While Lazada has kept mum about details related to the next launch of its Amazon Prime-style loyalty program, its CEO today revealed that it’s definitely in the cards for Indonesia.
“Absolutely [rolling it out in Indonesia], but I can’t tell you when,” Max Bittner said during a fireside chat at Tech in Asia Jakarta 2017.
Teaming up with US companies Uber and Netflix, Lazada first launched the rewards program “LiveUp” in Singapore earlier this year. Benefits include rebates on purchases from Lazada and unit Redmart, free and faster Lazada delivery, discounts on Uber, and six months off a Netflix subscription.
LiveUp is the Alibaba-backed ecommerce firm’s answer to Amazon’s Prime service, which offers benefits like same-day delivery and video streaming. The US ecommerce juggernaut forayed into Singapore this year, possibly a prelude to its big push into Southeast Asia.
Alibaba and its majority-owned Lazada are betting on the growth of online retail in the region, especially Indonesia.
A 2016 report by Google and Singapore’s sovereign fund Temasek pegged Southeast Asia’s ecommerce spend at US$88 billion by 2025 – versus only US$5.5 billion in 2015. Indonesia will account for 52 percent share of that market.
LiveUp forms part of Lazada’s strategy of defending its slice of the ecommerce market.
In Singapore, Bittner claimed they’ve seen paying LiveUp customers grow more than three times their target, although he didn’t divulge concrete figures. He also said that “the effect of really bringing customers in both Redmart and Lazada and increasing frequency of customers has worked much nicer than I would have anticipated.”
He is bullish about seeing the same growth in the “hot” Indonesian market.
“I feel in the last 12 months, the attention has shifted from India to Indonesia. This is really the one big opportunity and it’s amazing to see how many people are looking at it, how many investors there are,” he stated. “It’s incredibly competitive.”
In terms of trends in Indonesia’s 250 million-strong economy, Bittner said the key thing they’ve observed is how sophisticated merchants have become. “Merchants have gotten so much better in adopting and using data, they’re getting more and more hungry for data.”
He said efforts to build out their infrastructure capabilities in Indonesia are underway. Lazada will open two more warehouses in the country this year, bringing its total to five. Across Southeast Asia, the company has 15, he said.
He also mentioned the possibility of opening a physical mall in Indonesia, citing the “blurring” lines between online and offline retail. This is already happening in China, where Alibaba is putting up more Hema stores. The stores allow customers to shop, dine, and order groceries for delivery from their mobile phones and use Alipay to make payments.
“Offline retail is either to showcase your products to gain trust, for people to get a feel of what you’re selling or can be as a supply chain or a warehouse. If you look at the work that Alibaba does in China with the Hema stores, where you have fully integrated offline and online stores […] that really represents everything that ecommerce and retail can be,” Bittner explained.
This is part of the coverage of Tech in Asia Jakarta 2017, our conference taking place November 1 and 2.
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