By Mao Ying
Oct. 14, 2021
Many consumers and merchants these days are no stranger to online shopping, but few are familiar with how digital platforms actually work and process millions of transactions in just a blink of an eye.
For those curious about the behind-the-scenes operations of eCommerce platforms, Lazada held its first-ever Tech Open Day (TOD) on July 31, 2021, to encourage communication among industry professionals and eCommerce tech lovers in China. The virtual event, which has so far garnered over 27,000 views online, focused on engineering technology in the morning and algorithm application in the afternoon. More than 10 speakers from Lazada’s tech team shared best practices and intimate knowledge on topics ranging from user growth to advertising algorithms and eCommerce campaigns.
During the event, Lazada’s tech team showcased how technological innovation is achieved in the context of Southeast Asia’s diverse and segmented eCommerce market. Over the years, Lazada has been investing heavily in new technology, and its product and technology architecture have been key to the company’s long-term development.
“At Lazada, we are investing for long-term, sustainable growth. Our infrastructural robustness and scalability will continue to pay dividends as we innovate and forge ahead into the future,” said Lazada Group chief executive officer Chun Li.
Three Stages of Technological Evolution
According to Howard Wang, Lazada’s chief technology officer, the company went through three stages of technology evolution.
The first stage began when Lazada was born in 2012, when the eCommerce market in Southeast Asia was still at a nascent stage. The team took a pragmatic approach to adapt whatever technologies that worked to support the platform’s rapid growth in market share.
As Lazada expanded, challenges to the platform’s technology system scalability and stability surfaced. As part of Alibaba Group’s ongoing investments into the company, Lazada’s technology architecture and infrastructure was re-platformed in 2018 and its core eCommerce platform was revamped, signalling a technology leap to the second stage of faster operations and innovation.
During this second stage, merchants and consumers saw a marked improvement to Lazada’s online capabilities. Many, in particular, were impressed with the much smoother experience of mega campaigns.
“We were lucky to be able to quickly upgrade our technologies, which has since become one of the platform’s key competitive advantages,” Wang said. “The upgrade enabled much higher scalability, stability and robustness of our technology system. We have since seen remarkable growth in multiple areas, evidenced by the launch of an array of new initiatives to enhance both merchants’ and consumers’ experience.”
The second stage also saw Lazada become the pioneer of eCommerce Shoppertainment in Southeast Asia. Tapping into Alibaba’s 20-plus years of knowledge and experience, Lazada started in 2019 to roll out features such as in-app livestreaming and interactive games.
Finally, the third stage of development kicked off in 2020 and focused on further localising Lazada’s technology to address the diversified needs of users in Southeast Asia and to ultimately empower greater business growth. Despite the pandemic, Lazada successfully launched a new logistics platform with Project Apollo, which allows the company to centralise its network and data management, better allocate and control routes, and more effectively manage costs.
The successful launch of Project Apollo demonstrated the strong ability of Lazada’s tech team to quickly innovate and adapt to pandemic-era challenges. Driven by Michael Lang, who leads Lazada’s logistics technology team, the project was carried out as a collaborative effort between around 500 staff across multiple locations in Southeast Asia and China. The system completed five rounds of testing and was put into use within three months.
Lazada’s third stage of tech innovation also highlighted the key role that artificial intelligence plays in the company’s digital infrastructure. Based on a deep understanding of user behaviour gleaned through machine learning, AI technology helps enhance the core efficiency of eCommerce by accurately meeting various segmented consumer needs. Alibaba’s industry-leading AI platform also powers Lazada’s search and recommendation engines as well as its advertisement products. As such, product page views supported by Lazada’s search and recommendation engines have increased by more than 100% year over year from 2018 to 2020, and the company’s buyer conversion rate has seen a year-over-year uplift of over 20%. Lazada also opened a new technology centre in Beijing in July. The centre focuses on R&D and AI technology application in eCommerce and specialises in algorithm engineering, product, user growth, search and recommendation among other areas.
Constant Innovation, Constant Growth
Thanks to these breakthroughs, in the past year alone, Lazada has grown its annual active consumer base to 110 million and monthly active user count to 150 million. The technological advancement has also resulted in a significant uplift in logistics efficiency.
Currently, Lazada’s AI team consists of around 200 algorithm engineers in Singapore, Shenzhen, Beijing and Hangzhou. Committed to constant innovation, the AI team is building out a new advertising system, Phoenix, that features OneBP – a unified business platform – and OneEngine, a unified online advertising engine. The system is supported by an intelligent operations platform and a data feedback platform to ensure higher operations and data-processing efficiency. It also provides Lazada’s brand partners and sellers with easier access to more diversified advertising products and marketing solutions and enables their products to be better matched with their target consumers.
Lazada’s continuous investments in technology has been its key competitive advantage, putting it miles ahead of competitors in terms of system stability, seller and brand enablement as well as customer satisfaction. With this technology architecture and strong infrastructural foundation built up over the years, Lazada has become not just a digital marketplace but a platform that empowers both businesses and consumers.
To watch the replay of Lazada’s inaugural Tech Open Day (in Chinese only), please click: https://live.infoq.cn/room/998
Mao Ying was a senior manager with Lazada’s regional communications team.