaysia, Singapore, Thailand and Vietnam. Singapore’s Temasek Holdings Pte is one of its large shareholders.

On March 12, on its anniversary date, the Singapore-based Lazada Group announced that its gross merchandise value (GMV) last year stood at US$1.3 billion across its six Southeast Asian countries of
operation.

Lazada runs its business as both an online retailer and marketplace for other online merchants.

There are currently 11,000 merchants utilizing Lazada Indonesia.

Since the platform’s Indonesian beginnings, it has grown from employing 200 workers in 2012 to more than 750 in 2016. Currently, 60 percent of transactions on Lazada are made through mobile phones, indicating the mobile-savvy nature of Indonesian customers.

“Lazada sees up to a quarter of a billion activities daily, which involve customers browsing for items, customers buying items, or even just adding things to their wish list,” Lazada’s SVP head of data science John Berns said.

“It’s a remarkable scene, because Indonesia currently has about 70 million internet users, and will probably reach 100 million by the end of the year,” he added.

To celebrate its fourth anniversary, Lazada Indonesia will have a sale from March 15 to March 18, which is expected to attract around 15 million visitors.

Ekbom said that the e-commerce platform would offer up to 540,000 special deals for all customers during the sale, at discount rates of up to 90 percent, around three times more than what Lazada offered during its birthday sale in 2015.

Brands that will participate in the sale include those in the IT, sports, automotive ad beauty product segments, including L’Oréal, Infinix, Panasonic, Lenovo, Samsung, Nike, Sharp and many more.

Indonesia’s e-commerce market is forecast to grow to $25 billion this year from only $8 billion in 2013, according to e-commerce provider Vela Asia.

A number of e-commerce players, both online retailers and marketplaces, plan to develop their businesses. Lippo Group has launched shopping website mataharimall.com and plans to invest $500 million. Existing marketplaces such as Bukalapak and Tokopedia have also secured some new funding.

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