Category: Logistics

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Logistics

Lazada Logistics Delivers End-to-End
eCommerce Logistics Solutions
in Southeast Asia

Lazada Logistics

Sept 16, 2021
By LazBeat staff

As part of its ongoing commitment to creating a strong and sustainable eCommerce ecosystem in Southeast Asia, Lazada Group last month announced the official rebranding of its logistics arm. The new Lazada Logistics division brings together what was previously known as Lazada eLogistics, which managed third-party providers, and Lazada Express, the company’s own parcel-delivery service, and also introduces multi-channel logistics services that allow for the fulfilment and delivery of orders across all eCommerce platforms.

The rebranded Lazada Logistics reflects the eCommerce platform’s efforts and commitment to create a one-stop end-to-end logistics solution for brands, sellers and other partners in a region that’s becoming an increasingly significant player in the global eCommerce boom, especially amid the coronavirus outbreak.

“In the current climate, consumers have grown accustomed to the convenience of a new shopping norm, and of having their purchases delivered to their doorstep – intact and on time. It is more important than ever that we continue to innovate and introduce new solutions that will help our merchants and eCommerce partners meet the growing demands and expectations of their customers,” Lazada Group Chief Logistics Officer Andy Huang said.

The consolidation of logistics resources and the rollout of multi-channel logistics services means that orders can be handled and dispatched via Lazada’s own fleet, third-party partners or channel-nominated fleets, creating greater flexibility for partners while also ensuring a better and more consistent customer experience.

“More and more, the services that Lazada offers are becoming essential services that people rely on, not just as a point of convenience but a point of must,” explained Lazada Thailand CLO James Marchant. “That really drives how we set up our business and how we look to service people,” he added.

WATCH: Introducing Lazada Logistics

Delivering Innovative Solutions

While upgrades to Lazada’s logistics operations have no doubt been accelerated by the pandemic, innovating new solutions in the management and flow of parcels has always been a core part of the company’s ethos, especially as eCommerce demand has grown exponentially throughout the years.

For example, Lazada Vietnam’s logistics lead, Thinh Vu, recalled how major changes were implemented following the explosive surge in customer orders during the 2017 12.12 mega campaign. “That experience made us change our strategy, to build up our capacity and scale,” he said, adding that, instead of resting on its laurels, Lazada has continued to challenge itself to maintain its position as the region’s eCommerce logistics pioneer.

“Our main mind-set is to always question ourselves on how we can be better, how we can serve our customers better. Everything is about improving service,” echoed Philippe Auberger, who heads logistics at Lazada Indonesia. The opening of multifunctional hubs and mini fulfilment centres as well as the decision to get some last-mile fleets to do first-mile pickups are just some recent examples of improvements made to operational agility and flexibility, Auberger said.

For Lazada Singapore CLO Gerald Glauerdt, the Lazada Logistics rebranding serves as a particularly meaningful milestone that shows just how much the company has invested in building up its logistics capabilities. When Lazada started out in 2012, orders were processed manually on Excel sheets and facilities left much to be desired (ask Glauerdt and he’ll recount tales of snake infestations and conniving landladies with a laugh). Now, the logistics division offers smart inventory and routing solutions powered by advanced technology, and its network spans over 400 state-of-the-art facilities, including warehouses, sortation centres and hubs.

“The market is developing very fast. For example, in 2012 or 2013, just the mere fact of getting something delivered and it appearing at your doorstep with a driver was already fantastic and a great customer experience. Obviously now, customers have evolved. And if it’s next-day delivery, it’s almost not good enough. People are requesting same-day deliveries, or two-hour deliveries. This evolution and constantly looking for new ways of doing transport and fulfilment will continue. And it’s very important that it never stops,” Glauerdt said.

Lazada’s state-of-the-art logistics warehouse.

Powered by the People

Aside from its cutting-edge technology, robust network and advanced supply chain infrastructure, Lazada Logistics is also a celebration of the resilience and dedication of the people who deliver the company’s first-in-class service.

“We have been evolving in our systems, we have been evolving in our processes, we have been trying to fine-tune and get our networks much better, but it’s always the people who continue to amaze me with how much they go way beyond in order to get the job done and to make our customers happy,” Lazada Malaysia’s logistics chief, Sunil Singh, said.

