The Lazada Group is an online business that was established in 2012 by a company known as Rocket Internet and is based in Singapore. The aim of establishing Lazada Group was to exploit the online consumer market niche in Southeast Asia analogous to the one served by Amazon.com in other parts of the world. Alibaba and Amazon’s weak presence in the region was the motivation behind its formation. Rocket Internet is a business incubator based in Germany that tries to institute tech companies that have a similar business model to successful American ones in the underserved emerging markets in the world.
Lazada Group’s websites broke ground in Malaysia, Philippines, Indonesia, Vietnam and Thailand in 2012. It raised its capital via aggressive funding drives and by 2014, had lured in notable investors such as JP Morgan, Swedish retail giant Kinnevik, and German equity firm Summit Partners, Tesco, Temasek Holdings, Access Industries Tengelmann and Rocket Internet. They managed to raise an unprecedented $647 Million (US). In the formative stages, it sold goods purely from its very own warehouses. To diversify its portfolio, by 2013’s close, it had logistics in place to allow third-party retailers to sell their goods through Lazada like it’s done on Amazon. During the same period, Lazada launched its own mobile apps on iTunes and Google Play Store for iOS and Android devices respectively. Ultimately, in May 2014, it put up a site for Singapore.
In November 2014, Lazada stated that the number or third party sellers had grown form approximately 500 during inception to approximately 10,000. Consequently, the third party sellers’ marketplace now accounted for more than 65% of its revenue. The young entity encountered a few challenges during its young fledgling existence. It was in direct competition with retail giants Amazon and Alibaba which was always going to be a daunting task. The situation was worsened by its slow delivery of goods that had its customers complaining. This prompted a massive investment in delivery services and warehouses and the formulation of the 2 day guaranteed delivery policy. By 2015, Lazada also encountered inhibition to its growth process because people preferred to buy from physical stores rather than order products online. Only 1% of the population did their buying online. People also didn’t have credit cards hence it had to create cash payment mechanisms to keep hold of its market share.
In March 2016, Alibaba Group set out to acquire Lazada Group by investing in new shares and buying out the existing owners to acquire a controlling interest. Alibaba invested $500 Million to buy existing shares and $500 Million to buy new shares and effectively became the largest shareholder with a controlling interest. The motivation behind the takeover was that Alibaba didn’t want to invest in new infrastructure to exploit the emerging Southeast market due to the growing size of the middle class. Alibaba also preferred to utilize the already established infrastructure and logistics of Lazada Group.
Branches
Lazada Group has interests in 6 Southeast nations namely: Malaysia, Singapore, Philippines, Indonesia, Vietnam and Thailand. It established websites in the five countries, excluding Singapore, during the inaugural soft launch in 2012. The Singaporean branch came to be put up much later in 2014 after the success of the inaugural branches.
Lazada Malaysia
Lazada Indonesia
Lazada Vietnam
Lazada Philippines
Lazada Thailand
Lazada Singapore
What do they sell?
Lazada was set up as the Southeast Asian equivalent of Amazon or Alibaba. Both are impressive juggernauts that have dominated the online retail industry for years. Lazada is not as adept to the market as the two have been but it’s making significant progress towards that. Lazada’s range of products is impressive in its variety.
On Lazada, you find phones and tablets from the electronics section and beauty creams and fragrances on the same website. They deal in home and office appliances, home décor, fashion and beauty products just to name a few. This is aided in part by the fact that there are third party sellers who are vetted strictly before they can sell on the platform to ensure that they are legitimate.
The super brands that are so popular in the world including but not limited to Apple, Microsoft, Samsung, Calvin Klein, Johnsons and Johnsons, Unilever and many more are adequately represented with access to their quality products availed. The smaller, less known brands are not left out as well making Lazada a one-stop shop.
It is also relatively cheaper to buy some products from Lazada than the physical stores. For instance, you may find a set of Apple headphones going for a lower price on Lazada. If you add the final price + delivery, it is cheaper than going to the physical store especially if it is miles away. Buying from a physical store that is far away is inconvenient in case you have a tight schedule as well. The convenience offered by the online shopping experience of a store like Lazada is normally their biggest selling point.
