Analysis on opening a store on Lazada, the Southeast Asian version of Amazon

It is no exaggeration to say that Southeast Asia is the most attractive e-commerce market in Asia after China and India. For island countries, the most convenient way to shop is online shopping. Southeast Asia's economy is rising rapidly, and its huge consumption potential urgently needs the same level of supply capacity. According to statistics, China's online retail penetration rate is currently 7%, while Southeast Asia is only 1%, and it is rapidly copying China's e-commerce model. The implied demand gap is self-evident.

Who is Lazada ?

If you are already an old hand in the e-commerce industry, you will find that local e-commerce platforms (such as Taobao) have obvious local advantages. This is the case with Lazada (www.lazada.com), which was founded in Singapore in 2012 and is well versed in Southeast Asian conditions. It took only three years to become the largest e-commerce platform in Southeast Asia. Its current annual turnover has reached US$1 billion, with an average daily visit volume of 4 million and more than 15,000 merchants. In addition, e-commerce giant Amazon has not yet entered Southeast Asia, so Lazada is the only one that stands out. In 2015, Lazada's transaction volume soared, breaking US$1.3 billion in March alone, a year-on-year increase of 350%.

Which sellers are suitable for Lazada?

Many people say that Lazada is the Amazon of Southeast Asia. I think it is a combination of Amazon and Wish. All orders on Wish come from mobile apps, while Lazada is preparing for a rainy day and is currently developing both the computer and mobile terminals simultaneously. At the same time, Lazada's sales rules are very similar to Amazon. If you have experience in operating Amazon and Wish, I believe you can open a store on Lazada very conveniently and quickly. If you are a seller on AliExpress or eBay, you may need to change your operating ideas.

Lazada has 6 branches. Except for Vietnam, the other 5 countries are open to Chinese e-commerce. New sellers will first enter the Malaysian site. Based on the performance, Lazada will consider inviting them to open other sites. In addition, the e-commerce market in Southeast Asia is still in the development stage. Although Lazada claims that there are more than 15,000 sellers, I think the actual number of active sellers should be far less than this number, and there has not been much competition yet.

What are the conditions for opening a store on Lazada ?

Lazada's store opening requirements are not high. Since the official cooperation with Payoneer, the requirement of having a foreign currency public account has been cancelled. In other words, to open a Lazada store, a business license and a copy of the ID card are enough.

The required information is as follows: (After registering at Lazada, the Lazada investment manager will provide the following forms)

1. Registration form (the company and applicant names should be in Chinese and English, and the address should be in English);

2. New MP Seller Account Information form;

3. Business license of the company applying for the certificate, and a copy of the ID card of the applicant or legal representative;

4. Register a Payoneer business account with the same company name (register here)

Submit 1 registration form. After passing the review, the Lazada platform will send the online signing agreement and registration link to the email address submitted by the seller when applying. The seller can download the form for item 2, fill it out, and send it to the Lazada platform together with item 3.

Is it difficult to open a store on Lazada ?

The fact that you can engage in cross-border e-commerce means that you have already regarded difficulties and setbacks as nothing. My experience is that I have experience in opening stores on other platforms, so opening a store on Lazada is not a problem. I also learned that many people have complicated simple things and have gone through untold hardships to open a store. As a lesson from the past, everyone should communicate more with the investment manager. It is recommended that sellers prepare the information first and read the platform documents carefully and repeatedly (otherwise it will be very messy after opening the store). If everything goes well, these can be done within a week. The process you need to go through is roughly as follows:

How many orders can you get on Lazada ?

Lazada opened up to mainland China for investment in March this year. Some e-commerce sellers who smelled the business opportunity early on opened stores on Lazada by registering Hong Kong companies and have made a lot of money. I have seen big sellers who received 2,000 orders a day. I don’t have official detailed data, but I can say that Lazada is developing very fast, and the total order volume this year is expected to be 4 times that of last year. Whether you can get orders depends on many factors, such as product selection, number of SKUs, pricing, logistics, etc. You can only know this through your own operation experience. By the way, Lazada’s best-selling products are 3C and Fashion products.

Lazada Operation Experience

Advantages of Lazada

1. No arbitrary fines

Honestly, I don’t like the penalty policy of a certain platform. It may be due to the proportion of Chinese sellers and the product structure of the platform, but sometimes I get fined for no reason, which is an unpleasant experience. Lazada also has a penalty policy, but it is more of a way to punish buyers by reducing orders. For example, if the ratio or store health index exceeds the standard, half of the orders will be reduced in the next week. In addition, there are also penalty measures such as suspending the store and participating in training.

2. Will not accept returns from buyers at will

Lazada does a pretty good job of protecting sellers. It will only accept returns and refunds if the product is wrong, under-delivered, damaged, or not as described. And all orders that enter the seller's store have been verified by Lazada and can be shipped normally. At this time, Lazada has received the buyer's money, and the funds are guaranteed.

3. Timely payment

Lazada will regularly check the receipt record of the waybill tracking number on the logistics platform through the system and manual work. If the package shows that it has been delivered and the customer has signed for it, the order revenue will be credited to your Payoneer account next Friday. Note: Since July 1, 2015, Lazada and Payoneer have officially cooperated. Lazada's payment is directly credited to the Payoneer corporate account through API docking. This is automatic and arrives instantly and free of charge every Friday. Next, the seller only needs to withdraw the money to the public bank account or the company's legal representative or shareholder account.

4. QC control (product quality audit)

Lazada's product quality review is the most stringent platform QC I have ever seen. Except for the fashion category, all other categories require a 1:1 image size ratio, a white background, and no irrelevant content is allowed (items marked as hot items, new products, and free shipping will not pass the review), watermarks, reflections, multiple images, etc. are not allowed. In addition, those that may infringe on well-known brands will also be rejected from going online.

5. No need to communicate directly with users

Are you willing to accept the model of Taobao and AliExpress, spending a lot of time and hiring many customer service staff to chat with every customer endlessly? This would make me collapse. Lazada is much simpler. Customers place orders, sellers ship, and payment is made when the goods arrive. That's it.

【 Where Lazada needs to improve 】

1. High return costs

To get the returned product back from Lazada Hong Kong warehouse, you need to pay $10. Forget it, just destroy it for me.

2. Lack of powerful ERP software support

So far, there is no ERP software officially approved by Lazada, and the few that can be connected are not very powerful. If there are many orders, it is very inconvenient to handle them.

3. Logistics is too complicated

Lazada orders cannot be shipped through any channel you want. You have to use logistics approved by Lazada and apply for it. So, even if you have your own very cheap channel, but it is not Lazada's delivery channel, there is nothing you can do.