Established in 2012, Lazada was acquired by Alibaba four years later. It is an online marketplace accessible in several Southeast Asian nations, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. It serves a vast population of 655 million people, actively. 

Lazada has successfully mastered the nuances of e-commerce in the region, leveraging a combination of customer-centricity, innovation, strategic partnerships, and localization. The company’s customer-centric philosophy underpins its value proposition, competitive pricing, personalized recommendations, and promotional campaigns.

In this guide, we break down Lazada’s market insights: the figures it is doing, brand performance, and growth compared to competitors.

Let’s get right into it!

Lazada trends and statistics

Research indicates that Lazada’s popularity index benefits from its enhancements in digital media engagement. For instance, let’s look at Lazada’s trend in Indonesia. Indonesia has a population of approximately 262 million and 132 million internet users, ranking fifth globally.

Internet penetration in Indonesia reached 78.1 percent in 2023, a significant increase from 64% in 2018. Lazada saw an opportunity to penetrate the digital space there, and take a lead in Indonesia, with over 20 million quarterly visits.

Lazada receives over 13 million monthly web visits in Malaysia and is among the top three regionally. It ranks #3 in popularity of app downloads in both the Playstore and the Appstore, with millions of active social media engagements.

The e-commerce market share in Thailand is primarily divided between Shopee and Lazada. Lazada captures a significant portion with 35%, while Shopee holds a leading position with approximately 57% of the total website traffic.

In Q3 of 2022, Shopee dominated the multi-vendor e-commerce market in Vietnam, capturing a whopping 57% of all website traffic. Tiki and Lazada Vietnam trailed significantly, securing 16% and 13% of the market, respectively. The remaining 14% of the market was divided among other platforms.

The company’s website features product categories and daily live sales promotions to engage customers, and customers seamlessly choose payment methods to submit orders online. 

Lazada focuses on establishing a brand presence on social media platforms such as Twitter, Facebook, and Instagram to engage in consumer communication and gain insights into market demands. 

Lazada brand performance 

With its massive user base of 160 million monthly active users and an impressive annual revenue of $1.8 billion, Lazada remains significant for brands seeking to expand into Southeast Asia. 

Lazada’s brand performance in Southeast Asia has been nothing short of exceptional. As a pioneer and leader in the region’s e-commerce landscape, it has consistently demonstrated the ability to adapt, innovate, and thrive in a competitive market. 

Take a look at some key indicators of Lazada’s brand performance:

Market Leadership

Although Lazada has experienced a significant decrease in its annual trend, regressing to a level lower than its starting point in early 2020, it still consistently ranks among the top e-commerce platforms in Southeast Asia, competing head-to-head with major players like Shopee and Tokopedia. 

Its vast selection of products, reliable services, and strong brand reputation have solidified its position as a trusted destination for online shoppers.

Sales Growth

Lazada regularly reports impressive sales figures, particularly during mega campaigns like the Lazada Birthday Sale and 11.11.

 

These events generate significant revenue and reinforce Lazada’s position as a major driver of e-commerce growth in the region.

Customer Engagement

Lazada boasts a large and loyal customer base, with millions of active users across Southeast Asia. Its focus on personalization, gamification, and social media engagement has fostered a strong sense of community and brand loyalty among its users. 

For instance, their gamification campaign is the GoGoMatch game with a total of 755 million tokens allocated to player winners who can in turn convert their tokens to Lazada.

Brand Awareness and Recognition

Lazada has successfully built a strong brand identity that resonates with Southeast Asian consumers. Its iconic logo, catchy slogans, and vibrant marketing campaigns have made it a household name in many countries.

One of Lazada’s most popular and memorable advertising campaigns is the “Slash It” campaign. 

This campaign, launched in various Southeast Asian countries, featured a contest where prospects could message their friends and family to willingly slash a discount into any product they’re willing to buy. 

Purpose of the “Slash It” Ads:

• Brand recall and recognition: The  fun is aimed at creating a strong brand recall, making Lazada synonymous with great deals and discounts.
• Highlighting discounts: The campaign focused on encouraging consumers to take advantage of these deals.
• Creating a sense of urgency: The use of the word “slash” sparks a sense of urgency in viewers, prompting them to quickly make purchases before the deals expired.
• Appeal to value-conscious Consumers: The campaign resonated with budget-conscious shoppers, looking for the best deals on their favorite products.

