E-retailer Zalora bets big on Southeast Asia

1 min readJan 20, 20151:35 AM

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Asian fashion e-commerce start-up Zalora aims to become a multi-billion dollar company, and according to managing director Michele Ferrario, Southeast Asia’s burgeoning market holds the key to achieving that goal.

“Singapore is well-served in terms of online and offline retail, but when you think about smaller towns in Indonesia, the Philippines, Vietnam and Thailand, people there do not have the same access to fashion as people in developed markets,” he told CNBC’s “Managing Asia.”

Home to more than 600 million consumers, the region’s internet retail market is at an “inflection point,” according to a UBS report published last June. Analysts estimate online spending across Southeast Asia is poised to hit USD35 billion by 2020, on the back of high internet penetration and widespread smartphone usage.

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What this means

Zalora's focus on underserved Southeast Asian markets is a shrewd move, positioning them for significant growth in a region ripe for e-commerce expansion. Unlike Tiffany's targeted luxury expansion in Singapore or Panpuri's broader Asian store rollout, Zalora is pursuing a scale play, directly pressuring regional fashion retailers in less developed areas. The primary risk lies in logistical complexities and localised competition across diverse, sprawling geographies. Their success hinges on effectively replicating their online model in these new, challenging environments, where consumer habits and infrastructure vary significantly. We will be tracking their market share figures in Indonesia, the Philippines, Vietnam, and Thailand by year-end 2020.

Rajiv Menon · Retail News Asia newsroom

Questions & Answers

What is Zalora's main ambition for its future growth?

Zalora, an Asian fashion e-commerce start-up, aims to become a multi-billion dollar company. Its managing director believes Southeast Asia's burgeoning market is key to achieving this significant financial goal in the e-tailing sector.

Which specific countries does Zalora identify as having underserved fashion markets?

Zalora specifically identifies smaller towns in Indonesia, the Philippines, Vietnam, and Thailand as regions where people lack the same access to fashion as those in more developed markets. This contrasts with well-served places like Singapore.

What is the projected value of online spending in Southeast Asia by 2020?

Analysts estimate that online spending across Southeast Asia is poised to reach USD35 billion by 2020. This growth is attributed to high internet penetration and widespread smartphone usage across the region, according to a UBS report.

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