My shopping experience with Lazada (Thailand)
Thailand is a beautiful place to visit due to the rich culture and impressive scenery. I visited Thailand in 2015 during my summer vacation to unwind and regroup. It is an incredible place. I had to take some nice photos of the place to keep the memories alive. However, my camera lens broke and I had no idea where the gadgets store was so I could replace it. To be honest, it is not easy for a foreigner to navigate the streets of most towns in Thailand. I felt lost.
Back home I was used to buying things online from Amazon. Instinctively, I just went to Amazon to look for the camera lens. I must have mentioned “online” and “Thailand” on the Google search bar because on the first page, Lazada popped up as the second from last search result. I opened a new tab for it to just have a look. I had nothing to lose. I quickly realized that it was the Amazon of Thailand as well as a couple of countries nearby.
I was now hooked and landed on the homepage. I was after a camera lens that I wished to have delivered as soon as possible so that I could carry on with my vacation. However, on the homepage was this sweater that had all these beautiful patterns and colors. I had to have that as well! I had trouble with the website because it was in Thai and my tour guide wasn’t nearby. Luckily, Google translate came in handy. I ordered the sweater and the lens and provided the address of the hotel I was staying at. I was in a foreign country and thought it would be more convenient to pay in cash. They processed my order and promised delivery within 24 hours. 24 hours elapsed but I hadn’t received my order. I made calls to track the consignment and was told that it had been dispatched. It arrived 4 hours late. There had been a massive traffic snarl up that had held up my delivery but everything was in good condition and I paid for it. It was a welcome experience on foreign land. I still get many compliments for this sweater.
Customer reviews
Many people have bought many items on Lazada. Lazada does not ship to other countries and each branch deals with its own territory. This has helped improve the service delivery and gives it an edge over the bigger competitors that lack that sense of control. Here are some thoughts by customers of Lazada:
Singapore
Angeline (March 10, 2017)
She bought a Daniel Wellington watch that was on sale and a pair of Rayban Aviator sunglasses. She stated that it was the “best. Buy. Ever.” She was impressed with the delivery services which were a bit slow, probably because she was anxious to get new stuff, but the items were in perfect condition.
Juniper (December 1, 2016)
Juniper is one of the biggest fans of Lazada. She likes the fact that Lazada has unbeatable sales each week. When she discovered that there were beauty products from the drug store sold there, she realized it would be easier to order them from there. She bought the products at 30% off and has gone on to use the website 5 more times. She highly recommends it.
Joanne (September 26, 2015)
She is more than pleased for the amazing discounts Lazada offers. She was entitled to a 15% discount when she bought from them and was happy to save some money. The delivery was also done quite fast.
Mushylim (November 23, 2016)
Mushylim has been happy with the services offered, the shipping and delivery. However, the exports units are something he won’t be looking at in the near future. He was unhappy with the Export units and discourages other people from ordering them.
Philippines
Christian J. (June 9, 2017)
Christian is happy with the “brilliant service” that Lazada rendered to him. He ordered and paid for his goods at 6.40pm and received them the following day at 9.00am. The delivery guy was polite and friendly. He is a happy client.
James Y. (June 20, 2017)
James is from Cebu. He is disappointed with the customer service. He ordered 7 items on June 13th but only received 5 on time. He did not get them on time despite paying for the goods in full. He did not acquire the assistance he expected from the customer care agents.
Nicolas K. (July 1, 2017)
Nicolas is not impressed with Lazada citing “Rebate Issues”. He ordered a $500 item with a Live Up account and was to be given a 10% rebate. According to Lazada policy, the rebate usually becomes active automatically when the status of the ordered item becomes “delivered.” Nicolas’ order took longer by 2 days to change status to: delivered. The rebate came lower than anticipated and he contacted customer care to enquire. He was promised vouchers to compensate for the low rebate.
Jun e. (June 21, 2017)
Jun ordered a power supply device as well as a Hard Drive from Lazada.ph. They both had technical problems and he had to return them to Lazada so that he would be refunded. The refund has taken longer than he anticipated leaving him disappointed. However, the Lazada customer service has since contacted him and requested to have his order number. They also directed him to a contact page where he would obtain further help on the matter.
Abdul R. (June 10, 2017)
Abdul from the Philippines is satisfied with the services rendered by Lazada. He ordered some items but some were not delivered. He cancelled the items that weren’t delivered. He ordered again from Lazada confident that they will deliver. That was shortly before he wrote his review. He is generally happy with the services offered by Lazada.
