Voice of the Industry

The transformative power of the ecommerce industry

Monday 8 February 2021 09:03 CET | Editor: Andra Constantinovici | Voice of the industry

Raymond Yang of Lazada Group discusses the rise of digital economy in 2020, highlighting livestreaming in online commerce as a focus point in the Asian marketplace ecosystem

2020 has been a reality check on the burgeoning role that the ecommerce industry will play in the lives of consumers and to drive growth among retailers and brands. 

The COVID-19 pandemic has accelerated this. ecommerce players have influenced consumer behaviours, mindsets, and even how they make purchases – in their use of technology and innovations to boost accessibility and engagement. In turn, consumers have discovered and will continue to discover new ways to maintain their lifestyles – from the convenience of buying groceries to ordering their food and even accessing healthcare services online. 

This trend is highlighted in a recent report by Google, Temasek, and Bain & Company, stating that in 2020 there are 40 million new internet users in Southeast Asia alone. This finding shows that 70% of the region’s population now has access to the digital economy, and these trends are here to stay, with 90% of users intending to continue making online purchases. 

In response to the penetration of the digital economy in the region as well as addressing the evolution of consumer behaviours, the ecommerce industry has pioneered innovations such as livestreaming, creating offline-to-online (O2O) experiences, and even pivoting quickly to meet consumer demands. 

Driving entertainment, boosting engagement 

Livestreaming is the new frontier for online shopping, digitalising businesses, creating new jobs, and keeping brands and sellers connected with consumers. This robust technology tool for marketing and engagement is known as LazLive at Lazada, and it lies at the heart of the platform’s Shoppertainment strategy that blends experiential shopping and entertainment. 

At its core, livestreaming enables brand partners and sellers to work with key opinion leaders to showcase their products to consumers. During broadcasts, consumers can ask about the products they are interested in and make purchases immediately through Lazada’s ‘See Now, Buy Now’ closed-loop feature. This innovation has proven to be an interactive and effective sales channel for brands and sellers to drive conversions. For example, during Lazada’s 2020 11.11 Shopping festival, its livestreaming technology gathered over 11 million views, and with more sellers adopting the service, it achieved a 380% year-on-year growth in Gross Merchandise Value (GMV). 

In addition to driving engagement and entertainment for consumers, livestreaming has also become an invaluable tool to empowering individuals to forge new career paths and for sellers to find alternate pathways to reach a broader customer base. Lazada developed the Grassroot Livestreamers Incubation Programme to provide training to young talent to facilitate their careers as professional livestreamers and content creators, thereby creating a new job category within the ecommerce ecosystem. 

Innovating physical spaces with digital presence 

The lockdowns and safety measures implemented by governments across the region accelerated the trend for department stores to transition online, and Lazada played a pivotal role in facilitating the mass online migration across Southeast Asia.

As the ongoing pandemic threatened the retail sector, Lazada welcomed additional department stores such as Isetan, Decathlon, and Marks & Spencer, but wanted to go a step further to ensure the survival of malls and their tenants by providing opportunities to establish new consumer touchpoints and revenue streams. 

Lazada did this by pioneering a new concept of the virtual mall and driving consumer awareness and interest via end-to-end marketing campaigns – by facilitating shopping malls to create virtual shopfronts, including for their tenants, on its platform. In Singapore and Thailand, Lazada onboarded two of the countries iconic malls, Marina Square Shopping Mall and Siam Center respectively, and dozens of their tenants such as Zara, Benjamin Barker, JBL, LEGO, and Aland. 

To complement this transition, Lazada integrated online shopping with the offline experience. For the Siam Center, a landmark shopping centre in Bangkok, Lazada launched ‘Lazada on Ground’, the first pop-up store in Thailand to livestream and showcase 40 of Lazada’s top brands on LazMall. This gave consumers the opportunity to make purchases from the pop-up store via QR codes and to pick up in the pop-up or have their items delivered directly to their homes. 

Meeting consumer demands 

Catering to the consumer demands has required the ecommerce industry to have the agility to pivot quickly and implement innovative solutions to expand assortments and scale delivery, on top of engaging and entertaining consumers. To achieve this, ecommerce players like Lazada have leveraged powerful data tools and the use of artificial intelligence to analyse buying patterns and forecast demands, in order to inform new solutions. One key area that Lazada quickly innovated in was to expand the scale and capacity of its grocery arm, RedMart, in Singapore. Tapping into its extensive data algorithms, RedMart made a bold departure from its two-hour timeslot delivery system to an area-based one at the height of the pandemic, serving different regions of Singapore on different days, so that every customer received their daily essentials once every three days. It also reset its system to reach more customers across the island and scale operations to serve 50% more customers within the first month. This efficiency was achieved partly by accelerating automation processes at its West Fulfillment Centre. 

Similarly, the ecommerce industry needed to meet gaps in convenient access to fresh produce during the pandemic. In Vietnam, recognising a need and demand for this, Lazada launched a fresh foods category to help fresh produce sellers and distributors transition from business-to-business to business-to-consumer models – to diversify revenue streams and provide consumers in Vietnam with ‘fast, fresh and safe’ access to their daily essentials online. Again, Lazada leveraged its logistics strength to ensure they could make deliveries within two hours to meet its promise of freshness to consumers. 

The road ahead 

In its role of meeting the demands of consumers this year, the ecommerce industry has firmly established itself in the mindsets and shopping behaviours of consumers. The industry will continue to be a force that shapes the future of the digital economy across Southeast Asia. It will continue to evolve to meet changing consumers’ needs and to play a leading role in reshaping and redefining the consumer experience by pioneering innovations that complement the existing retail environment and that surprise and delight consumers.

This editorial was first published in our Cross-Border Payments and Ecommerce Report 2020–2021, which assesses the change of pace that occurred in 2020 and provides a comprehensive overview of the major trends driving growth in this space, being the ultimate source of information for players interested in selling across borders. 

About Raymond Yang

As Chief Product Officer of Lazada Group, Raymond Yang drives the evolution of the company’s product architecture, design, and experience, as well as innovation of its platforms (ecommerce, eWallet, Logistics) and apps across Southeast Asia. Raymond has vast experience in this field, having worked at Google and China Telecom Guangzhou Academy.

About Lazada Group

Founded in 2012, Lazada Group is the leading ecommerce platform in Southeast Asia. We are accelerating progress in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam through commerce and technology. Since 2016, Lazada has been the Southeast Asia flagship platform of Alibaba Group powered by its world-class technology infrastructure.

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Keywords: Lazada, Raymond Yang, online shopping live streaming, digital economy, marketplace, Asia, APAC, Google, Temasek, Bain & Company, COVID-19, Zara, Benjamin Barker, JBL, Lego
Categories: Payments & Commerce
Countries: Asia
This article is part of category

Payments & Commerce