22:37 (GMT +7) - Friday 16/11/2018

Business

Lazada to support e-commerce SMEs to 2030

Released at: 16:39, 05/11/2018

Lazada to support e-commerce SMEs to 2030

Photo: Khanh Chi (VET)

E-commerce platform commits to sustainable e-commerce ecosystems in Southeast Asia for the long term.

by Hong Nhung

The Lazada Group has pledged to support 8 million e-commerce entrepreneurs and small and medium-sized enterprises (SMEs) in Southeast Asia to grow and thrive by 2030. The company also announced its commitment to creating a healthy and sustainable e-commerce ecosystem in the region and to champion opportunities in technology and logistics infrastructure to benefit its ecosystem of sellers, consumers, and local communities.

As part of the pledge, Lazada will provide support for SMEs to digitize their business and gain better access to internet-savvy and mobile consumers, reduce the barriers to entry for sellers to create their own brands on Lazada, and allow them to tap into the company’s logistics network to facilitate the transfer of goods.

“In the era of robust digital transformation, we look forward to leading our ecosystem, backed by our regional know-how and local capabilities,” Mr. Zhang YiXing, CEO of Lazada Vietnam, told an event held in Ho Chi Minh recently to discuss the state of e-commerce in Southeast Asia in general and Vietnam in particular.

“For e-commerce, infrastructure and innovation are the backbone and require serious investment to create the best customer experience and help sellers build their own brands on Lazada. That’s the focus we are working towards.”

Building entrepreneurs into successful businesses in the digital economy

An area of concern that came under the spotlight was the struggle among SMEs to adopt digital technology and gain access to local consumers. To help businesses reach more customers, Lazada has developed incentives, comprehensive tools, and dedicated training that enable merchants of all sizes to attract, engage, and convert more consumers into sales.

“E-commerce in Vietnam has been growing significantly in the past decade, and there is still large room for it to become a daily habit among local consumers,” Mr. Zhang said. “Hence, we see the role of e-commerce players like us as being a strategic partner to sellers who are serious about their professional and business growth. Certainly, their success will boost the ecosystem.”

Talking about cross-border trade as another challenge, Mr. Simon Baptist, Global Chief Economist and Managing Director of the Economic Intelligence Unit (EIU) in Asia, said: “Vietnam will be one of the region’s fastest-growing economies, with real growth remaining strong in 2019-23. The country is expected to increase its middle-class households by 18 million to 2030, of which more than 30 per cent of the increase is projected to come from Hanoi and Ho Chi Minh City.”

“However, there are still challenges for SMEs due to a lack of access to financial and support services as well as a wider need to build trust in the e-commerce and e-payments ecosystem among consumers.”

Supporting digital consumer growth with improved infrastructure

Faced with limited fulfilment players, a small and fragmented transportation sector, as well as vastly different infrastructure landscapes, logistics remains a huge challenge for both big and small e-commerce players across Southeast Asia.

“Our research shows that logistics is a challenge, though improving, but Vietnam’s infrastructure is poor and overland transport remains expensive,” Mr. Baptist said. “Road networks, as well as retail and distribution networks, came up as higher-risk areas for e-commerce firms.”

On the customer experience, panelists identified data and technology as the two key factors that will dynamically evolve the experience for online shoppers, due to Southeast Asia’s heterogeneity. E-commerce businesses that can leverage data to navigate specific local consumer tastes and direct consumers to take desired actions are well poised to succeed.

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