Innovation and Expansion

Lazada continues to innovate and expand its services, introducing new features, services, and product categories to cater to its customers’ evolving needs and preferences. Its foray into live commerce and social commerce demonstrates its commitment to staying ahead of the curve.

Pressure from innovations like Tiktok Shop has claimed a significant proportion of Lazada’s market share. Here’s a highlight of a few major challenges Lazada is addressing:

• Intense competition: Southeast Asia’s e-commerce industry is highly competitive, with multiple players like Shopee and Tokopedia vying for market share
• Evolving consumer preferences: Consumer preferences and behaviors constantly change  
• Logistical challenges: Southeast Asia’s diverse geography and infrastructure pose logistical challenges for e-commerce businesses. 

Despite these challenges, Lazada’s future looks bright. Its strong brand reputation, innovative approach, and commitment to customer satisfaction position it well for continued growth and success in Southeast Asia.

Lazada’s growth compared to competitors

Lazada vs TikTok Shop

We conducted a survey and found that consumers spending on TikTok Shop have reduced their spending on Lazada by 45% in Indonesia, Thailand, and the Philippines. 

TikTok Shop recently expanded to six Southeast Asian countries — Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand. According to Caixin, in the first half of 2023, TikTok Shop gained a GMV (Gross Merchandise Value) of nearly USD 9 billion in Southeast Asia, close to half of Lazada’s GMV. 

In certain markets, like Vietnam’s, TikTok Shop has even overtaken Lazada regarding gross merchandise value (GMV). TikTok Shop’s innovative blend of entertainment and shopping and aggressive marketing tactics have contributed to this rise. 

Although Lazada still holds a significant 7.6% market share in Southeast Asia as of Q4 2024, TikTok Shop’s relentless growth, particularly among younger demographics, poses a substantial challenge to Lazada. 

Lazada vs Shopee

Lazada and Shopee have grown significantly in recent years, but Shopee has edged ahead in monthly active users and gross merchandise value (GMV) in several Southeast Asian countries, including Indonesia, Vietnam, and Thailand.

This is attributed to Shopee’s aggressive marketing strategies, focus on mobile-first shopping, and emphasis on gamification and social commerce features.

Shopee’s GMV reached $70 billion in 2022 but continued to grow in 2023, even at a slower rate. ECDB speculates that Shopee will maintain a similar growth rate to last year and reach US$88.4 billion in GMV by 2025.

However, Lazada remains a strong contender, particularly in markets like Singapore and Malaysia, where it still holds a considerable market share.   

Lazada vs Tokopedia

Tokopedia is challenging Lazada because its primary focus is only on Indonesians. Tokopedia’s deep understanding of local consumer preferences and a strong network of local sellers have allowed it to capture a large share of the Indonesian e-commerce market. For instance, 51% of users in Indonesia claimed they use Tokopedia for Ramadan shopping, which is higher than the 34% who prefer Lazada.

Lazada, however, is not far behind. Its continued investment in logistics and efforts to localize its offerings have helped it gain traction in Indonesia. Furthermore, Lazada’s regional presence and broader product selection could give it an edge over Tokopedia in the long run.

Consumer preference in using e-commerce to shop

Southeast Asian consumers are increasingly embracing e-commerce, driven by convenience, wider product selection, competitive prices, and the rise of mobile shopping. However, physical stores are still relevant and appealing for certain aspects of the shopping experience.

Key factors influencing consumer preference

Convenience

E-commerce offers unparalleled convenience, allowing shoppers to browse and purchase products anytime, anywhere, at their own pace. This particularly appeals to busy individuals and those who have limited access to physical stores. The widespread adoption of smartphones has also fueled the growth of mobile commerce, enabling consumers to shop on the go with ease and convenience.

Product variety

Online platforms boast a vast selection of products, often surpassing the inventory of individual brick-and-mortar stores. This enables consumers to discover unique items, compare prices across brands, and access a wider range of options.

