As world shifts to borderless e-commerce system, Amazon & China-backed Lazada set for intense Asean competition.
Bloomberg News agency
Alibaba and Amazon are about to clash in Southeast Asia.
Lazada Group which Alibaba bought this year for US$1 billion will be right at the heart of that conflict.
Lazada is Asean’s largest e-commerce site.
Amazon, it’s competitor, is entering Asean next year.
LAZADA TAKING ACTION BEFORE AMAZON ENTERS ASEAN
Lazada is rolling out a series of initiatives in anticipation of the US giant Amazon’s entry into the Asean market next year.
For one, Lazada is expanding its delivery network within the region and beyond, via partners in China and Korea.
Lazada’s also on the prowl for investments and acquisitions to shore up its supply chain.
Lazada intends to delve deeper into online groceries in 2017, a notoriously difficult market it got into by buying RedMart.
RedMart is an online grocer in Singapore selling supermarket items for home delivery (see here).
ASEAN: THE NEW BATTLEGROUND FOR ECOMMERCE
Lazada’s home turf of Asean is shaping up to be the next battleground for Alibaba co-founder Jack Ma and Amazon chief executive officer (CEO) Jeff Bezos.
Asean has become the world’s fastest-growing internet arena, with a combined populace of 620 million people getting more comfortable with online shopping.
Asean, however, still lacks the transport and payments infrastructure crucial to the widespread adoption of e-commerce,
AFTER CONQUERING DOMESTIC MARKETS, GLOBAL EXPANSION PLANNED
“It’s a jungle out here,” Lazada CEO Maximilian Bittner said when asked about an incursion by the world’s largest online retailer Amazon into Asean.
“We are looking forward to seeing how they will differentiate themselves.”
[Note: One obvious way that Amazon is different is the shear quantity and variety of different products. that includes every book in print and strange things that only a few people like, for instance accordions and vibraphones, the author’s particular favourites]
Alibaba has established its dominance of China, and Amazon has taken the lead in the US. Now both are looking to make their mark overseas.
Amazon, in particular, has made progress in India.
ALIBABA’S TAKEOVER OF LAZADA
Alibaba took control of Lazada from Rocket Internet in what remains its largest overseas move to date.
The company Bittner started in 2012 is now pivotal to quickening the Chinese e-commerce giant’s so far tentative steps abroad, and fulfilling Ma’s ambitions of becoming a truly global business.
AMAZON’S PLANS FOR ASEAN?
Amazon meanwhile hasn’t yet voiced its intentions for Southeast Asia, but the industry expectation is that its constant quest for growth will lead it there by 2017.
Techcrunch reported in November that Amazon is likely to bring its Prime delivery service and Amazon Fresh to Singapore in the first quarter, using the wealthy, cyber-savvy city state [Singapore] as a springboard to the rest of the region.
Amazon Fresh offers same or next day delivery of food straight to the home (see here).
Amazon has demonstrated a willingness to spend on building a local presence, and an ability to thrive in the difficult, fragmented market conditions that characterise Southeast Asia (Asean).
ALIBABA DEFEATED AMAZON IN CHINA
Alibaba’s experience quashing Amazon in China may yet prove indispensable.
Although a Chinese company defeating an American company in China perhaps doesn’t sound too difficult.
Central to Lazada’s effort is building a system that can deliver goods into Southeast Asia from merchants in other countries, a cross-border model akin to Alibaba’s.
The region is now split between a mere handful of operators dominant in certain areas, including MatahariMall and Tokopedia in Indonesia and unicorn startup Garena.
LAZADA’S BUSINESS PLAN
Lazada covers six countries — Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam — and runs 12 warehouses and 92 distribution centres from which it conveys goods directly to buyers.
Lazada counts Kerry Logistics Network and DHL in Thailand and JNE Express in Indonesia among its more than 100 logistics partners. It has also teamed up with China’s state postal service and CJ Korea Express Corp.
In September, Lazada’s volume in Indonesia grew 2.5 times from a year ago.
Lazada is looking at building a better, more sophisticated logistics capability.
The world is shifting toward a borderless e-commerce system and that’s very much the vision of Alibaba and Lazada.
ONLINE GROCERIES COMING TO THAILAND SOON
Now that RedMart’s given Lazada a foothold in Singapore, Lazada also plans to begin selling groceries online in one of the capital cities of Malaysia, Indonesia or Thailand as early as the second half of 2017.
RedMart has more than 150 trucks ferrying an average of 22 food items from chocolate to frozen dumplings per order.
