MANILA, Philippines – Riding the early stages of the local e-commerce boom, the country’s leading online shopping site (based on page views per visitor daily, according to Web analytics source Alexa.com) rolls out its first huge, “crazy” sale in 2015.
In a media meeting on Thursday, January 22, co-founder and CEO Inanc Balci said that his company wants more and more consumers nationwide to “get the encouragement to buy online, and [to] become online shoppers for the rest of their lives.”
Called the Chinese New Year kick-off sale on Tuesday, January 27, this major event marks the beginning of a sale series for Lazada Philippines. This is part of the company’s aggressive efforts to increase e-commerce penetration in the Philippines.
This “one-day only” shopfest comes in the wake of the month-long Online Revolution, the 2014 culminating sale that yielded one-day, higher-than-average volume of orders on two dates for Lazada: the start date November 11 with a 7-fold increase, and the end date December 12, 12-fold.
Balci indicated that they are set to do another series of big sales this year, recognizing the activity as a growth driver not only for them but also for the market.
Events of this scale bring “a lot of logistics challenges; they make the borders flex,” Balci explained.
He added that in a way, Lazada is helping Philippine infrastructure get better. Forecasting a surge of orders months before the big event, the online shopping site ensures that merchants, suppliers, and third-party logistics companies are all in the effort.
“This flexes certain muscles, but in the end, we see that it makes everyone better. It makes our process better,” Balci said.
Sale series as growth driver
For the kick-off sale, Lazada is doubling the members of its logistics team in anticipation of a bigger demand. There were 800 workers in the warehouse for the company’s Online Revolution sale.
To encourage customers, the kick-off sale brings together a big assortment of products, competitive prices, and shopping convenience. It will feature a night of sales promotion, 16 hourly flash sales, deals on tech and lifestyle items, hourly games, and discount vouchers from partners such as Smart Bro, Maybank, Citibank, BPI, and BDO.
There will be mobile devices, fashion items, household essentials, and all sorts of merchandise on its virtual shelves, all tagged with the lowest prices.
Lazada’s marketplace model allows its merchants to compete with their prices, sometimes the final amount falling lower than what some of these retailers offer offline.
Among other brand and institutional partners are Cebu Pacific, Samsung and crowd favorite Xiaomi, a Chinese tech brand.
The rise of online shopping
According to a UBS Securities report, the ASEAN e-commerce market is $500 million to $1 billion in size or 0.2% of total retail sales. The opportunity set is as high as $35 billion by 2020. This means “business is thriving,” with the Philippines on track to becoming one of the top performers in two to 3 years.
As such, Balci is optimistic that between 2015 and 2016, there is going to be an inflection point.
“More and more people will buy [online] in the Philippines,” shared Balci.
He was quick to add, though, that this will depend largely on the quality of customer service his company will provide over that period. This point he could not overemphasize: “This business will not succeed without the best service.”
Since its inception in April 2012, Lazada has set up an in-house customer management crew, the cash-on-delivery system, and its own logistics unit to address several challenges in the archipelago such as low credit card penetration and inefficient supply chains.
Now it has an almost equal penetration between the urban (Metro Manila, Metro Cebu) and rural areas.
The Rocket Internet-backed group continues every day to build critical mass for the market.
Online retail shares 0.3% of nationwide retail sales. The room for growth is massive, reflecting movements in the region.
As Filipino netizens become more and more attuned to the use of mobile devices and remain one of the top active users on Facebook, Lazada is ready to take e-commerce to another level: mobile and social commerce.
Willingly setting trends, it welcomes the arrival of traditional players such as The SM Store, which launched its online platform in December 2014. As its chief and other e-commerce experts know, this will only enlarge the market as consumers can take it as a sign that it is no longer scary to shop online.
Building consumer trust
Purchasing a fake item online remains a discouraging possibility in the country.
Add this to the hard-to-please behavior of Filipino buyers.
How does Lazada maintain the quality and authenticity of the products sold on its platform?
As a retailer, it performs a quality check on its own inventory. As a marketplace, it deals with it this way: “Our merchants upload their products online. But what we do is, if we catch it (the fake item) before it goes online, we give a warning to the merchant; the second time, we take the merchant offline even if the merchant is our top merchant,” said Balci.
“No excuses,” Balci said. “Our business’ future depends on customer feedback,”
At any rate, what Lazada seeks to keep is its return customers.
It lso aism to make a person purchase his first item on the Internet and see the online site as the best alternative to physical stores.
Above all, Lazada wants to be known as the go-to place for online shoppers in the Philippines.
And how it will handle a series of huge, “crazy” sales will be an indicator of its success. – Rappler.com
An independent business writer, Shadz Loresco follows stories on entrepreneurs, technology, and finance. Her background includes 5 years of writing and editing for online business-to-business (B2B) marketing and reputation management.
Shopping cart on laptop image via Shutterstock