Malaysia
A t. (February 22, 2017)
A t. is a long-time customer of Lazada. He notes that 3 years ago, Lazada had very poor service and fraudulent descriptions on the items displayed. However, when he came back after one year, the improvements on the website were remarkable. The customer service was prompt in replying to his concerns and the pricing was done right. He became a loyal customer because the items were delivered in time or sometimes earlier.
William T. (January 13, 2017)
William is amazed by the low prices some items have on Lazada. He has bought some items and has been impressed by the decent prices, quick shipping and delivery and the polite and helpful customer service agents. He is a happy and loyal customer.
Jeffrey L. (December 13, 2016)
Jeffrey has had a good experience on Lazada save for one incident. He ordered an item but it had to be cancelled. He got his refund from Lazada after a delay of two weeks but received an apology letter from Lazada as well as a voucher. He reordered the item and received it within 3 days and it has been smooth-sailing ever since. He acknowledges that sometimes mistakes happen.
Thailand
Anonymous (November 19, 2016)
A customer who remains nameless used Lazada in Thailand and ordered 18 items in 2 batches using his/her hotel as the address and opted for the cash on delivery option. All the goods that were ordered were delivered in time. The delivery came after the customer had received a text and email prior to its arrival. The customer was impressed with the timely delivery and the customer service and delivery communication.
Anonymous (May 11, 2017)
This customer was a loyal client of Lazada Thailand and was impressed with the transactions so much he ordered 3 times without a hiccup. It was his fourth order that wasn’t as straightforward because the goods were not delivered and he did not receive sufficient communication detailing why this was happening. He was impressed by the ease of purchase but berated the customer service.
soinm12345 (November 15, 2016)
soinm12345 was not happy with the service offered by Lazada Thailand. She made an order but the item was not delivered. She attempted to cancel the order within two hours of ordering but was refused the cancellation unless she returned the order. It would be after that that she would make her refund claim. She is not a happy customer.
Indonesia
Arif (October 22, 2015)
Arif ordered a blackberry from Lazada in Indonesia. The blackberry was not in the perfect condition he expected and he started encountering some problems with it. He sent a goods feedback message and emailed it as well but has yet to have the defective phone exchanged with a new one. However, he made four other orders and they arrived without any hiccup. Save for that one bad experience, he liked the fast delivery offered by Lazada.
Anonymous (October 9, 2016)
This user remains anonymous. He/she ordered a PC from Lazada.id and was yet to receive the gadget at the time of reviewing. He/she requested a refund but had not received a response at the time of review. He/she hopes the refund policy will be amended to improve customer satisfaction.
Anonymous (October 31, 2015)
This user was not impressed with the payment gateway process. He/she is unhappy because Lazada.id advertised a discount promotion but when he/she went to click on it, the site gave an error stating “Error calculating order” and then directed the user to the payment selection page. Other services were working just fine.
Vietnam
Manuel (April 6, 2017)
Manuel is not a happy customer. He ordered an item and opted to pay for it in cash on delivery. The item took too long to arrive and it wasn’t in good shape. As at the time of the review, he has not received a perfect item.
Ben (unknown, May 19, 2017)
Ben has used Lazada on his travels a couple of times and has never had problems with the service. However, he had some issues with a third party seller who accepted and pre-authenticated money off his credit card but later realized that the item was out of stock. He asked for a refund and it came to him in 2 weeks. His only concern was that it took long to have his money back.
Matty ( Unknown, July 4, 2017)
Matty has been ordering goods from Lazada for almost 2 years but has never had a problem. Delivery is always on time and he finds the ordering process quite easy. He is happy with the service and convenience that Lazada offers
Stephen Ocath (Unknown, June 27, 2017)
Stephen is optimistic about Lazada but he has a complaint about the services. He had some negative experiences with a third party seller. He was disappointed to have had a credit issue that lasted 6 months but was finally resolved amicably. He calls upon Lazada to vet the on-sellers more strictly to avoid such incidences.
Conclusion
The Lazada Group has had its highs and lows. It is still in the learning process and is still in its infancy. However, it has to address the issue of re-sellers. It has provided them a platform to sell their wares but when they provide substandard items, it is its reputation that is taking a hit. It should scrutinize them more carefully and ensure that they have all mechanisms in place to avoid having the customer wait for too long for an item or having defective items delivered. It will take a few more years until it is as efficient as Alibaba or Amazon but it is well on its way there.