Lazada Group

Lazada Group is a Singaporean multinational technology company which focuses mainly on e-commerce. Founded by Maximilian Bittner with the backing of Rocket Internet in 2012, it is currently owned by the Alibaba Group after its acquisition in 2016.[1][2] In 2014, Lazada Group operated sites in multiple countries and had raised approximately US$647 million over several investment rounds from its investors such as Tesco, Temasek Holdings, Summit Partners, JPMorgan Chase, Investment AB Kinnevik and Rocket Internet.

Lazada Group
Type of businessPrivately held company
FoundedMarch 27, 2012 (2012-03-27)
Headquarters
Downtown Core, Singapore
Area servedSoutheast Asia, except Myanmar, Laos, Cambodia and Brunei
OwnerAlibaba Group
Founder(s)Maximilian Bittner, Rocket Internet [1][2]
Key peoplePeng Lei (Executive Chairwoman)
Chun Li (CEO)
Mary Zhou (Singapore)(CEO) [3][4]
IndustryInternet
ServicesE-commerce
(Online shopping)
Employees8,000+
URLwww.lazada.com (corporate)

Its sites launched in March 2012, with a business model of selling inventory to customers from its own warehouses. In 2013 it added a marketplace model that allowed third-party retailers to sell their products through Lazada's site; the marketplace accounted for 65% of its sales by the end of 2014.

In April 2016, Alibaba Group bought controlling stake in Lazada to support Alibaba's international expansion plans.[5]

In August 2018, Lazada is the largest e-commerce operator in Southeast Asia based on average monthly web visits.[6]

In September 2019, Lazada claimed it was the top e-commerce platform in Southeast Asia with more than 50 million active buyers annually.[7]

History

Lazada Group was founded in 2012 by Maximilian Bittner with the backing of Rocket Internet[1][2] with the intention of establishing the Amazon.com business model in Southeast Asia to take advantage of the nascent online consumer market and Amazon's weak presence there;[8][9] Rocket is a German incubator that builds companies that copy the business models of successful US tech companies in emerging markets.[8][10] Lazada's e-commerce websites soft launched in 2012.[11] It raised four rounds of funding in 2012 and early 2013: JP Morgan invested an undisclosed amount in September, Swedish investment firm Kinnevik invested $40 million in November, American private equity firm Summit Partners invested $26 million in December, and Tengelmann invested about $20 million in January 2013.[12] It also added a 2-day guaranteed delivery services, addressing one of the most common complaints about Lazada's service,[12] and one of its biggest challenges, which it had attempted to address by making a "massive, incalculable investment" in warehouses and delivery services.[13]

In June 2013, Lazada announced it had raised an additional $100 million, and it launched mobile applications for Android and iOS devices.[14] In December 2013, it raised an additional $250 million from Tesco PLC, Access Industries, and other existing investors.[15]

In May 2014, Lazada launched in Singapore.[16]

In November 2014, Temasek Holdings in Singapore led a funding round of $250 million, bringing the total Lazada had raised to approximately $647 million.[17] Also that month, Lazada announced that its marketplace platform accounted for more than 65% of its overall sales,[18] and that the number of third-party sellers on the platform had increased from ~500 in November 2013, to close to 10,000 in December 2014.[19][20] The number of employees across the region reached approximately 4,000.[20]

For 2014, Lazada's net operating losses were $152.5 million on net revenues of $154.3 million.[21] However, its percentage of losses relative to its Gross Merchandise Volume - the value of all the products sold through the site - was smaller in 2014 than in 2013 due to growth in its GMV from $95 million in 2013 to $384 million in 2014, driven by marketplace sales.[21][22]

In 2015, Lazada's challenges for growth were the preference for brick and mortar shopping among customers, with just about 1% of people buying online compared to 10% of International shoppers; the lack of credit cards and concomitant requirement to arrange cash on delivery systems, reliable delivery especially in rural regions, and the threat of competition from Amazon and Alibaba.[23]

In March 2016, Lazada claimed it recorded a total of $1.36 billion in annual GMV across its six markets in Southeast Asia, making it the largest e-commerce player.[24]

In April 2016, Alibaba Group announced that it intended to acquire a controlling interest in Lazada by paying $500 million for new shares and buying $500M worth of shares from existing investors.[25] The British supermarket company Tesco confirmed the sale of 8.6% of its holding in Lazada to Alibaba for $129 million.[26] Alibaba gave the following reasons for its investment: the market in South-East Asia has growing middle class income populations, estimated at that time to be around 190 million people in the region with a disposable income of $16-$100 a day, and this was expected to grow to 400 million people in 2020.[27]

In June 2017, Alibaba Group increased its investment in Lazada by an additional $1 billion, raising its stake from 51% to 83%.[28] Alibaba invested another $2 billion into Lazada in March 2018, and founder Max Bittner was replaced as CEO by Alibaba executive Lucy Peng.[29]

