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Lazada Indonesia: JP Morgan Investment Won't Change Our Management System


Just recently, we got confirmation that JP Morgan has made an investment in Rocket Internet’s Asia-oriented e-commerce site Lazada. It’s natural for readers to be curious what changes are in store for both the customers and the whole Lazada team in Southeast Asia after such a major investment (it’s rumored to exceed $50 million). To answer that question, we talked to Magnus Ekbom, Lazada Indonesia's managing director, and Rizki Suluh Adi, the VP of marketing and business development.

So what will life be like with JP Morgan? Magnus said that there will be no changes for either the customers or Lazada’s operations - but he did tease some major new developments during the course of our chat. Magnus added that though JP Morgan comes from a very different perspective, the bankers share Lazada’s very optimistic view of the Southeast Asian market.

Lazada Indonesia has grown insanely fast since its launch at the end of March. Magnus explained that the first month they were busy setting up infrastructure like customer service, the supply chain, and other operational activities including building the warehouse and distribution capacity. From then on, Lazada entered the “growth expansion phase” in June; that’s where the team starts to aim for growth. Magnus adds:

If that [the infrastructure system] is not in place and you start to grow - [it’s a] disaster! We can’t let that happen. So first, build operation capacity, then grow, and now we’re in the growth phase.

Magnus explains that they are very proud of the statistics that they have - but for one or two reasons which involve the company’s investors, they can’t share any of those numbers.

Lazada Working Culture

When asked about the departure of Susie Sugden, the previous managing director of Lazada Indonesia, Magnus played down the news. He said that it’s natural for people to come and go in any companies in the world, and tech blogs, he says, are making a lot of fuss about it. Sometimes people leave for different reasons, maybe for family reasons, reckons Magnus.

Regarding the management culture at Lazada, Magnus then added that the company values its 200 employees very highly. He wants to make a culture where they recognize the hard working people there. He also sees the Lazada office not only as a place to race, but for people to come and be energized. Magnus said, “Our staff is the most valuable thing we have.”

Magnus shared that to make its employees feel valued, the company must be transparent to them. It is about having one team working together in the same direction. He also encourages the employees to take on responsibilities by giving them authority and chances to grow. He believes that if people feel challenged, then they will grow and perform better. He added:

We believe so much in people capacity, and we think that many big established companies don’t give people the chance. They could get more if they give people the chance.

Rizki added that employees have a lot of freedom there, including freedom to make mistakes. Lazada employees are encouraged to talk and learn from people across the globe inside the global Rocket network. Magnus said that for every single thing that his company plans to do, there must be someone in the network that has done it before, or has screwed up in that area. Everybody is pushed to work together.

Does that apply to the whole of Lazada in Southeast Asia? Magnus said that the Rocket spirit, which for him means that absolutely anything is possible, is present in all Lazada’s branches.

The Future and The Warehouse

When asked about Lazada’s strengths compared to other e-commerce companies in the country, Magnus said that his competition isn’t with the other companies, but about winning the trust of his customers. Of course, Lazada is not the first to tackle this issue of taking commerce online, and we’ve heard the same theme of consumer trust from the co-founder of rival Tokobagus

He believes that one day, there will be a blur between the online and offline stores as they will have the same paying customers. In the end, it will be about creating great customer satisfaction, both online and offline.

In the meantime, Rizki said that one of the secrets to Lazada’s exponential growth is its partnerships with global giants. In the near future, Lazada will announce a partnership with one of the largest banks in Indonesia. The VP then explained that the big aim is to cater to the country’s mobile commerce market.

Interestingly, both Magnus and Rizki seemed very proud of the company’s “gorgeous” warehouse. Magnus believes that the company has one heart and one brain; the heart would be the customer service, and the brain is the warehouse. He said that it’s super cool watching the steps involved in the fulfillment process at the warehouse when an order is submitted. Rizki joked, “There’s lots of the little robots flying around.”

You can check out the warehouse pictures here and here.

[Picture sources: Saida Online and We Heart It]