The professionalism of Lazada’s logistics personnel has seen them confront earthquakes, floods and, of course, COVID-19. During the height of the pandemic, logistics frontliners across the region continued to work tirelessly to ensure that the public could still access daily essentials from the safety of their homes. In the Philippines, some staff members even walked for kilometres to get to work when public transport was halted during lockdowns, said Lazada Philippines CLO Allan Ancheta.

“I am amazed and humbled at how our people just go above and beyond,” Ancheta said. “That to me is just amazing, and it epitomizes the spirit that we have at Lazada.”

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Inside Lazada Logistics

From the Front Lines:
Heroes Who Deliver

Lazada Yesota Kreshna Pillai

By Jeremy Ng Kok Shern
Jan. 18, 2021

Since the outbreak of the pandemic, many have had to hunker down at home, and those who handle logistics and delivery services have become so much more than their job descriptions. They are the new lifelines to communities across the globe as they ensure that daily essentials reach housebound consumers in a safe and timely manner.

Yesota Kreshna Pillai, 31, is a Lazada driver. She is one of these essential workers who has been on the front lines since Malaysia’s Movement Control Order (MCO) came into force last March. “When the pandemic first hit the country, I was extremely anxious, but I knew that it was my duty and my responsibility to those who rely on us for their daily essentials,” she recalled.

Yesota has been with Lazada for over a year and is the only woman among the delivery drivers at her designated fulfilment hub. Defying the odds, she has thrived in this labour-intensive line of work that often requires her to haul heavy packages and work a grueling schedule. She often has to travel long distances and cope with changeable and sometimes difficult weather and traffic conditions.

Even before the outbreak of the pandemic and the movement curbs, a typical day started for her at 7 a.m. and involved logging many kilometres to deliver an average of 120 packages a day. When the pandemic struck, demand for home deliveries skyrocketed and delivery workloads with added time pressures increased.

“I had to go through two roadblocks every day to reach the customers in my area, temperature checks at each neighborhood building and also location check-ins. In addition, the number of packages that I had to handle increased more than two-fold during the pandemic,” Yesota said.

Rajmahendran A/L Krishuan, her husband of nearly three years, said: “I’m very worried about her because she has to drive all day long and interact with multiple people in order to deliver the packages to customers.” He frets about the health risks frontliners like his wife face in serving the community. Such risks also take a psychological toll on workers and their loved ones, making each work day even more challenging.

“I know that my husband is always worried for me,” Yesota said. “We were open with each other and we talked about the safety precautions and SOPs that were set in order to protect those of us on duty, and that gave him comfort.”

Making health and safety its top priority, Lazada rolled out zero-contact deliveries when the pandemic hit and also implemented other protocols and standard operating procedures to safeguard the well-being of its customers and its frontline staff. Aside from being equipped with protective gear, all of Lazada’s warehouse logistics personnel and delivery teams undergo daily temperature checks and adhere to stringent sanitization processes.

Lazada logistics frontline workers
Lazada logistics frontline workers at a facility in Malaysia.

With Yesota so busy, Rajmahendran says he rarely gets to see his wife. “We don’t get to have dinner at night or spend time together during the weekends like we used to. But I understand because I know a lot of people depend on her and the essential service that she provides for the community,” he said. “I’m worried for her safety, but I am also very proud of my wife and I am also thankful to Lazada for putting in place strict measures to protect their frontliners.”

Despite their jobs’ challenges, frontliners like Yesota have remained steadfast in their dedication to serving the community, especially during the toughest of times. For these unsung heroes who travel far and wide, having their efforts recognised and appreciated goes a long way.

“There were instances where I was gifted with masks and bottled mineral water by customers,” Yesota said. “When I see the smiles on customers’ faces after receiving the packages I delivered to them, for me, it makes my job worth it.”

Jeremy Ng is an associate in Lazada Malaysia’s public relations team.

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Business & Commerce Inside Lazada Logistics

Lazada Group CEO:
Building the Future of Digital Commerce
in Southeast Asia

By LazBeat Staff
Oct. 15, 2020

In the monograph on his book, Good to Great, author Jim Collins pointed out that the “big thing” for a truly great company is neither a single innovation nor one grand plan. Instead, it’s the underlying flywheel architecture, properly conceived, built over time, slowly gaining momentum, and eventually breaking through.

