Rocket Internet’s Lazada Silently Outgrow Local E-Commerce Incumbents
Just launched early this year, Rocket Internet’s Lazada has become of the most e-commerce site with big traffic in par with other big local players such as Blibli, Plasa, Dinomarket and even Rakuten. Of course traffic explains nothing like numbers of transactions does, but it’s still interesting to see how Lazada slowly outgrow the incumbents.
We talked to Lazada’s Managing Director, Magnus Ekbom about the e-commerce service and what they learned so far about Indonesia’s e-commerce scene. Together with former Plasa.com, Rizki Suluhadi, currently Lazada’s VP of Marketing & Business Development, Ekbom tried to learn about the market as fast as possible and execute the plan as well as make necessary changes on the fly, under fire.
“We are very happy with how we have been received by the Indonesian people and market. Ecommerce is booming and we never enter a market without the intention to be the leading players with the best offering for our customers” he said to us via email. It’s obvious that Rocket Internet is not playing around when they decided to enter Indonesian market, of course they must’ve had an exit plan on the table, that’s just how they do things.
Not long after they launched, the company immediately spend tons of money on advertising. Their image banners are all over the internet, trying to catch audience’s awareness and lure them into the site. This move is understandable because the local market is currently very young and immature, education is a big part of marketing investment especially for well-financed e-commerce companies. And Lazada is not the only one doing it, their competitors like Tokobagus, Blibli, Dinomarket etc are doing the exact same thing: aim for traffic and top of mind. “We are absolutely going to be one of the Top 20 sites in the country in a few months”, Ekbom added.
Been working in the industry for a few months now, we asked Lazada about the things they learned from Indonesia’s e-commerce market. Suluhadi told us, they learned about how to focus on the people instead of just focusing on the technology. Suluhadi added, “just like any other retail business, customer is king. And back again, its all about giving the people, the customer, the best experience”. Ekbom added the fact that Lazada aims to make the process of having a fast, secure and convenient shopping experience as best as they possibly could, “Logistics is something that is a challenge for all emerging markets, Indonesia being no exception”.
The next logical thing for Lazada is to grow and scale their business, they are very well-backed so it should be easier for them since they actually have a budget for promotion and talent hiring. Ekbom thinks that the biggest challenges for the e-commerce industry to grow in Indonesia are logistics (reliable deliveries) as well as bank’s ability to adopt online solution on a broader scale. He also added things like improved internet access and broadband speed as the things that would help e-commerce grow in Indonesia.
“Our game plan is very simple. We are here to win the confidence of the Indonesian people and be the leading online and e-commerce company” Ekbom said when asked about Lazada’s game plan in the future. Suluhadi predicts that marketplace or C2C model will still be big in Indonesia because it supports traffic where we can push deals, promotions and exclusive brands easily to visitors. For Suluhadi, volume still plays a big big role in order to help scale an e-commerce site. But at the end of the day, according to Ekbom, “it is about creating fantastic shopping experiences. That is something that will never change”.
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