Lazada Malaysia plays the logistics game, and more
By Lum Ka Kay March 11, 2016
- Has its own fleet of about 100 riders in the Klang Valley and Kuching
- 80% of its customers live outside Kuala Lumpur, however
E-COMMERCE startup Lazada Malaysia is exploring a same-day delivery service, and now has its own fleet of riders.
Its chief executive officer Hans-Peter Ressel (pic above) said the idea is still in its testing phase, and as of today, the company has made 100 same-day deliveries in the Klang Valley for orders placed before noon.
“We’re testing our capabilities now in the Klang Valley, but if the time is right, we will then roll this out to other areas nationwide to increase our logistical footprint,” he told Digital News Asia (DNA) on the sidelines of a media briefing on the company’s 2015 performance in Kuala Lumpur on March 9.
READ ALSO: Lazada claims to be SEA’s No 1 e-commerce player
According to Ressel, Lazada Malaysia now has about 100 riders across the Klang Valley and in Kuching, Sarawak.
“If you’re just a marketplace, it might be hard to own the fulfilment experience – but if you also have your own warehouse and riders, you can enhance the fulfilment experience.
“With our own fleet of riders, we can continue to test out our capabilities until we have a certain reliability and success rate where we can offer this to a larger audience,” he added.
However, Ressel doesn’t see Lazada Malaysia as becoming a courier company as this is not its core business.
“But when it comes to additional services for our customers, we would like to do more for them, such as reaching out to areas that don’t have cash-on-delivery,” he said.
“We see our own fleet as a value-added service, next to the existing parcel-delivery companies.
“And if we see that this is picked up in a positive way by our customers, we will explore the option of accelerating this part of the business as well,” he added.
For Lazada Malaysia, 2016 is also about expanding beyond metropolitan areas.
Ressel said that the startup hopes to build its brand presence with Malaysians living outside Kuala Lumpur as they make up 80% of its customer base.
“We want people from all over Malaysia – including those from Johor, Terengganu and of course East Malaysia – to have quick access to our products.
“Penetrating rural areas is what we believe in, for Lazada Malaysia’s future. We want to be present in every part of Malaysia, including villages.
“People who have to drive for an hour to go to mall – I don’t want them to do that anymore. I want these people to shop with us,” he added.
In line with this, Lazada Malaysia opened a 14,000 sq ft warehouse in Kuching, in the East Malaysian state of Sarawak, last May.
While the e-commerce space in Malaysia, and in South-East Asia as a whole, is heating up, so are the competition and challenges.
Speaking on the regional exit by Japanese giant Rakuten, which had announced it was shuttering its South-East Asian online marketplaces, Ressel said he had “zero worry” of that happening with Lazada.
The Rocket Internet company began operating its marketplace in August 2013, and now claims over 10,000 merchants on board in Malaysia.
“In fact, we’re over excited over the overall market growth, and of course, Lazada’s growth,” said Ressel.
“What we’re trying to achieve is to become the platform of choice for all sellers or merchants and customers, by enhancing their experience with us.
“These are the fundamentals that have made us successful – thinking from a customer or seller perspective. We have done that and we will continue to do so, as 2015 was a great year for us,” he declared.
Lazada Group announced it recorded US$1.3 billion worth of annualised Gross Merchant Value (GMV) across its six markets in South-East Asia: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Not just about price tags
The intensifying competition is also seeing price wars, but Ressel believes that there are other areas that e-commerce players should look into to attract more customers.
“Let’s be fair, we all want to have the best prices, but I also think there are others things that we should look into as well,” he said.
These would include being able to offer original warranties, quicker delivery including same-day delivery, and good return policies.
“All this is hard to quantify, but we believe that Malaysians who are not fully convinced of online shopping would trust a credible platform that works with brands in an exclusive or official way,” he argued.
Having said that, Ressel stressed that Lazada Malaysia will not slow down on its own price initiatives.
“But if there is a rare case that we’re unable to be the most competitive platform in terms of price, then we still see a lot of value in the other parts of our business, including the fulfilment experience,” he said.
“And I think that most of the time, these things are pretty underestimated because if things don’t go well, how are you going to deal with the situation?
“I think in the end we are all trying to be the most competitive and attractive platform for consumers, but attractiveness isn’t defined only by price,” he added.
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