|Lazada continues to offer new promotions to entice its customer base |
As one of the early e-commerce players in Vietnam, Lazada is at the forefront of technology to meet customers’ evolving demand. During the Birthday Sale Boom shopping festival in March, the company increased its investments in two new shopping channels, LazLook and LazBeauty, bringing a unique and sophisticated shopping experience to users. There are also myriad promotions for refunds and free shopping.
At the same time, the Lazada Super Show virtual music festival has also been held. By integrating 360-degree AR technology, viewers were immersed in unique spaces at home. Meanwhile, the company also applies realistic AI and AR-powered Virtual Try-On to shoppers, enabling beauty lovers to instantly sample products with pictures or live videos of themselves before making a purchase.
The moves are all part of attempts to be ahead of the e-commerce game in expectation of an explosion in growth. According to a report released by global management consulting firm McKinsey in December, between now and 2026, the Southeast Asian market including Vietnam is projected to triple at a compound growth rate of 22 per cent and will reach around $230 billion in gross merchandise volume.
After experiencing a wave of inflection points in its economies, Southeast Asia’s e-commerce market is at the threshold of its second phase. McKinsey predicts that advanced technological development will create challenges for e-commerce businesses but also open up opportunities for those that can take advantage of technology to ride the new cycle.
Notably, AI has created the outstanding competitive edges for e-commerce businesses, helping them improve productivity and efficiency so they can flexibly adapt to external factors. AR/VR technologies are also being strongly applied by e-commerce platforms to provide a shopping experience like at physical stores, shortening the gap between online shopping and offline shopping.
Matt Janaway, CEO of digital marketing agency Marketing Labs, said, “Systems like ChatGPT have exploded, and marketers worldwide will be finding ways to use it to make their jobs easier. I can see many e-commerce businesses going far with it and doing things like automating product and category descriptions.”
Amidst the challenging environment, e-commerce businesses are being forced to change their strategies to increase their competitiveness, pursuing sustainable development rather than focusing on competition in pricing and other short-term indicators, Janaway added.
This change is vital as customers are changing their criteria and shopping behaviour post-pandemic. According to the 2022 SYNC Southeast Asia report by Meta and Bain & Company, online shoppers in Southeast Asia are experimenting with different brands, as 53 per cent of survey respondents said they have switched their most purchased brand.
The Year in Search 2022 report by Google also uncovered searching trends in Vietnam. It found that customers are searching for clear indications of whether a brand provides quality service and reliable products, and they are weighing up the options to see which one offers the best deal overall rather than the cheapest price.
To keep up with the changes, Lazada has implemented its strategies to promote sustainable development rather than competition in pricing and short-term indicators. The platform has made heavy investment in building logistic and technological infrastructure, diversifying product categories, improving product quality, and optimising experience for users and merchants.
“Promotion programmes are indispensable for e-commerce platforms to retain customers. However, businesses should balance other factors and find solutions to access sophisticated customers rather than focusing on price reduction. Technology investment and deep customer understanding will help improve service quality and product portfolios, which are the key focuses of e-commerce strategy in the coming time,” said Dang Anh Dung, deputy CEO of Lazada Vietnam.
With smarter shopping habits, customers have raised their expectations for the e-commerce shopping experience in the new phase of development, Dung added.
To be successful, e-commerce firms have to double down on their efforts to understand customers and create new values. To achieve profound understanding, businesses should constantly update market trends and take advantage of data from customers who are using their products and services.
Lazada is continuing to adjust its strategy to bring new and sophisticated experiences to internal and external touchpoints in the customer’s shopping journey. A few years ago, assortment width was the key for e-commerce businesses to attract customers. To boost the growth rate, many companies focus on assortment width by introducing new products and diversifying their business lines.
In the new phase, Lazada is shifting its focus to assortment depth by improving the quality of products on their platforms. Thus, the company can cope with the rising competition between platforms and customers’ evolving demand.
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