Lazada, the leading ecommerce platform in Southeast Asia, owned by Alibaba Group, plans to expand its cross-border trade for international brands.

Global Collection 2.0

One of the key initiatives announced was a revamped “Global Collection”, which is a dedicated channel to showcase  Lazada’s cross-border merchants from around the world. The platform aims to help the brands grow their businesses and achieve higher visibility among the Southeast Asian shoppers.

Global Collection 2.0 uses an algorithm-based search function to filter the product offerings and highlight the vendors for shoppers to find them easily. Shoppers would also receive their deliveries much faster and within seven working days from the time their placed their order if they choosese the standard shipping option.

From April, cross-border sellers interested in joining Lazada can submit applications in the self-service system, instead of getting an invitation from Lazada. Once the review is completed, they will become Lazada merchants.

Lazada's cross-border ecommerce business

First launched in 2013, Lazada’s cross-border business has grown to become one of the most diverse marketplaces. The sales have quadrupled over the past three years and, with the aim of boosting sales further in 2019, the company plans to identify and nurture the top 300 brands in each of the six countries that it operates in – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. 

The top five markets which cross-border sellers come from are Mainland China, Hong Kong, Korea, the US and Europe, with women’s fashion, home and living and kids’ fashion ranking among the most popular cross-border items.

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Indonesia’s largest online marketplace receives additional funds from Alibaba.

Funds used to extend its presence in the country

In its latest funding round, Indonesia’s online marketplace Tokopedia has successfully secured US$1.1bn from Alibaba Group Holding Ltd. as well as SoftBank Group Corp.

Recently, Tokopedia has been venturing into financial products such as digital wallets and virtual loans and credit cards. It is expected that the latest round of funding will accelerate developments in this area.

Lazada Indonesia, the other leading online marketplace in the country, is also majority owned by Alibaba. The latest moves by the Chinese ecommerce giant further strengthens its position in Indonesia

More about Tokopedia

Founded in 2009, Tokopedia provides a platform for many small and medium enterprises to extend their customer reach. It also connects businesses to logistics providers as well as large banks. It encourages consumer-to-consumer sales and has been referred to as the “Taobao of Indonesia”.

Through Tokopedia, shoppers gain access to more than four million merchants and a platform that delivers to more than 90% of the vast country. Shoppers are able to easily track their online purchases through the platform.

Click here for more information about the Indonesian market.

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Traditional stores go by many names: mom-and-pop stores, kiranas (India); warung (Indonesia); kedai runcit (Malaysia); sari-sari (Philippines). They include markets, street vendors and kiosks, and are a major feature of Asia’s grocery retail landscape. 

They’re also the specialist subject of Johann, one of our Singapore-based senior retail analysts. We asked Johann for his views on the traditional channel and the opportunities it presents for suppliers.

Q: How are traditional stores making themselves stand out? 

A: They’re known for providing the freshest produce. In fact, the traditional channel began when farmers’ markets started selling excess produce directly to consumers. Stores prepare products – like cheese – freshly every day or offer ranges shoppers can’t find elsewhere.

Offering personalised service is another way to be distinctive. Many traditional stores serve a small catchment area, so owners inevitably get to know their shoppers well. They can then offer advice, product recommendations and value-added services like free home delivery.

Q: What do shoppers like about the channel?

A: As well as the above, many shopkeepers are willing to sell loose products in smaller quantities. We’ve seen this flexibility across many product categories – rice, spices, dried goods, vegetables, biscuits, snacks. 

Shoppers can buy what they need, manage their spending and reduce wastage. It can also encourage them to sample a wider range of products. So, if you supply traditional stores, you should consider whether you can help provide this level of choice. 

Q: How does traditional trade compete with the rise of online shopping? 

A: It’s quick to recognise the benefits of modern innovations and adopt them to attract shoppers. In India, banks are giving traditional shopkeepers handheld payment devices that operate on a mobile network. In China, stores and even market vendors are increasingly accepting cashless payments by displaying a QR code. 

Traditional retailers are also improving their in-store environments. In Malaysia, we’ve seen stores with spacious, clutter-free aisles and attractive displays. Some stores in India have upgraded to include air-conditioning, bright lights and electronic tills.

Q: What’s the outlook for traditional trade in Asia?

A: Traditional trade forms 79-98% of the grocery market in Indonesia, India, the Philippines and Vietnam. We forecast that by 2022 it will still dominate these markets. 

However, the growth rate varies greatly across the region. We expect it to decline in Singapore and Japan over the next five years. 

Q: What’s the one thing suppliers need to know about the channel?

A: Traditional trade remains a vital part of Asia’s grocery retail market. You’ll need to continue investing in it, as it’s here to stay. 

Subscribers to IGD Asia can find more examples of best practice in traditional trade here. 

Asia’s FMCG market is the largest in the world, making it the number one growth opportunity for suppliers and retailers. We can help you trade successfully in Asian markets, and benefit from this growth, with our new IGD Asia service.
 

Groceries delivered directly to shoppers’ homes.

Making use of QR technology

JD Indonesia has launched a grocery delivery service that allows train commuters to shop for groceries whilst on the way home. JDVirtual, the new service, is now available at selected Commuter Line train stations in Jakarta.

Commuters can order food, beverages as well as other everyday groceries by scanning a QR code at these train stations. Designed to be fast and easy to use via the JD mobile app, these purchases will then be delivered to the shopper’s registered address.

Begun in 2008, the commuter line serves the greater Jakarta Metropolitan Area and sees an average daily ridership of more than one million passengers.

New shopping experiences

The launch of JDVirtual follows the opening of JD’s first unmanned store in Indonesia last month. If successful, similar virtual stores can be rolled out to airports, bus terminals and ship ports around Indonesia. JD.ID President Director, Zhang Li said, “we believe that with JDVirtual, a borderless shopping concept will provide a real solution for modern retail industry, while also helping to run our mandate to help bring Indonesia forward.”

Find out more about JD.com here.

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