At Alibaba’s Investor Day on September 28, Lazada Group’s chief executive officer Li Chun cited this flywheel concept as a way of reiterating the company’s long-term strategy of building a healthy sustainable business by investing in technology infrastructure and logistics capabilities.

As Alibaba’s flagship platform in Southeast Asia, Lazada wields the competitive advantage of tapping into two decades of experience and cutting-edge technology from the world’s most successful eCommerce player. What matters most, Li said, is creating real value for consumers, brands and sellers across the region as the company builds to last.

Lazada Group CEO Li Chun in Singapore, sharing the stage in Hangzhou virtually with other Alibaba executives, including executive vice chairman Joe Tsai and chief financial officer Maggie Wu, both broadcasting remotely from Hong Kong.

Some key highlights from Investor Day:

Strong sustainable growth momentum in the past year

With a culturally diverse population of more than 650 million and a rapidly digitalising economy, Southeast Asia is fertile ground for eCommerce. During the COVID-19 pandemic, digital adoption surged in the region; brands and sellers raced to onboard Lazada’s platform at an unprecedented pace. In the 12 months ended July, Lazada had more than 80 million annual active consumers, and active monthly users topped 100 million in July. Year on year, its quarterly order volume has doubled for the past three years.

Moreover, key performance metrics illustrate strong growth momentum. With the time that users spend on the Lazada app and purchase frequency increasing year-on-year by 20 per cent, the platform is demonstrating that it is enabling businesses to grow. The number of sellers generating more than USD 5,000 a month in sales has more than doubled. Gross merchandise value growth year-on-year per marketing dollar is 90 per cent, reflecting how smart algorithms are enabling an effective marketing model and achieving scalable efficiencies.

“As a result of our data-driven approach, only a small proportion of our overall gross merchandise volume (GMV) is driven by subsidies,” Li said. “Minimal marginal costs mean our business model is both scalable and sustainable. Strong fundamentals, dedication and a customer-first mindset, all contributed to Lazada being a quality platform, with both quality users and supply.” 

The Tech Advantage

When Li joined Lazada in 2017, his first priority was to transform its product and technology architecture, cognizant that it would be the main engine of the company’s growth. Since then, Lazada has, among other things, revamped its core eCommerce platform, consumer app, seller centre, as well as its AI and recommendations engine. Lazada’s tech architecture is key to improving the experience of users, partners, sellers and brands.

Notable examples include how Lazada’s artificial intelligence technology effectively matches the right products to the right consumers at the right price point, while its proprietary operating data dashboard provides sellers and brands with real-time, actionable insights on buyers’ preferences and business performance, allowing them to react smart and pivot quickly. Lazada Sponsored Solutions, launched earlier this year, further equip merchants with a suite of marketing tools, from on-site ads to offsite affiliate marketing, to better reach potential customers.

The Logistics Differentiator

Logistics is critical to the eCommerce value chain, especially in Southeast Asia with its geographical vastness and diversity. Lazada has the region’s largest, most intelligent integrated logistics and supply chain network for eCommerce. Today, its network across these six countries includes fulfilment centres sited on more than 300,000 sqm of land, over 15 sortation centres, and close to 400 pick-up and delivery hubs. All these are powered by a data-driven, smart routing algorithm, enabling the company to meet the surging demand of Southeast Asia’s flourishing eCommerce industry. More than 85 per cent of total parcels delivered are now sorted by Lazada’s proprietary network.

With e-logistics still in its early days in Southeast Asia, Lazada is just only starting to see how smart logistics and network control can empower businesses and give customers a better shopping experience. Logistics is a game of scale – the wider the network, the more cost efficiencies can be achieved through network synergies, and the better the experience for customers.

The Commitment to Southeast Asia

Li concluded his presentation by declaring the commitment of Lazada’s financial, people and technology resources to the region. Execution and innovation are of the utmost importance.

Lazada is fully backed by Alibaba Group, whose vision is to be a company that lasts for 102 years, with Southeast Asia being a the key pillar of its globalisation strategy.

“We are playing the long game,” he said. “This is not a fight over the next four or eight quarters. It’s a battle spanning the next three, five and even eight years. We are here to stay.”

Lazada Group CEO Li Chun broadcasting remotely from the Singapore office during Investor Day.