It plans to cut delivery times to four to six hours (from mostly next-day) by the end of the first half of 2017.
By the second half, the company will offer an express service, shipping groceries within an hour or two of ordering online.
THE DIFFICULT GROCERY BUSINESS
The grocery business is seen as a notoriously difficult business to do online, but it’s the largest market representing 60% of overall Southeast Asian retail.
Customers are much more engaged. They visit a store twice a week so the frequency allows you to develop a deep relationship with customers.
abroad : in or to a foreign country – ในต่างประเทศ
acquisition : the process of buying something; something that has been bought – การซื้อ, การได้มาซึ่งการเข้าถือสิทธิ์
adoption (noun): starting to use something new – การนำมาใช้, การรับเป็นของตน
ambition : the desire or determination to be successful, rich, powerful, etc; something that you want to do or achieve very much – ความทะเยอทะยาน, ความปรารถนาอันแรงกล้า
arena : an area of activity that concerns the public, especially one where there is a lot of opposition between different groups or countries – เวที
average : an amount calculated by adding several amounts together, finding a total, and dividing the total by the number of amounts – เฉลี่ย, ค่าเฉลี่ย
battleground : a place where a battle (a major fight, especially in war, but in this case against a flood) is being fought or has been fought – สนามรบ, แนวรบ
borderless : without limits – ไม่มีขอบเขต
capability : the ability to do something – ความสามารถ
capital : the most important town or city of a country, usually where the central government operates from – เมืองหลวง
characterise : to describe someone or something in a particular way – บรรยายอุปนิสัย, แสดงลักษณะ
chief executive officer (CEO) : the person with the highest rank in a company or an organisation – ผู้บริหารสูงสุด, ซีอีโอ (ประธานบริหาร)
clash : to fight – ปะทะ
co-founder : a person who works with another to establish an institution, business or organisation –
combined : counted together – รวมกัน
comfortable : an easy life without difficulties – ความสะดวกสบาย
competitor : a person, team or company that is competing against others – ผู้แข่งขัน, คู่แข่ง
conditions : the circumstances or situation in which people live, work or do things – เหตุการณ์, สภาพการ, สถานการณ์
conflict : an angry disagreement between people or groups – ความขัดแย้ง
convey : send –
counts : includes –
crucial : extremely important because it effects the result of something – สำคัญยิ่ง
delivery : the act of taking goods, letters, etc. to the people they have been sent to – การส่ง, การส่งสินค้า
delve : to try hard to find out more information about something – ค้นหาข้อมูลอย่างละเอียด
demonstrate : to show something clearly – แสดงให้เห็น
differentiate : to see or show a difference between things – แยกแยะระหว่าง
directly (adv): in a direct line or manner; immediately – โดยตรง, ทันที
distribution : the process of giving something out to many different places – การแจกจ่าย
distribution centre : a warehouse that a company uses to store goods before they are sent to stores (distributed to stores) –
dominance : control – การมีอำนาจเหนือ, การครอบคลุม, การควบคุม
dumpling (noun): a small ball of dough (= a mixture of flour, fat and water) that is cooked and served with other dishes – เกี๊ยว
e-commerce (noun): business that is conducted on the Internet – อีคอมเมิร์ซ (การพาณิชย์อิเล็กทรอนิกส์)
expand : to make or become larger – ขยาย
expectation (noun): what is expected – ที่คาดไว้
express (adj.): going very fast; going faster than the ordinary service –
ferry : to transport people or goods – ส่ง
foothold : a secure position from which you can improve your situation – ฐานที่มั่นคง
fragmented : not unified; broken into separate parts – แตกแยกเป็นส่วนๆ, ขาดเป็นตอนๆ
fulfilling : causing somebody to feel satisfied and useful – ก่อให้เกิดความรู้สึกพึงพอใจ
global : world – เกี่ยวกับโลก
goods : things that are produced to be sold; possessions that can be moved – สินค้า, สิ่งของ
grocery : a shop/store that sells food and other things used in the home – ร้านขายของชำ
growth (noun): economic growth, an increase in economic activity – การเติบโต
in anticipation : the fact of seeing that something might happen in the future and perhaps doing something about it now – ความคาดหมาย,ความมุ่งหวัง,การทำล่วงหน้า
in particular : especially or particularly – โดยเฉพาะ, โดยเฉพาะอย่างยิ่ง
incursion (noun): the sudden appearance of something in a particular area of activity that is either not expected or not wanted – การบุกรุก, การรุกล้ำ
