Lazada

Lazada Group is a Southeast Asian e-commerce company founded by Rocket Internet in

2012, and owned by Alibaba Group. In 2014, Lazada Group operated sites in Indonesia,
Malaysia, Philippines, Singapore, Thailand, and Vietnam and had raised approximately
US$647 million over several investment rounds from its investors such as Tesco,
Temasek Holdings, Summit Partners, JPMorgan Chase, Investment AB Kinnevik and
Rocket Internet.

Its sites launched in March 2012, with a business model of selling inventory to customers
from its own warehouses. In 2013 it added a marketplace model that allowed third-party
retailers to sell their products through Lazada's site; the marketplace accounted for 65%
of its sales by the end of 2014.

In April 2016, Alibaba Group bought controlling stake in Lazada to support Alibaba's
expansion plans in Southeast Asia.[3]

In August 2018, Lazada is the largest e-commerce operator in Malaysia, Vietnam,

Thailand and the Philippines, based on average monthly web visits.[4]

History

Lazada warehouse in Cabuyao, Laguna, Philippines during the company's 11.11 sale
promotion in 2018.
Lazada Group was founded in 2012 by Rocket Internet in Singapore with the intention of
establishing the Amazon.com business model in Southeast Asia to take advantage of the
nascent online consumer market and Amazon's weak presence there;[5][6] Rocket is a
German incubator that builds companies that copy the business models of successful US
tech companies in emerging markets.[5][7] Lazada's e-commerce websites soft launched
in 2012 in Indonesia, Malaysia, the Philippines, Thailand and Vietnam.[8] It raised four
rounds of funding in 2012 and early 2013: JP Morgan invested an undisclosed amount in
September, Swedish retailer Kinnevik invested $40 million in November, German private
equity firm Summit Partners invested $26 million in December, and Tengelmann invested
about $20 million in January 2013.[9] It also added a 2-day guaranteed delivery services,
addressing one of the most common complaints about Lazada's service,[9] and one of its
biggest challenges, which it had attempted to address by making a "massive, incalculable
investment" in warehouses and delivery services.[10]

In June 2013, Lazada announced it had raised an additional $100 million, and it launched
mobile applications for Android and iOS devices.[11] In December 2013, it raised an
additional $250 million from Tesco PLC, Access Industries, and other existing
investors.[12]

In May 2014, Lazada launched in Singapore, its sixth country.[13]

In November 2014, Temasek Holdings in Singapore led a funding round of $250 million,
bringing the total Lazada had raised to approximately $647 million.[14] Also that month,
Lazada announced that its marketplace platform accounted for more than 65% of its
overall sales,[15] and that the number of third-party sellers on the platform had increased
from ~500 in November 2013, to close to 10,000 in December 2014.[16][17] The number
of employees across the region reached approximately 4,000.[17]

For 2014, Lazada's net operating losses were $152.5 million on net revenues of $154.3
million.[18] However, its percentage of losses relative to its Gross Merchandise Volume -
the value of all the products sold through the site - was smaller in 2014 than in 2013 due
to growth in its GMV from $95 million in 2013 to $384 million in 2014, driven by
marketplace sales.[18][19]

In 2015, Lazada's challenges for growth were the preference for brick and mortar
shopping among customers, with just about 1% of people buying online compared to 10%
of US shoppers; the lack of credit cards and concomitant requirement to arrange cash on
delivery systems, reliable delivery especially in rural regions, and the threat of competition
from Amazon and Alibaba.[20]
In March 2016, Lazada claimed it recorded a total of $1.36 billion in annual GMV across
its six markets in Asia, making it the largest e-commerce player.[21]

In April 2016, Alibaba Group announced that it intended to acquire a controlling interest
in Lazada by paying $500 million for new shares and buying $500M worth of shares from
existing investors.[22] The British supermarket company Tesco confirmed the sale of
8.6% of its holding in Lazada to Alibaba for $129 million.[23] The reasons why Alibaba
was interested are: South-East Asia market has growing middle class income populations
estimated 190 million people in the region with a disposable income of $16-$100 a day to
grow to 400 million people in 2020,[24]

In June 2017, Alibaba Group increased its investment in Lazada by an additional $1

billion, raising its stake from 51% to 83%.[25] Alibaba invested another $2 billion into
Lazada in March 2018, and replaced Lazada's CEO with Alibaba executive Lucy
Peng.[26]

In December 2018, Peng was replaced by Pierre Poignant as CEO of Lazada, with Peng
taking the role of executive chairwoman.[27]