This web app uses cookies to compile statistic information of our users visits. By continuing to browse the site you are agreeing to our use of cookies. If you wish you may change your preference or read about cookies

close

Why Lazada Group's Business Model is so successful?

Get all the answers

Embed code:

x
Copy the code below and embed it in yours to show this business model canvas in your website.

Lazada Group’s Company Overview


Lazada Group is a leading eCommerce platform in Southeast Asia, founded in 2012 by Rocket Internet. Headquartered in Singapore, Lazada provides an online shopping and selling destination in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Lazada features a wide array of products across various categories including electronics, fashion, home appliances, and baby essentials, from both international and local brands. The company's mission is to accelerate progress in Southeast Asia through commerce and technology. Lazada is part of the Alibaba Group, which acquired a controlling stake in the company in 2016.

Business Model:
Lazada operates on a hybrid business model which combines both Business-to-Consumer (B2C) and Consumer-to-Consumer (C2C) models. The platform allows businesses to sell their products directly to consumers, and also enables individual sellers to list and sell their items. Lazada provides a comprehensive suite of services to its sellers including marketing, customer service, and logistics, to help them scale their businesses. The company also has its own warehouses and distribution centers to ensure efficient delivery of products.

Revenue Model:
Lazada's primary source of revenue is the commission it charges from sellers for each sale made through its platform. The commission rate varies depending on the category of the product. In addition to this, Lazada also generates revenue through advertising. Sellers can pay for promotional services such as sponsored product listings, banner ads, and top spot ads to increase their visibility on the platform. Furthermore, Lazada offers a paid subscription service, LazMall, where premium sellers can showcase their products and enjoy benefits such as higher visibility and faster delivery.

https://www.lazada.com/en/

Headquater: Singapore, Singapore, Southeast Asia

Foundations date: 2012

Company Type: Subsidiary

Sector: Consumer Services

Category: eCommerce

Digital Maturity: Digirati


Lazada Group’s Related Competitors



Lazada Group’s Business Model Canvas


Lazada Group’s Key Partners
  • Alibaba Group (Ownership)
  • Brands (Apple, Samsung, Sony, Asus, HP, Xiaomi, Russell Hobbs, i2i, Casio etc)
  • Telco (Globe, Smart, Sun Cellular, Broadband, etc)
  • Affiliates (Lazada Affiliate Program, Criteo Affiliate Program etc)
  • Payment and Financial Services (Paypal, Hello Pay, GCash, BDO installments etc)
  • Trustwave
  • Acquires consumer-to-consumer platform Trade Me
  • Awards and recognition
Lazada Group’s Key Activities
  • Marketing and account management
  • Idea Generation
  • Data Driven Decision Making
  • E-commerce platform management
  • Procurement
  • Logistics
  • Technical Development
  • Finance
  • Maintenance and growth
  • Partnerships
  • Support
  • Operations
  • Communication
  • Community
Lazada Group’s Key Resources
  • 10 million products
  • 80 million page visits a month
  • A supply chain network of three fulfillment centers
  • More than ten distribution centers
  • Over 700 vehicles
  • Cash on delivery service
  • Its own logistics company
  • "Marketplace" business model
  • Alibaba's massiveness infrastructure
  • Including its payment platform Alipay
  • With new investors such as Tesco
  • Transportation and more
Lazada Group’s Value Propositions
  • Online Shopping Mall
  • Convenient lifestyle
  • Free Shipping
  • Cash on Delivery
  • Incredible deals
Lazada Group’s Customer Relationships
  • Discounts
  • Vouchers
  • Promotions
  • Campaigns
  • Automation
  • Feedback reviews
  • Payment options
  • Tracking tools
  • Social media
  • Website
  • Customer care
Lazada Group’s Customer Segments
  • Massive
  • Online customers
Lazada Group’s Channels
  • Website
  • Mobile app (Android, iOS)
  • Social networks
  • Blog
Lazada Group’s Cost Structure
  • Branding
  • Customer and Seller acquisition
  • Operations
  • Staff
  • IT infrastructure
  • Platform development
  • Marketing
  • Customer Service
  • Maintenance
Lazada Group’s Revenue Streams
  • Commissions from sellers
  • Service fees
  • Marketing services (banners, targeted mailings, etc.)

Vizologi

A generative AI business strategy tool to create business plans in 1 minute

FREE 7 days trial ‐ Get started in seconds

Try it free

Lazada Group’s Revenue Model


Lazada Group makes money by combining different business models. Below, you will find the list of the different monetization strategies identified for this company:

  • Transaction facilitator
  • Two-sided market
  • Advertising
  • Channel aggregation
  • Integrator
  • Online marketplace
  • eCommerce
  • Digital transformation
  • Customer loyalty
  • Customer relationship
  • Cross-selling
  • Data as a Service (DaaS)
  • Disintermediation
  • Ecosystem
  • Group buying
  • Mobile first behavior
  • Online to Offline O2O
  • Peer to Peer (P2P)
  • Digital
  • Market research
  • Discount club
  • Remainder retail
Analytics


Market Overview
  • Patterns
  • Sectors
  • Categories
  • Companies
  • Right click on the nodes to explore

Lazada Group’s Case Study


Lazada Group's CASE STUDY


In 2012, an audacious vision was born: Revolutionize eCommerce in Southeast Asia. That year, Lazada Group emerged on the scene, laying the foundation for a burgeoning digital marketplace spanning Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Fast forward to today, and it is impossible to narrate the eCommerce tale in Southeast Asia without putting Lazada at the center. Our journey with Lazada is one of relentless adaptation and strategy, coupled with understanding the nuances of diverse markets.

