Why is Lazada the gold standard for m-commerce in Southeast Asia?

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Ecommerce transactions on mobile are yet to fully take off in Southeast Asia. Online retail giant Lazada stands out because its mobile app is intuitive and boasts strong customer service.

Currently, retail ecommerce sales across Southeast Asia make up a very small percentage of overall sales compared to other players in the region, such as China.

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Transactions on mobile are even smaller. Despite a strong mobile-first (and in some cases, mobile only) population, Southeast Asia’s mobile commerce landscape is still challenged by access to high-speed wireless broadband internet and affordable smartphones, especially for non-urbanized regions.

What’s important to note, is that while mobile commerce share remains small in Southeast Asia, it’s a channel to watch. Industry experts in Thailand cited mobile commerce as a key trend for the region during an ecommerce panel at last year’s ClickZ Live Bangkok event.

Research from Criteo shows mcommerce made up an average of 25% of total ecommerce transactions in the fourth quarter 2015 for retailers in India, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. The top 25% of retailers with the highest number of mobile transactions averaged 39% of all online purchases.

Mobile also plays an important role in the research stage of the purchase journey. For a country like Thailand, it is on par with desktop.

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Platforms having the most success in mobile commerce in this region haven’t just developed great user interfaces, but have the service to follow through, says Madan Sanglikar, co-founder and managing director, Indonesia, Affle.

He says the quality of mobile apps in the region have improved significantly with Lazada (the ‘Amazon’ of Asia) leading the way.

Lazada and Zalora

Founded in Singapore in 2011 by Rocket Internet, Lazada is the region’s biggest ecommerce platform. It operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

“Amazon was slow and Lazada took the market edge,” says Sanglikar. As a mobile commerce model, Lazada’s success pivots on its ability to integrate all aspects of the online purchase, from the website, the app, the back-end development, to training staff, he says.

“Everything is integrated – from the booking, the tracking, the delivery – it’s the whole service, and this app is just the window to that service,” Sanglikar adds.

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Zalora, another Rocket Internet investment that specialises in apparel also stands out. While it is similar to Lazada it is more stylish and inviting to use.

Go-Jek

Go-Jek, Indonesia’s ‘Uber’ for taxi motorbikes, is another good example of a user friendly app that can base its success on listening to customer needs and evolving around that.

Jakarta is notorious for heavy traffic and motorbike taxis are a common way to get around. However, the bikes can be unreliable, have no fixed rates, and carry dirty helmets. Go-Jek has changed all of that. It offers Indonesians a fast, reliable taxi service that includes transparent payment, clean helmets and insurance.

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It has now gone beyond transport, to include grocery, food delivery, concierge and on-demand massage services.

Go-Jek has also tapped into Indonesia’s small business and C2C culture, offering courier services.

And it is all done through the one app.

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“They’ve identified the consumer’s needs and they haven’t stopped at travel,” says Sanglikar.

Go-Jek pride’s itself on being Jakarta’s personal time-saver.

“We are an all-in-one convenience service: Your driver, your courier, and your personal shopper. You name it, we’ll do it, INSTANTLY!” it states on its website.

Similar to Uber, the app notifies the user at every step of the journey.

From when the driver will arrive, when an item has been picked or when has been delivered. Drivers can be tracked and called if they need further instructions. Pricing is pre-calculated.

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Zomato

Zomato started in India as a food directory, providing information on costs and recommendations, but is now available in more than 20 countries.

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It has since moved into online orders and has integrated a partnership with Uber allowing users to book a driver to their chosen restaurant.

It means the user stays within the one app to search, find and book a restaurant as well as being able to order an Uber car to drive them to their reservation.

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Key Takeaways

1. Intuitive flow and design

What makes the user experience so good with apps like Lazada? “Intuitive flow is critical,” says Harprem Doowa, founder and managing director, Frank.co.th.

“Even if I have never used the app before, I should be able to know where to look for settings, where to input information, where and how to pay for my products. And I should be able to see details without it looking too cluttered – it is really an art,” Doowa says.

Until recently, Doowa was the Thailand chief executive and founder of Moxy Asia – an online retailer of lifestyle products for women.

Moxy does not have a mobile app, instead opting for a well-developed mobile site.

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Doowa says Moxy’s use of vibrant and bright colors and large pictures that focus on the products themselves, are more pleasing to the consumer eye.

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2. Testing and Marketing

Moxy tests its sites regularly with its customers to gauge how they naturally use and interact with it.

“We make sure it is intuitive in finding what you need and making it presently available.”

However currently, only a small percentage of purchases are made to through the mobile site.

Doowa says that to increase mobile purchases, brands like Lazada use tactics such as issuing mobile only coupon codes.

He adds that while product reviews are important, in Thailand consumers will look to external sources as they do not trust reviews on the merchant site.

3. ROI

All over the world, the measurement for a good site should be conversion.

However conversion means different things for different sites, says Doowa. For a content site, it could be the number of subscriptions that a site gets. For an ecommerce site it will be sales.

“You can design the most beautiful website, but if no one transacts on it, what is the point? The company will not make any revenue and it will eventually close,” he says.

4. Payment

The payment process needs to be simple and seamless. It needs to offer a range of payment options including cash on delivery options. COD is one of the most common forms of ecommerce payment in many Southeast Asian countries including Thailand and Indonesia.

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Lazada stands out because it has managed to keep the main functionality of the website onto the app while still making the payment process easy.

Here is a screen shot of Zalora’s payment page also:

Mobile Commerce_Zalora_Payment_600Mobile commerce remains in its infancy in this region. With not a lot of mobile platforms in the market, making comparisons is hard, says Doowa.

However, Lazada remains the gold standard from a user perspective, the number of products it has available, and its general functionality.

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