In December 2016, we covered how Singapore was to become the stage for a Amazon-Lazada showdown.
Well, unfortunately Amazon might have found itself even further behind the starting line.
The Lazada-Unilever Partnership
Lazada has officially teamed up with Unilever, and their marriage is undisputedly a soaring triumph for Lazada.
With the rapid expansion of Southeast Asia’s e-commerce sector, startups like ShopBack who have been playing the field are flourishing. And Bittner has shown that he certainly knows who he needs on his side.
According to the announcement, Lazada will now host a Unilever store. Meanwhile, Unilever gains access to Lazada’s shoppers, and their databank of consumer behaviour.
The companies will also be partnering “in terms of supply chain, data fulfilment, marketing, social commerce and talent development” to create one of S.E.A largest warehousing networks.
According to Lazada CEO Max Bitter, “this partnership is a game changer for Lazada as it endorses our one-stop platform strategy to support the online development of top brands like Unilever”.
Is This Lazada 3 : Amazon 0?
We discussed the epic showdown that would be Lazada vs. Amazon, but it’s clear that the latter is off to a terrible start.
Let’s review the evidence.
1. Lazada Acquires RedMart
Lazada was known for carrying everything from A to Z, all except perishables.
However, this was rectified when it acquired grocery startup RedMart. With the (back then) imminent arrival of Amazon Fresh, this was a strategic move. After all, the Singapore offline grocery market in 2016 was worth S$8 billion, the online, S$120 million. No doubt, these numbers have grown since.
Making this acquisition even more exciting was that Amazon had also made an offer for RedMart, but was rejected because theirs was rumoured to had been found wanting.
2. The Lazada-Unilever Marriage
Unilever is a leading global retailer with a presence in over 100 countries.
Singapore serves as Unilever’s regional business headquarters for SouthEast Asia and Austral-asia, and is also one of Unilever’s six Customer Insight and Innovation Centers.
This makes Singapore’s Unilever a hub for R&D, which could potentially a boon for Lazada.
In addition, Unilever’s global leadership development centre – Four Acres Singapore – is a facility that “develops leaders with a ‘purpose-driven’ approach to business”.
During its 2013 launch, Unilever CEO Paul Polman described Singapore as “the nexus of the developed and emerging world [and] a leading hub for leadership and innovation.” As a result, Four Acres Singapore was due to deliver over half of all Unilever’s global leadership development programmes.
Now, Four Acres Singapore was not explicitly mentioned during the Lazada-Unilever partnership announcement. But if you recall, talent development was cited as an area where the companies would be “working closely together on”.
Potential goldmine for Lazada? We would like to think so.
3. Lazada’s Billion Dollar Backer
Even by itself, Jack Ma’s US$1 billion dollar backing is already an immense victory for Lazada. Why do we think so?
According to TechCrunch, Amazon has plans to expand into the entire SEA region, but Singapore was first for its market potential and prime location. Think regional hub. But with its delay, all this is but lip service.
Meanwhile, as Amazon finds itself stuck in the trenches, Lazada has begun its own SE Asian domination campaign. The German startup has begun Taobao delivery in Malaysia, indicating that it is experimenting with cross-border trade.
And it wasn’t too hard to start either. After all, they are piggybacking on Alibaba’s logistics arm – Cainiao Network – to streamline the transport of Chinese goods into Singapore.
But perhaps most importantly, the Lazada-Alibaba partnership empowers foreign brands with prime (pun intended) access to Chinese consumers with Tmall Global.
Since China has already eclipsed USA as the world’s largest e-commerce market, this makes Lazada an extremely attractive player, not just regionally but globally.
And yes, we concede that Amazon is also in China but their market size is negligible (0.9%) in the face of Tmall’s (58%).
Has Bezos Lost The Battle?
Given Bezos’ clout, it’s definitely not game over for Amazon.
However, the crux will be on how Bezos plays his cards from now on. It’ll likely involve plenty of Amazon Singapore promotions, so that’s something to look out for.
One thing’s for sure though, Jack Ma is probably laughing his ass off wherever he is now.
Featured Image Credit: Metro TV News