Lazada Philippines bullish on e-commerce growth in 2016

MANILA, Philippines - Lazada Philippines co-founder and CEO Inanc Balci has a lot of reasons to be optimistic about the coming year.

Launched only three years ago in 2012, Lazada now offers an assortment of over 1.2 million products from over 4,500 merchants and 1,700 brands on its website. With 80 percent market share, the e-tailer is also now the country’s biggest e-tailer and is setting its sights on more aggressive targets anchored on three main pillars - large assortment of products, low prices best customer service.

Fresh from the success of the month-long ‘Online Revolution’ campaign that started on Nov 11, Balci  disclosed that during the start of the campaign, which coincided with the 11.11 Global Shopping Festival day itself, the e-commerce site has exceeded its targets.

“In one day, there were 2.4 million visits on the website versus 700,000 of last year,” Balci shared. “Customers bought 120,000 items on the website. To be honest, our target is less than 100,000 and we were so happy. Last year, we sold 44,000 items.” 

Lazada sold more than 5,000 smartphones and 4,500 packs of disposable diapers. Sixty percent of orders are from mobile devices and 70 percent of total orders come from outside the national capital region.

“More and more customers are buying from mobile devices. Lazada is becoming a mobile commerce company and as mobile smartphone penetration is increasing we are selling more smartphones,” Balci said.

The so-called 11.11 one-day shopping frenzy, also known as the Singles’ Day Festival, is a 24-hour online shopping marathon popularized by the Alibaba Group in China. 

While the event is not yet very popular in the Philipines, its results this year is very encouraging. Nov 11 was the start of an almost month-long series of sale that saw Lazada dish out very innovative deals in the market.

Balci shared that on 11.11, Sony Bravia 32” LED TV was sold out in 48 minutes, Sandisk 32 GB Dual USB Drive sold out for the first 18 hours and the exclusive Alcatel Flash 2 16 GB sold over 12,000 units on the Lazada website.

On the first day of the final three days of grand sale that started Dec 11, shoppers bought over 150,000 items from the Lazada website and Lazada mobile app, a 25-percent uplift from the start of its ‘Online Revolution’ sales campaign.

In Southeast Asia as whole, where Lazada has presence in six countries -  Indonesia (www.lazada.co.id), Malaysia (www.lazada.com.my), the Philippines (www.lazada.com.ph), Singapore (www.lazada.sg), Thailand (www.lazada.co.th) and Vietnam (www.lazada.vn) - the three-day finale of the ‘Online Revolution’ campaign  chalked up $40 million in Gross Merchandize Value (GMV).

Mobile reigned, accounting for 60 percent of the GMV as more customers across the region choose to thumb through endless deals from their mobile devices. Moreover, traffic spiked to an all-time high of 36 million visits, with approximately 1.7 million items ordered.

“The campaign has become the biggest retail event of the year in Southeast Asia since its initial launch on 12 December 2012 as more consumers embrace online shopping. We will continue to enhance the customer experience and bring the best of online shopping through unbeatable assortment, great value, and convenience,” said Maximilian Bittner, CEO, Lazada Group, in a news release.

While Balci noted that the current market size of e-commerce in the Philippines is a mere 0.2 to 0.3 percent of non-food, non-travel retail sales, the projection is that it will leap to around four percent in five yearstime.

“Non-food and nontravel retail is a $70-billion industry and you can say that the e-commerce penetration is 0.25 percent of that. In 2020, we predict this market to be around $110 million and e-commerce is going to be around $5 billion (P220 billion). It’s a big market,” he said. “The key is to continue investing in the three main pillars of its operational infrastructure.”  

The e-commerce site is also relying on organic market growth, which means that as the number of  Internet users and smartphone users increase, there will also be more e-commerce users. 

“Philippine GDP is also growing, disposable income is growing. If you  put all these together, you are going to be seeing a very aggressive  e-commerce growth in the Philippines,” Balci added.

It’s a few days to Christmas eve and it’s probably still a good time to shop online. Asked what he might like to buy on the shopping website himself a few weeks ago, Balci said he will definitely go for the best-selling Hoverboard Wheel Self Balance Electric Scooter that was sold out in November. 

It was featured again on the site as a “Shocking Deal” last Dec 10 at only P4,999 to the first 10 customers. The price on the original sale was P7,999. This probably proves that in this country of malls, there could be space for electronic commerce and it is a growing force.