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Less than 2 weeks into the new era, the tech industry has a hot topic to keep an eye on when “Lazada”, the giant e-commerce platform under the umbrella of Chinese Big Tech “Alibaba” makes its debut in 2024 with a new wave of layoffs in Southeast Asia Whether Thailand, Singapore, Indonesia, Malaysia, the Philippines, and Vietnam are the groups most affected by this delay. These are commercial, retail and marketing workers.
An e-commerce Guru’s point of view
“Phawut Pongwitthayaphanu” The founder and CEO of TARAD.com posted on his personal Facebook page. Based on content from a post by “Adrian Oh”, an e-commerce expert in Malaysia. In the “Modern Retail (MR)” Facebook group regarding the issue of Lazada layoffs as follows:
1. Lazada has fired every Chief Marketing Officer (CMO) in Southeast Asia.
2. 20% of Lazada’s employees in Malaysia were fired, including the CEO and the CLO (Chief Logistics Officer).
3. Also closing LazMall in Vietnam.
4. Intends to reduce the workforce by around 30% across South East Asia. Because in the past it had employed up to 10,000 workers in the region.
The latest round of layoffs “Pawut” sees it as a sign of preparing to fight back against other e-commerce companies, including Shopee, TikTok, and new players coming in, such as Temu.
They think that this adjustment of Lazada should not last more than the 1st and 2nd quarters, and then everything should return to a fast pace that can fully compete.
E-commerce giants are competing fiercely
E-commerce in Southeast Asia 2023 report by Momentum Works, a Singapore business consulting firm. It indicates that gross merchandise sales (Gross Merchandise Value or GMV) on e-commerce platforms in Southeast Asia in 2022 will be worth US$99.5 billion, growing approximately 1.8 times from 2020.
Shopee has the largest share at US$47.9 billion, followed by Lazada with US$20.1 billion and Tokopedia with Indonesia as its main market at US$18.4 billion.
And when researching the competition by country, it will be seen that Shopee and Lazada occupy the number 1 and 2 positions in Thailand, Singapore, Malaysia, the Philippines, and Vietnam. In Indonesia, it is a little more special than other countries. Because of overall product sales in 2022 at 51.9 billion US dollars, Shopee holds the number 1 share (36%), followed by Tokopedia (35%) and Lazada (10%).
This means that Indonesia remains a difficult market for Lazada. In addition, it faces even more challenges when TikTok in December 2023 plans to acquire 75.01% of Tokopedia for US$840 million. and will continue to invest more investment to expand TikTok Shop’s business in Indonesia through Tokopedia operations as well.
Scan the market in Thailand
The Momentum Works report also revealed that the total product sales on e-commerce platforms in Thailand in 2022 is US$ 14.4 billion, with Shopee holding the largest share (56%), followed by Lazada (40%) and TikTok Shop (4 %).
Searching for the operating results of the two platforms appearing in CredenData.co Found that in 2022 Lazada or Lazada Company Limited had an income of 20,675 million baht with a net profit of 413 million baht, while Shopee or Shopee (Thailand) Company had Limited income of 21,709 million baht with a net profit of 2,380 million. baht
Challenges of competition in the e-commerce business There are still important variables from new players who are constantly gradually invading the market. and create rapid growth For example, TikTok Shop, which has expanded from being a content platform. and add the cart feature or sell products and receive a share of the commission This has caused the number of people selling products on the platform to increase rapidly.
Or the entry of Temu, an e-commerce platform from Pinduoduo, one of China’s leading e-commerce service providers. which highlights products that are so cheap that they have begun to successfully penetrate the US market, etc.
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