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Lazada expects another record-breaking performance for 11.11: CEO Pierre Poignant

·Finance Editor
Pierre Poignant, CEO, Lazada Group. (PHOTO: Lazada)
Pierre Poignant, CEO, Lazada Group. (PHOTO: Lazada)

SINGAPORE — Lazada expects another record breaking performance for the 11.11 Shopping Festival this year, according to Pierre Poignant, Lazada Group's chief executive officer.

The bullish projection is based on the surge in orders for the event in recent years, Poignant said in a recent interview with Yahoo Finance Singapore. “Today’s best performance is tomorrow’s baseline,” he added.

Lazada saw a surge in 11.11 or Singles Day orders to 7 million last year from 1,000 in 2012. It broke records on 11.11 last year, with 20 million shoppers “browsing and grabbing” deals and 1.2 million orders registered within the first hour.

Poignant explained that the Singapore-based company, which aims to serve 300 million customers by 2030, doesn’t reveal revenue data for the event as the measure is not its main focus.

“We don’t measure success based on total sales, we measure based on engagement of consumers,” said the 40-year-old Frenchman, who is one of the co-founders of Lazada.

Formed in 2012 by Rocket Internet, a German company, Lazada is seen by e-commerce players as an Amazon for Southeast Asia. It became a subsidiary of Alibaba Group after the Chinese e-commerce giant took control in 2016 through a US$1 billion deal.

Since then, Lazada has become more wired within the Alibaba economy for the Singles Day event.

Alibaba, which created Singles Day a decade ago, recorded US$30.8 billion in gross merchandise volume (GMV) last year, a rise of nearly 27 percent from 2017. It didn’t break down the numbers for Lazada. GMV is a metric often used by e-commerce businesses to measure total sales transacted through their platforms.

As the region’s leading online shopping and selling platform, Lazada said it has 400,000 sellers and 7,000 brands. Its Lazmall sells brands directly to consumers, while the Lazada Marketplace connects smaller merchants with customers.

With 50 million annual active consumers, Lazada has seen year-on-year growth in orders more than doubling in its past three quarters.

Empowering consumers and partners

Lazada 11.11 promotion at Tanjong Pagar MRT station. (PHOTO: Lazada)
Lazada 11.11 promotion at Tanjong Pagar MRT station. (PHOTO: Lazada)

Lazada’s growth has been fuelled by the rise in Southeast Asia’s e-commerce industry.

The region’s Internet economy is forecast to triple to US$300 billion in 2025 from US$100 billion in 2019, according to “e-Conomy SEA 2019”, a research report by Google, Temasek Holdings and Bain & Co.

“We have to expand the market. We are here to grow the market and the opportunities are very, very strong. It is not about getting a bigger share of the pie but making the pie bigger,” Poignant said.

Citing the same report, Poignant pointed out that e-commerce adoption in Southeast Asia is only at the beginning stage with a penetration rate of 3 to 4 per cent.

Given its leading market position, Lazada aims to transform the way people shop through the innovative use of technology, Poignant said.

“Our goal is to empower the local marketplace and empower the merchants to be on Lazada, using the Alibaba technology platform to empower SMEs across the region,” he said, adding that the number of active stores on Lazada had grown 142 per cent from March 2018 to Aug 2019.

Poignant said Lazada has one distinct advantage over the competition: an extensive logistics network across the region with Alibaba at its core.

Within this network, Lazada has more than 30 warehouses across 17 cities in Southeast Asia, with 200 delivery hubs and 7 sortation centres. About 75 per cent of order volume are sorted by Lazada’s facilities, and 70 per cent of parcels are delivered by the in-house delivery team.

Similarly, the upcoming 11.11 event is an opportunity to try innovative ideas such as the “Stamp Hunt” game, which involves consumers going to partners offline stores and scanning QR codes to earn rewards.

“We expect consumers to come to our app not just to find a good deal and go, we want them to engage with our sellers and partners,” Poignant said.

11.11 Shopping Festival

Jing Yin, Co-President, Lazada Group. (PHOTO: Yahoo Finance)
Jing Yin, Co-President, Lazada Group. (PHOTO: Yahoo Finance)

This year’s Singles Day will kick off on 1 November with daily activities such as group games and missions. Participants stand to win prizes and coins, which can be exchanged for vouchers. A total of 50 million vouchers will be up for grabs.

Jing Yin, co-president, at Lazada Group, said that shoppers in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam can choose from a record 80 million deals, of which a quarter will come with free shipping.

A new in-app game “LazCity Wonderland” will let consumers build and explore a virtual city of Lazmall brands with special brand vouchers.

On 4 November, each of the six markets’ top “Must-Buy List” will be featured on Lazada’s livestreamed gameshow “GUESS IT! King”.

Indonesia, Malaysia, the Philippines, Thailand and Vietnam will have its individual variety show, which will be livestreamed. The respective shows will also be broadcast on national TV in these markets except Vietnam.

One area of focus for this year’s event is on brands. Lazada will be launching sales of merchandise bearing its brand in Singapore. It will also be introducing Southeast Asian brands to Alibaba’s Tmall.

As part of the festivities, a 11.11 song has been composed and will be sung by four local celebrities in Thailand.

“When it comes to 11.11, we want to redefine the soul and shoppertainment of engagement with our consumers,” Yin said.

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