The Genesis of Lazada Group


Founded by Rocket Internet, Lazada Group took its initial steps in 2012, aiming to provide an accessible and varied eCommerce platform for consumers in Southeast Asia. The company, headquartered in Singapore, made waves quickly by offering diverse product categories, spanning electronics, fashion, home appliances, and baby essentials. In a region characterized by fragmented logistics and varying consumer preferences, this was no small feat. However, the strategic acquisition of a controlling stake by Alibaba Group in 2016 granted Lazada both the logistical prowess and the capital infusion needed to scale operations significantly.

Hybrid Business Model: B2C and C2C Integration


What makes Lazada distinctively unique is its hybrid business model that seamlessly integrates both Business-to-Consumer (B2C) and Consumer-to-Consumer (C2C) paradigms. On Lazada's platform, both businesses and individual sellers can list and sell products. This dual approach has become a cornerstone of Lazada's strategy, allowing a broad spectrum of sellers to harness the platform's capabilities. By offering marketing, customer service, and logistical support, Lazada empowers sellers to scale and reach wider audiences.
Furthermore, Lazada operates its own warehouses and distribution centers, facilitating efficient delivery across vast and heterogeneous markets. According to Tech in Asia, Lazada's logistics network includes over ten distribution centers, several fulfillment centers, and a fleet of over 700 vehicles, making it one of the most comprehensive eCommerce logistics systems in Southeast Asia.

Revenue Model: Multiple Streams of Income


Lazada's revenue model leverages several streams, primarily focusing on commission from sellers. The rate varies across product categories—a strategic choice enabling the company to cater to an array of sellers, from small entrepreneurs to large corporations. This versatility is further amplified through advertising revenue generated from sponsored product listings and banner ads.
Notably, Lazada offers a paid subscription service, LazMall. This premium service enables sellers to enjoy increased visibility, faster delivery, and a more streamlined customer experience. Lazada's diversified revenue streams exemplify a resilient business model designed to withstand market fluctuations.

Accelerating Southeast Asia's Progress


Lazada’s mission—to accelerate progress in Southeast Asia through commerce and technology—drives its operational ethos. Digital transformation is at the heart of Lazada, propelling innovations that cater to contemporary consumer needs. By prioritizing mobile-first behavior, Lazada ensures seamless access for the region's increasingly mobile-savvy population.
Data reveals that Southeast Asia boasts over 400 million internet users, making it one of the largest online markets globally (Google, Temasek, and Bain & Company, e-Conomy SEA Report 2022). Lazada tapped into this potential early on. Its integrated digital ecosystem, which includes partnerships with brands like Apple, Samsung, and Sony, as well as financial service providers such as Paypal and GCash, enhances the overall consumer and seller experience.

Customer-Centric Approach


One cannot discuss Lazada’s strategy without emphasizing its customer-centric approach. Lazada continually introduces features that cater to both functional and emotional needs. This includes simplifying the shopping experience, offering variety, and ensuring the platform informs and connects users effectively. Social impacts such as fostering affiliation and providing fun and entertainment are addressed through engaging promotional campaigns and user-friendly interfaces.
From discounts and vouchers to automation and robust customer service, Lazada’s strategies foster customer loyalty and enhance user experience. Additionally, the cash-on-delivery option—a critical feature in markets with low credit card penetration—underscores Lazada’s adaptive approach to diverse consumer preferences.

Insights and Expert Commentary


As summarized by Professor David Bell of Wharton School, “eCommerce platforms like Lazada need to transcend mere transactional relations, instead becoming integral parts of consumers' lives.” This insight resonates with Lazada’s broader mission and strategies, highlighting the need for a holistic approach to consumer engagement.
Also, industry expert Benedict Evans notes the importance of backend infrastructure in scaling eCommerce operations. Lazada’s use of Alibaba's logistics and payment systems, such as Alipay, demonstrates how leveraging backend expertise can drive operational efficiency and customer satisfaction.

Conclusion


Lazada Group’s story is a testament to strategic vision and adaptability. By integrating a hybrid business model, multiple revenue streams, and a robust logistical network, Lazada navigates the intricate landscape of Southeast Asian eCommerce with aplomb. The convergence of innovative technology, customer-centric practices, and strategic partnerships positions Lazada as a trailblazer in the digital marketplace. As consumers in the region continue to embrace digital commerce, Lazada's trajectory offers profound insights into the future of global retail.


If you enjoyed this content, you’re in for a treat! Dive into our extensive repository of business model examples, where we’ve dissected and analyzed thousands of business strategies from top tech companies and innovative startups. Don’t miss out!

+100 Business Book Summaries

We've distilled the wisdom of influential business books for you.

Zero to One by Peter Thiel.
The Infinite Game by Simon Sinek.
Blue Ocean Strategy by W. Chan.