infrastructure : a set of systems within a place or organisation that affect how well it operates, e.g., the telephone and transport systems in a country or the system of train tracks that a railway uses – สาธารณูปโภค
initiative : a new action or movement, often intended to solve a problem – ความคิดริเริ่ม
intend : to plan to do; to want to happen – ตั้งใจให้เกิดขึ้น, วางแผนไว้
intention : a plan in your mind to do something – ความตั้งใจ เจตนา แผนการ
investment (noun): the act of investing money in something – การลงทุน
jungle (noun): a thick tropical forest, a place with many trees and wild animals and few people – ป่า
lack (verb): to not have something – ขาด
local : in or related to the area that you live, or to the particular area that you are talking about – ท้องถิ่น
logistics : the practical arrangements that are necessary in order to organise something successfully, especially something involving a lot of people or equipment – การส่งกำลังบำรุง
looking at : thinking about and evaluating a possible project to see if it is worth doing –
make their mark : succeed; have success –
meanwhile : at the same time – ในเวลาเดียวกัน
move (noun): action –
network : a large system of connected parts, organisations, people, etc. – เครือข่าย
notoriously : famous for something bad – ซึ่งมีชื่อเสียงในทางไม่ดี
online : controlled by or connected to a computer or to the Internet – ออนไลน์, การเชื่อมต่อผ่านระบบเครือข่ายทางคอมพิวเตอร์
order (verb): to officially request a company for some product you want to buy – สั่ง
order (noun): something that somebody is told to do by somebody in authority – คำสั่ง
overseas : in another country – ต่างประเทศ
partner (noun): two people, businesses, organizations, etc that work together on some project or business – ผู้ร่วมมือ, ผู้ร่วมกระทำ
partner : one of the people who owns a business and shares the profits, etc or works together with another business in an activity – หุ้นส่วน, ผู้ร่วมมือ,
pivotal : the central or most important thing or person in a situation –
populace : all the people living in a country or area; the population –
presence : the fact of being in a particular place, thing or situation – การเข้าร่วม, การมีอยู่
progress : the process of improving or developing, or of getting nearer to achieving or completing something – ความก้าวหน้า
prowl : to move quietly and carefully around an area, especially with the intention of committing a crime – เดินด้อมๆ มองๆ
quest : a long search for something, especially for some quality such as happiness – การแสวงหา
region : a large area of land or space, usually without exact limits or borders – ภูมิภาค, ขอบเขต, แถบ, บริเวณ
rolling out : introducing something new; to introduce a new product or service; launch – เปิดตัว, เริ่มนำ
savvy : having practical knowledge or understanding of something – รู้,เข้าใจ, มีความรู้ความสามารถ
shaping up to be : turning out to be; becoming –
shift : a change in something – การเปลี่ยน
shore up (verb): to help to support something, often that something that has problems or that is weak and in danger fo failing – ยัน, พยุง, เสริม
site : website –
so far : up until this time – จนถึงทุกวันนี้
sophisticated : complicated and advanced in design or planning – ซับซ้อน
springboard (noun): something that helps you start an activity, especially by giving you ideas – จุดเริ่มต้นทางความคิดหรือการกระทำ
step : one of a series of actions that you do in order to achieve a particular aim – ขั้นตอน
supply chain (noun): the series of processes involved in supplying a product to someone, including the companies that manufacture all the parts going into a product – โซ่อุปทาน, สายโซ่อาหาร, ห่วงโซ่อุปทาน
teamed up with : cooperate with – ร่วมมือกับ
tentative : not definite, or not certain – ที่ยังไม่แน่นอน
thrive : to become, and continue to be, successful, strong, healthy, etc. – เจริญ,เติบโต,ก้าวหน้า
to date : until now –
transport : moving people or things from one place to another – การขนส่ง
truly (adv): in the most complete, correct, or exact way – อย่างแท้จริง
turf : a place or area that someone thinks of as being their own – เขต ฐาน
vision : the ability to imagine how a country, society, industry, etc. could develop in the future and to plan in a suitable way – วิสัยทัศน์
voiced : said what you think about a particular subject, especially to espress a doubt, complaint, etc. that you have about it – แสดงความคิดเห็น
wealthy : having a large amount of money, land, and other valuable things – ที่มั่งคั่ง ร่ำรวย
widespread : happening or existing in many places, or affecting many people – อย่างแพร่หลาย
willingness (noun): not objecting to doing something; having no reason for not doing something – ความเต็มใจ, ความสมัครใจ