Lazada (Alibaba) pushes luxury in South East Asia

Project that wins is not changed, but exported. This concept well describes what drove Lazada, a leading ecommerce player in South East Asia, to launch last June LazMall Luxury, a platform dedicated to luxury brands present in six countries (Singapore, Malaysia, Indonesia, Philippines, Thailand and Vietnam) to intercept the desires of a middle class that is increasing its purchasing power. Where digital penetration exceeds 70% and where luxury brands can 'seed', increasing brand awareness as well as sales.

A scenario, that of the economic empowerment of highly digitised young people, which is reminiscent of what happened years ago in China: the People's Republic today is a market undergoing a transformation, but in the pre-Covid decade it established itself as a key basin for luxury also in the digital channel, so much so that in 2017 Tmall had launched its Luxury Pavilion, giving great space to made in Italy. Lazada, founded in 2012 but since 2016 in the orbit of ecommerce giant Alibaba itself, has taken it as a model with its project, which comes on the heels of the launch of LazMall in 2018: "Our reference model was the Tmall Luxury Pavilion," explained Lazada's chief business officer Jason Chen, in Milan to present the platform to 100 Italian brands, in synergy with Adiacent, "but in the case of LazMall Luxury we decided, since fashion is an area in which we believe there will be a boom in South-East Asia, to do even better: we thought of starting not from the base of the pyramid but from the top and therefore from the luxury brands, with a top-down strategy. In Milan, I was able to meet with representatives of high-end brands such as Moncler, Dolce&Gabbana and Armani, and they all seemed interested in a presence in South East Asia'. Starting with a portfolio of the 'right' brands, with a cascading effect that will bring premium and even niche fashion brands onto the platform from luxury, is one of the strategic pillars for Lazada, which currently already has a successful track record with beauty products, which overall are the second best-selling product category behind electronics, and has made a mix of logistics and technology its asset: "We wanted to differentiate ourselves from our competitors both in terms of suppliers and shopping experience, including through logistics, and thus the speed of product delivery for example, and then the use of technology, including artificial intelligence."

The ambition is clear: to become the first destination for luxury and premium shoppers in South-East Asia with the goal of reaching 300 million customers by 2030. The fact that the reference area is made up of markets that differ in terms of development, rules and even language, makes it all the more complex, especially in the eyes of brands that want to approach the area: "There are six different markets," continues Chen, "but we work by dividing them into different groups: the first is made up of Singapore, Malaysia, the Philippines and Thailand, where we can use the same strategies in terms of price, logistics, user experience because they also share regulations, while Vietnam and Indonesia must be approached individually. However, all six markets have in common a middle class of young people who are highly educated, have international experience and earn more and more". Young people also have to be won over through social media, where the power of key opinion leaders, so important in China, is growing: 'They use TikTok a lot,' Chen explains, 'but also Instagram, Facebook and YouTube.