In December 2018, Peng was replaced by Pierre Poignant as CEO of Lazada, with Peng taking the role of executive chairwoman.[30]

In June 2020, Pierre Poignant was replaced by Chun Li as CEO of Lazada.[31]

See also

Shopee, another e-commerce company from Singapore

References
  1. Ansuya Harjani (17 April 2014). "Meet the man behind the 'Amazon of Southeast Asia'". CNBC. Retrieved 30 November 2019.
  2. Avantika Chilkoti (28 July 2015). "Rocket satellite Lazada gains altitude". Financial Times. Retrieved 30 November 2019.
  3. "Alibaba's Lazada Appoints Chun Li As New CEO". Businessworld). 15 July 2020. Retrieved 15 July 2020.
  4. https://www.lazada.com/en/about/leaders/
  5. Saheli Roy Choudhury & Arjun Kharpal (12 April 2016). "Alibaba buys controlling stake in Southeast Asian retailer Lazada". cnbc.com.
  6. "Sea's loss widens on investment in Shopee e-commerce platform". Business Times Singapore. 23 August 2018.
  7. "Lazada says it is e-commerce leader in Southeast Asia with more than 50 million buyers". South China Morning Post. 11 September 2019.
  8. Ryan Mac (31 July 2014). "Germany's Samwer Brothers To Become Billionaires With Rocket Internet IPO". venturebeat.com.
  9. Ingrid Lunden (12 November 2012). "Samwers' Online Shopping Mall Lazada Gets $40M From Shareholder Kinnevik To Push The Amazon Model In International". TechCrunch.
  10. Terence Roth (23 March 2016). "The E-Commerce Icarus". handelsblatt.com.
    - Max Chafkin, Lessons From the World's Most Ruthless Competitor, Inc., 29 May 2012
  11. Jon Russell, T-minus 10: Rocket Internet’s ecommerce clones are aiming to conquer Southeast Asia, NextWeb, 20 March 2012
  12. Jon Russell (22 January 2013). "Lazada, Rocket's Amazon clone in Asia, raises 'close to $20m' to develop its e-commerce marketplace". thenextweb.com.
  13. Susan Cunningham, Lazada, Tesco and the Logic of Logistics, Forbes, December 22, 2013
  14. "Rocket Internet's e-commerce giant Lazada raises $100M". 20 June 2013.
    - "Lazada launches mobile shopping app for Android OS". nationmultimedia.com. 19 June 2013.
  15. Newley Purnell (1 December 2014). "Lazada Group Raises $249 Million, Led by Singapore's Temasek". Digits - Wall Street Journal.
  16. Vanessa Tan (27 May 2014). "Lazada launches in Singapore with a new site and logo". Tech In Asia.
    - Victoria Ho (4 June 2014). "Lazada launches in its home ground of S'pore". asiaone.com.
  17. Jon Russell (29 November 2014). "Lazada, Rocket Internet's Amazon Clone In International, Raises $250M Led By Temasek". TechCrunch.
    - Rebecca Grant (9 December 2013). "Amazon clone Lazada raises jaw-dropping $250M to mainstream e-commerce in Southeast Asia". venturebeat.com.
  18. Min Jie Yaw (7 November 2014). "Lazada's Marketplace platform accounts for 65% of its sales revenue". e27.com.
  19. Claire Huang (6 November 2014). "Lazada grows revenue and stable of online 3rd-party sellers". nationmultimedia.com.
  20. "Lazada.com.ph celebrates 3rd year via shopping extravaganza". Business World Online. 23 March 2015.
  21. Susan Cunningham, Rocket's Lazada And Zalora Lost $235.3 Million In 2014 But Are Moving Toward Profitability, Forbes, 12 May 2015
  22. Steven Millward (20 March 2015). "Shoppers on Lazada last year spent $350 million as ecommerce booms in Southeast Asia". techinasia.com.
  23. Home-field advantage, The Economist, 7 March 2015
  24. "Lazada claims to be SEA's No 1 e-commerce player". Digital News Asia. March 10, 2016.
  25. Lulu Yilun Chen and Selina Wang, "Alibaba Expands in Southeast Asia With $1 Billion Lazada Deal", Bloomberg News, 12 April 2016
  26. "Tesco starts sell-off ahead of results with Asian disposal". BBC News. 12 April 2016. Retrieved 12 April 2016.
  27. "Southeast Asia's middle class is diverse, confident, and growing richer by the day". QZ. Retrieved 4 July 2016.
  28. Russell, Jon. "Alibaba ups its stake in International's Lazada with $1 billion investment". TechCrunch. Retrieved 20 December 2017.

  29. - "Alibaba doubles down on Lazada with fresh $2B investment and new CEO – TechCrunch". techcrunch. Retrieved 19 March 2018.
  30. "Lazada veteran Pierre Poignant is replacing Lucy Peng as CEO | The Star". www.thestar.com.my.
  31. "Lazada appoints a new CEO". Retrieved 29 June 2020.
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