| June 20
June 20 Lazada, the Southeast Asian online
retail company founded by Germany's Rocket Internet Gmbh, has
secured another $100 million from investors in its bid to lift
the region from its status as an e-commerce backwater.
While online shopping is big in Europe, the United States
and even in China, where it is likely to account for 6 percent
of all retail business this year, Southeast Asians still prefer
to do 99 percent of their shopping offline, the company
Lazada, which operates in Indonesia, Malaysia, the
Philippines, Thailand and Vietnam, hopes to change that.
"We see the same positive trends across the region," said
Singapore-based Lazada CEO Maximilian Bittner. "What a country
like Vietnam or Indonesia may not have in GDP they make up for
in enthusiasm for online."
On Thursday it announced that it had secured $100 million in
funding from existing investors Holtzbrinck Ventures, Kinnevik
Investment AB, Summit Partners and Tengelmann Group, as well as
new investor Verlinvest, a Belgian family-owned investment
holding company. It was Lazada's largest single round of funding
He declined to give details about how the round, which
follows smaller injections earlier this year and late last year,
would affect Rocket's stake in the company.
Berlin-based Rocket Internet has launched multiple
e-commerce websites in the past few years, most of them in
They include Africa's Zando and Jumia, Zalando in Europe and
Dafiti in Brazil. Earlier this month Lamoda, a Russian version
of Zalando, secured $130 million in a funding round that
included Summit Partners and Tengelmann.
Lazada was launched in early 2012 offering consumer
electronics, household goods, toys and sports equipment to
emerging markets in Southeast Asia.
CHALLENGE FROM AMAZON
Bittner said the funds would partly be used for improving
logistics and the group's supply chain. "We're still in the
pioneering phase. The key for us is to improve our service level
Indeed, Lazada has its critics. Bernard Leong, a
Singapore-based founder of regional news site SGE.io who has
followed Rocket's activities in Southeast Asia, said that Lazada
had been spending heavily on advertising, and was experiencing
problems in maintaining quality of customer service across the
"If the funding helps to resolve their operations such as
customer service, they are on track to be the largest players in
the region," he said.
Bittner declined to give concrete figures, but said that
gross merchandise value, the total value of goods sold over a
given period, had last month hit the "three digit millions" of
Lazada's biggest competitors are mostly local players but it
is likely to face a significant challenge from Amazon.com Inc
, which has stepped up its activities in the region.
Earlier this month Amazon announced it would ship some items
from the United States to Singapore and India for free. Amazon
offered similar services in Europe in late 2010.
But Bittner said that things were moving quickly. In the
past year, he said, the group had overcome logistical challenges
to ship about 90 percent of packages across the region on the
same day, and get 85 percent of those orders in metropolitan
areas delivered by the next day.
While e-commerce has been hampered by a lack of options for
consumers to pay for the goods online - less than 10 percent of
Lazada transactions in Vietnam were done by credit card,
compared with about half in Malaysia - consumers in Southeast
Asia have readily adapted to new technologies, in particular
mobile, Bittner said.
He said that a mobile application launched 10 days ago
already accounted for 10 percent of transaction volume. "It
shows how incredibly Internet savvy and open to these things
Southeast Asia is," he said.
(Reporting by Jeremy Wagstaff; Editing by Chris Gallagher)