Lazada puts pedal to the metal in e-commerce revolution

Dang Anh Dung, chief financial officer of Lazada Vietnam

18 months ago, Dung Dang Anh decided to join Lazada Vietnam, the national arm of Lazada Group, an e-commerce platform headquartered in Singapore and owned by Alibaba. He has become CFO of Lazada Vietnam and witnessed the fast-paced development of Vietnam’s e-commerce sector.

There is no denying that Dung entered the e-commerce world at an exciting, challenging time, made even more dynamic by the COVID-19 pandemic. According to Vietnam’s Ministry of Industry and Trade, the country’s e-commerce sector is expected to grow by 20 per cent in the fourth quarter of this year, compared with the same period in 2019, increasing the value of the sector to $12 billion.

Over the past five years, e-commerce in Vietnam has grown by roughly 30 per cent annually, thanks to the widespread adoption of smartphones, cheap and universally available mobile data, and increased trust in platforms like Lazada. The sector’s market size is currently forecast to reach $35 billion by 2025, which would make it the third largest in Southeast Asia.

Dung overserved that this sector is very dynamic with things often changing overnight.

Of course, something Dung could not have predicted when he joined Lazada was the pandemic, which has upended life around the world. Vietnam has handled the crisis remarkably well, however, keeping economic damage relatively contained, with e-commerce a clear winner.

“In other countries in Southeast Asia like the Philippines or Indonesia the pace of change is even faster than in Vietnam,” Dung said. “We are blessed by having very good control of the situation here, so that slows the dynamic changes a little bit, but it still encourages people to move into online shopping and e-commerce.”

Government officials and agencies are also now realising the economic benefits of e-commerce, particularly when it comes to helping small- and medium-sized enterprises, many of which have been severely impacted by the pandemic.

“Offline traffic for shops is slow, and a lot of places lost their customer base overnight,” he said. “We have fundamental changes happening in the wider economy that could take e-commerce to the next level, and I think that will continue in the coming years.”

Dung believes that even after the pandemic, many people will keep their online shopping habits, while improved regulatory environments will also spur further e-commerce expansion.

Of course, this is not to say that the road to continued robust growth will be smooth.

“The challenges are numerous,” Dung said. “Given the short history of e-commerce in Vietnam, we don’t have a deep bench of talent. I’m an example; I had zero knowledge of e-commerce or online sales. So if you want to build a sustainable workforce, you have to spend a lot of time investing in talent and people, and that is expensive.”

Building a working environment, where young talents are nurtured and empowered, is one of the key factors contributing to Lazada Vietnam’s sustainable development

He also hopes to see improved regulations as well as the introduction of more payment solutions in a country where reliance on cash remains strong.

Logistics present another challenge, as Vietnam’s geography and relatively poor road and railway networks hamper quick delivery outside of major urban areas.

Despite all of this, Dung is excited about the future, both in terms of his own career and the broader industry.

“I think the nature of this sector is very dynamic, and there are a lot of examples of things changing overnight,” he said. “Two years ago, Uber was a big name here, and now they’re gone – but e-commerce is here to stay. And because of its growing impact, both Lazada and the sector as a whole need to think about their role in the bigger environment. It is going to be disruptive and impact our lifestyles and logistics, with a major move from offline to online retail.”

He concluded with his personal philosophy. “I think every business should have a purpose; it shouldn’t just focus on making money, otherwise it won’t last long,” he said. “We have to think of our broader role and how we can help facilitate the economy and job creation.”

In line this vision, Lazada has launched numerous campaigns to promote the development of e-commerce market. On March 26, Lazada kicks off Lazada Super Party, a virtual concert slated to be simulcast across six countries to celebrate its ninth anniversary. The concert features global award-winning singer-songwriter Katy Perry and Korea's No.1 youth boy band NCT Dream.

These fun and exciting performances will accompany consumers as they countdown to Lazada’s Surprise Birthday Sale event that starts at midnight on March 27. Consumers across the regioni including Vietnam can tune in to the exclusive Lazada Super Party concert via Lazada’s in-app livestream channel LazLive, as well as local broadcasting networks and social media platforms.

Lazada Super Party - a virtual concert slated to be simulcast across six countries to celebrate Lazada's ninth anniversary

Founded in 2012, e-commerce platform Lazada operates in Vietnam, Indonesia, Malaysia, the Philippines, Singapore, and Thailand, connecting the region through technology, logistics, and payments capabilities. By 2030, the group aims to serve 300 million customers.

In 2016, Lazada became the regional flagship of the Alibaba Group. Products include LazMall, Southeast Asia’s biggest virtual mall connecting shoppers to more than 18,000 leading international and local brands; Lazada Marketplace, which provides a full suite of services, from secure payment options to customer care support; and a cross-border platform that offers a gateway for Southeast Asian brands to reach international consumers.