Netease Technologies News March 4, according to foreign media reports, last December Alibaba appointed Pierre Poignant to take charge of Southeast Asia e-commerce platform Lazada. As one of the few Westerners in the top ranks of Alibaba, Penglong plays a pioneer role in Alibabas overseas business expansion.
Lazada has been plagued by management chaos since it was acquired by Alibaba. Peng Long, 40, is the third CEO in nine months. Lazada is currently engaged in a multilateral war with its well-funded and fast-moving competitors. In Indonesia, the largest and most promising market in Southeast Asia so far, Lazada has lagged behind its local enterprises.
Our vision in Lazada is to accelerate business development in Southeast Asia through business and technology, Penglong said in his first important interview as chief executive of Lazada. Its all part of Alibabas vision.
Southeast Asia is one of the last major e-commerce markets in the world without market leaders. One of the reasons is that more than 600 million people are distributed in four time zones and 11 countries. In 2012, Rocket Internet, a German company famous for copying other peoples ideas, intends to turn Lazada into an Amazon in Southeast Asia. Today, Lazada sells 300 million products to consumers in six countries, Lazmall sells brand goods directly to consumers, and Marketplace links small businesses to customers. Like Alibaba, Lazada also publishes advertisements that allow shoppers to rate and comment on products.
But the market differences between the two are very big. Lazada caters to a highly dispersed region with different languages, currencies and buying habits. Necklaces and headscarf pins are popular in Indonesia, but Malaysian consumers tend to buy diapers, Juicers and other goods.
In addition, delivering parcels in the chaotic, traffic-jammed cities of the region is a challenge; Indonesia is a huge island nation of more than 17,000 islands, sometimes taking weeks to deliver a commodity. In addition to Singapore, COD still dominates most of Asia. Numerous start-ups are trying to solve the problem of mobile payment services, but none is dominant.
As the first e-commerce company with business in six countries in Southeast Asia, Lazada has a pioneering advantage. Penglong has played an important role in integrating regional logistics network. The companys distribution network includes 31 logistics warehouses throughout Southeast Asia and an outsourced fleet of airplanes, trucks, motorcycles and bicycles. In large cities such as Jakarta and Bangkok, customers can receive packages in only 24 hours. These assets have also helped Lazada become the regions largest e-commerce company.
However, competition is heating up rapidly. Venture capitalists and strategic investors are investing heavily in online markets in Southeast Asia. Tencent, Amazon and other technology giants are among them.
They are under tremendous pressure, said Eric Wen, founder and CEO of Blue Lotus Research. He said Lazadas overall sales growth slowed in the last quarter. Fortunately, Alibaba can pass on all their lessons to Lazada and help them avoid the same mistakes.
Alibaba attributed the slowdown to a shift in business models, with Lazada providing more brokerage services between third-party merchants and buyers than selling products directly. Penglong is also betting that Alibabas technology and resources will help Lazada defeat other competitors. Lazada has been integrating its system with Alibaba to speed up distribution and locate target customers more accurately. Alibabas Ant Gold Clothing has been merged with Lazadas HelloPay to enhance payment processing. Alibabas innovations such as image search and live streaming have entered Lazada to make it easier for influential people to show off their favorite products. Lazada is also taking advantage of Alibabas huge multinational express platform, the newcomer.
Penglong joined Lazadas founding team in 2012. Before taking office last December, he was responsible for customer service, supply chain operations and logistics. Jessica Tan, deputy chief executive of Ping An Group, was Peng Longs colleague at McKinsey. Penglong has rich experience in every Southeast Asian market, but it still needs to be expanded, she said.
Penglong must also find a way to combine Lazada with Alibabas distinct cultures. What Ma Yun creates in Alibaba is a culture of fierce competition and idolatry, which gives employees more pride. Lazada is a very international company with employees from more than 60 different countries; it strictly follows the Rocket Internets Execution First approach. In fact, Penglong did not rule out the possibility that management would shuffle again in the future. To ensure consistency with his employer, he and his team go to Hangzhou headquarters at least once a quarter, while Alibaba Chief Executive Zhang Yong communicates with him by text message from time to time.
The company aims to serve 300 million customers and create 20 million jobs by 2030. This is a bold bet even for Lazada, the self-styled Amazon of Southeast Asia. Lim Kuo-Yi, managing partner of Singaporean venture capital firm Monks Hill Ventures, said the region was still in its infancy in e-commerce applications. (Lazada) needs more time to become a real leader like Amazon. (Han Bing)
Source: Responsible Editor of Netease Science and Technology Report: Wang Fengzhi_NT2541