Lazada Online Shopping: History, Road to Success of the Biggest Online

02 June, 2017 | Jarriuss
Lazada Online Shopping: History, Road to Success of the Biggest Online

Trying to find a good online shop that provides many premium items with a warranty? Try Lazada! It’s the biggest olshop (Online Shop) in Southeast Asia that becomes one of the safe havens for shopaholics. Lazada, unfortunately, isn’t very popular in Europe and in the US and therefore, this article will provide you more information about.

• History

• Road to Success

• Present Year

As the existence of online shops has mushroomed in recent years, it takes more than an outstanding service and branded high-end products to stand up from others. Let’s see below the history of Lazada Online Shop that makes it prominent and dominate the online market.

History (Lazada)

• Early Beginning

If you thought that Lazada Online Shopping was founded by the Asian, you might want to reconsider your idea. Not many people know that the biggest online shop in Southeast Asia was actually founded by a German e-commerce, Rocket Internet, in 2012 in Singapore. The website has been intentionally established to take advantage of the online consumer market in Southeast Asia where Amazon’s presence is weak.

For those who have never heard about Rocket Internet, the company was the world’s largest internet incubator, founded by three brothers named Alexander, Marc, and Oliver Samwer. Their corporation’s business venture has been spreading in different continents like Africa, Asia, Europe, North America, and South America.

Rocket Internet’s enterprises also include Fab, Furnish, Jumia, Zalora, Zalando, Zando, Wimdu, The Iconic, Wunderkarten, Glossy Box, Lazada, and much more. The company, up until now, keep growing and expanding its private type of business to more countries.

• Reaching Southeast Asia Market

Not until 2014, Lazada Group had eventually made a name in Southeast Asia, operating sites in several locations including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. The company that is based in Singapore has grossed over US$647 million over several investment rounds from Tesco, Temasek Holdings, Summit Partners, JPMorgan Chase, Investment AB Kinnevik, and the last but not least, Rocket Internet.

lazada

You should also note that each counterpart mentioned above sells inventory to customers directly from the store’s warehouse, which located in the named regions with the currency recognized by the local community they are at. For example, if you lived in Indonesia, you will pay the goods with the currency used in that region which is Rupiah and the goods will be delivered from the store’s warehouse also located in Indonesia.

Note: Lazada Online Shop website was launched in March 2012. A further improvement was added in 2013 where third-party retailers can sell their products through Lazada’s site.

Road to Succes

The easiest way to get people to know a product is through social media. No one really knows what Lazada was even after the launching of the website back in 2012. Only after it made several appearances on TV networks and social media like Facebook, Instagram, and commercial ads in Google, People starts to visit the site and buy premium items from there.

Lazada was even listed as one of the most talked brands during its anniversary celebration years ago. Furthermore, this online shop was also acknowledged by the Golden Globe Annual Award as the ‘Best Online Shopping Mall for 2013’.

Since then, Lazada keeps building up its reputation by refining its website and services. Just like other businesses, this online shop is also not immune to problems. The Lazada Group had ever been in a growth challenge when majority shoppers prefer in brick and mortar shopping concept rather than online shop.

The reason for that idea is based on the payment system where like common olshop, the method is only limited to credit cards and Cash on Delivery (CoD) systems. The problem is the Southeast Asian at that time aren’t using or even having credit cards as much as the Americans, as a result, it’s only 1% people buying online compared to 10% of US shoppers. Other reasons like reliable delivery in rural area and competition from Amazon and Alibaba also contributed to its retardation back in 2015.

lazada

Note: Despite that downfall, the Lazada Online Shopping claimed that it still recorded a total of $1.36 billion from its combined six markets across all over Asia. In March 2016, Lazada Group became the SEA’s No 1 e-commerce player.

Present Year

Last year, Alibaba Group announced that the company is attracted in acquiring a controlling interest in Lazada by paying $500 million new shares and buying $500 million worth of shares from existing investors.

The reason behind this investment has something to do with the mutual partnership between China and Southeast Asia market as the latter has estimated 190 million middle-class populations with, at least, a $16-$100 income a day. It is also believed that this number will increase to 400 million people in 2020.

By investing from Lazada, Alibaba Groups that is very well known in China can also let its China sellers have access to new sellers and buyers from Lazada. This is truly a win-win solution for both companies.

Note: Alibaba group saved billions by deciding not to rebuild another e-commerce with the same logistic and infrastructure similar to the China Market. Alibaba Group, up until now, still becomes the owner of Lazada Online Shop.

lazada
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