Competitive pricing

E-commerce platforms often offer competitive prices due to lower overhead costs and the ability to source products directly from manufacturers. Budget-conscious consumers who seek the best deals and discounts usually choose the online model.

Reasons for continued preference for physical Stores

Tangible experience

Physical stores let you see, touch, and try products before buying them, which is crucial for certain categories like clothing, footwear, and cosmetics.

Immediate gratification 

In physical stores, you can take your purchases home immediately. There is no need to wait for days or weeks.

Social interaction

Shopping can be a social activity for some, and physical stores offer opportunities for interaction with sales staff and fellow shoppers.

Many Southeast Asian businesses are adopting a hybrid model that combines the best of both worlds due to evolving consumer preferences. They offer online platforms for convenience and product variety while maintaining physical stores for tangible experiences and personalized service.

Lazada’s approach

Lazada seamlessly integrates its online and offline channels, providing a unified shopping experience. This includes options like “click-and-collect,” where customers can order online and pick up their purchases at designated locations, and physical pop-up stores that offer a taste of the Lazada experience.

Lazada is also known for its large-scale shopping events, such as “Lazada Birthday Sale” and “11.11,” which create a sense of excitement and urgency among shoppers. These campaigns feature significant discounts, flash sales, and gamified elements to drive engagement and boost sales. 

Lazada introduced a Money Back Guarantee program to protect buyers from potential scams. The policy allows a buyer to get a refund if an ordered item is damaged, doesn’t arrive, or is not delivered as described.

Key-drivers behind e-commerce development

Rising Internet and smartphone penetration

The rapid expansion of internet access and smartphone usage across Southeast Asia has been a primary catalyst for e-commerce growth. As more people connect to the internet, they gain access to online shopping platforms, creating a larger potential customer base for e-commerce businesses.

Increasing disposable income

As Southeast Asian economies continue to grow, disposable incomes are also on the rise. This gives consumers more spending power, allowing them to shop online for a broader range of products and services.

Changing consumer behavior

Southeast Asian consumers increasingly embrace the convenience and variety of online shopping offers. The ease of browsing and purchasing products from the comfort of their homes, coupled with the wider online selection, has shifted consumer preferences towards e-commerce.

Government support and initiatives

Southeast Asian governments are actively promoting the growth of e-commerce through various initiatives. This includes investing in digital infrastructure, creating favorable regulations, and incentivizing e-commerce businesses.

Investment in logistics and infrastructure

E-commerce companies invest heavily in logistics and infrastructure to ensure efficient product delivery. This includes building warehouses, partnering with local delivery companies, and developing innovative solutions to overcome logistical challenges.

Lazada’s challenges with certain Southeast Asian countries

Lazada faces distinct challenges in certain countries within Southeast Asia, despite being a pioneer in the region’s e-commerce. These hurdles stem from a combination of factors, including fierce competition, evolving consumer preferences, and logistical complexities.

The fierce competition from Tokopedia and Shopee, who have a deeper understanding of the Indonesian market gives Lazada tough time.

Moreso, Indonesia’s vast archipelago and underdeveloped infrastructure pose logistical challenges for timely and efficient delivery.

TikTok Shop’s drastic expansion and social commerce model have also made significant inroads in Vietnam, surpassing Lazada’s GMV in 2023.

Vietnamese consumers are highly engaged in social media and increasingly turn to platforms like TikTok Shop for their online shopping needs.

Moreover, Thai consumers in Thailand are highly price-sensitive, making it challenging for Lazada to maintain profitability while offering competitive prices. 

Like Indonesia, the Philippines’ archipelagic geography poses logistical challenges for efficient delivery, particularly to remote areas. The widespread preference for cash on delivery in the Philippines also requires Lazada to maintain a complex and costly cash-handling system.

Wrapping up

As the lines between online and offline shopping continue to blur and as new technologies and business models emerge, Lazada stands at the forefront. With its strategic focus on personalization, logistics, marketing, and customer service, Lazada is shaping the industry. 

Whether you’re a veteran or a newcomer to e-commerce, insights like this expose what successful players in the industry are doing in terms of figures and action.