Apple launches on Lazada
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Apple fans around South East Asia can now get new iPhones, iPads, and Macbooks from an official store on Lazada.
Apple’s Lazada store opens in Indonesia, Thailand, the Philippines, Singapore, and Malaysia. Vietnam too will participate at an unconfirmed date.
Alibaba-owned Lazada will get stock directly from Apple, after forming an agreement with the Cupertino company. That makes it the only official online seller of Apple’s baubles in the region. Beats by Dr. Dre headphones and other accessories are also available.
Apple has a store in only one Southeast Asian nation: Singapore. That has created a niche for grey-marketeers to sell Apple’s gadgets – particularly iPhones – at inflated prices, with the ever-present risk of shoppers getting a counterfeit item.
The opening is a boost to Lazada’s efforts to get more major brands to set up storefronts on its site. It already has 3,000 brands, mixed in with 135,000 smaller merchants.
Earlier this year, when Retail in Asia met Duri Graziol, Director of Lazada Indonesia, and our discussion was about very well established brands and their way of targeting South East Asia.
Typically, brands explore different options, among others, creating their own .com., or going with a market place such as Lazada or Alibaba.
Duri’s views on those options were the following :
Creating your own .com
Iis more ambitious and it requires huge investments, which go beyond building the website. Brands can easily build an e-commerce website, but how to bring people to the website, this is the challenge.
Unless, you are selling something specific, which customers cannot find elsewhere, you are a small shop next to a shopping mall. Either people know your shop, or you will be basically just one in the thousands shops in the city, so on the internet.
“Alibaba-owned Lazada will get stock directly from Apple, after forming an agreement with the Cupertino company.”
When people look for products without having any preference or idea, they go to a mall, and if you are not in there, you will miss your chance. In an online environment, those people go to market places and search per category.
Going with a market place
Customers who go to Lazada for instance, do not search per brand, they search for category, and if you are not there, it is very hard to target those customers.
Additionally, a brand, which decides to open its own website will have to deal with high marketing costs to bring traffic to the website, with Lazada, those marketing costs are reduced as we work as a group. This is a massive advantage.
In the countries we serve, infrastructures are a huge obstacle. Indonesia, for instance, has thousands of islands, as well as Philippines, and you need to deal with that, 50% of our orders are done ourselves.
Another advantage of going with Lazada is the customer service management, which is internal for us makes it easier to reply to all questions regarding products, delivery, and logistics issues.
Furthermore, payment, in countries like Indonesia, present some difficulties. Credit card and online banking penetration are still low or COD remains the lion’s share of payment methods and this it has pushed us to develop a business model for it.
Cash on delivery is the solution for markets, in which trust is hard to build, and other payment services are not very well established.
Concisely, Lazada is not only a market place, Lazada means experience in managing the customer journey and the different stakeholders involved in it.
Apple is always looked at as a role model, so we are looking forward to the next giant brand to join Lazada.
Questions & Answers
Q.Which specific Southeast Asian countries are included in Apple's launch on Lazada?
Which specific Southeast Asian countries are included in Apple's launch on Lazada?
The new Apple store on Lazada is available in Indonesia, Thailand, the Philippines, Singapore, and Malaysia. Vietnam is also expected to participate at an unconfirmed future date.
Q.How will Lazada's agreement with Apple address concerns about counterfeit products in the region?
How will Lazada's agreement with Apple address concerns about counterfeit products in the region?
Lazada will receive stock directly from Apple, making it the only official online seller for Apple's products in the region. This aims to combat grey-market sales and the risk of shoppers receiving counterfeit items.
Q.What is Lazada's view on the challenges brands face when creating their own e-commerce websites?
What is Lazada's view on the challenges brands face when creating their own e-commerce websites?
Lazada believes creating an own .com requires huge investments beyond building the website, primarily for attracting traffic. Without specific, unique products, brands risk being lost among many others online.
Q.What payment method has Lazada developed to address local market conditions?
What payment method has Lazada developed to address local market conditions?
Lazada has developed a business model for Cash on Delivery (COD). This addresses the low penetration of credit cards and online banking in some countries, and helps build trust where other payment services are not established.
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