History of Lazada: Leading Southeast Asian Ecommerce Since 2012

Lazada Group is a multinational ecommerce company headquartered in Singapore. Lazada’s history began in 2012 when it was set up to emulate Amazon’s business model and capitalize on Southeast Asia’s nascent online consumer market. For budding entrepreneurs, business owners, and anyone keen to learn from a start-up success story, the company’s history demonstrates the potential rewards of moving at pace and taking calculated risks.

Here at Business2Community, we’ve researched the Southeast Asian ecommerce leader and key milestones in its journey to date to give you a rundown of how it became a key player in the industry. Join us to explore Lazada’s history, development, future, and more.

Who Owns Lazada?

In 2016, the Chinese ecommerce giant Alibaba Group purchased a controlling stake in Lazada for approximately $1 billion. In 2017, Alibaba announced a further $1 billion investment, taking its stake from 51% to 83%. Lazada became Alibaba’s regional flagship in Southeast Asia.

Lazada Group was founded in 2012 by Maximilian Bittner, backed by Rocket Internet. Since then, it has raised hundreds of millions of dollars in funding from investors such as JP Morgan and Summit Partners.

Alibaba Group is considered one of the world’s largest companies. It went public in 2014, but two of its founders remain among Alibaba’s top five biggest shareholders.

Who Is the Lazada CEO?

James Dong has been CEO of Lazada Group since June 2022. Each of Lazada Group’s country-specific operations has its own leadership team. James Dong was previously head of its Thailand and Vietnam operations. In 2024, Dong was also appointed as CEO of Daraz, Alibaba Group’s Southeast Asian ecommerce platform.

A full list of CEOs is below:

Growth and Development of Lazada

The brainchild of Maximillian Bittner, Lazada has grown from nothing to become one of Southeast Asia’s leading ecommerce platforms in little over a decade. Operating in six countries, the platform sells products across a range of categories, including:

• Electronics
• Health and beauty
• Groceries
• Pets
• Home and living
• Fashion
• Automotive

Now the regional flagship of the Alibaba Group, Lazada has led the way in the Southeast Asian online retail revolution. Here, we run through some of the key developments of the past 12 years.

2012-2016: Lazada Finds its Feet in Southeast Asia and Attracts Attention

Lazada was co-founded by tech entrepreneur Maximilian Bittner in 2012. A former Morgan Stanley analyst and McKinsey and Company consultant, Bittner was the driving force behind the company’s vision to build an Amazon-esque ecommerce platform in Southeast Asia.

Back then, of course, Amazon wasn’t quite the titan it is today and Bittner saw an opportunity to transform the online retail experience in emerging markets such as Southeast Asia. With around 600 million people living in the region, the market held massive untapped potential and Bittner had a vision to provide a one-stop-shop for sellers, merchants, and brands.

In 2011, Bittner secured investment from Rocket Internet and moved from Germany to Singapore with his young family.

“I flew over, back then, to Singapore, Jakarta and Manila. I called my wife after two or three days, and I said, “We’re moving.” I think we literally moved with our just newly-born first daughter, and within two or three weeks, we had moved to Singapore and started building Lazada,” he said.

Bittner and his team moved quickly and launched the company across Indonesia, Malaysia, Thailand, Vietnam, and the Philippines in early 2012. Lazada launched in Singapore two years later. Throughout 2012 and 2013, the company announced several rounds of funding from investors, including JP Morgan, Kinnevik, and Summit Partners, totaling more than $400 million.

In the beginning, Lazada had a general retail model, buying and selling products itself. However, Bittner soon realized that a third-party marketplace model enabling local brands to come on board would enable the company to scale and achieve success exponentially faster. The company launched Lazada Marketplace in 2013.

The marketplace provides a wide range of services to support sellers, including secure payments, customer care, and a far-reaching logistics network. Sellers on the marketplace offer products across multiple categories, such as health and beauty, fashion, and electronics.

During the early years, Lazada lost many millions of dollars, facing Southeast Asian consumers who generally preferred to shop in local malls – half of the ten world’s biggest malls are in the region. In 2014, the company’s net revenue was $154.3 million with operating losses of $152.5 million.

With a goal to become profitable by 2015, Lazada’s model was designed to address the specific challenges of the markets it was operating in and lead a retail revolution. While the region is very diverse, both culturally and geographically, Bittner recognized that the company faced very similar challenges in all six countries.

Lazada prides itself on offering Southeast Asia’s most secure payments and financial services infrastructure. While the platform accepts digital payments it also operates on a cash-on-delivery basis, a decision that was critical in markets where it’s much less common for people to have credit cards and bank accounts.

With many of the carriers you’d expect the see elsewhere in the world not having a strong presence in Southeast Asia, Lazada also had to develop its own logistics capability. This led to the establishment of two logistics arms, Lazada eLogistics, for third-party retailers, and Lazada Express, for customer parcel delivery. The company set up warehouses across the region and built relationships with many regional and local logistics providers in different countries.

With a steadfast commitment to its vision and a team of “gritty entrepreneurs” on board, the Lazada platform cemented its position as the market leader in Southeast Asia within just a few years. Following its exponential growth, albeit still loss-making, Lazada caught the eye of China’s Alibaba Group.

2016-2024: Alibaba Pumps Funds into Lazada to Fuel Southeast Asian Expansion

With its own ambitions of expanding into Southeast Asia, Alibaba Group acquired a controlling stake in Lazada for a reported $1 billion in 2016. In 2017, the Chinese ecommerce giant announced a further $1 billion investment, taking its stake from 51% to 83%.

In 2016, Lazada acquired Singapore’s RedMart, a start-up in the online grocery sector. In 2017, it also became one of the first official Apple resellers in the region.

Alibaba invested a further $2 billion in 2018. At the same time, Bittner stepped down as CEO to take on an advisory role. He was temporarily replaced by Lucy Peng, one of the founders of Alibaba, before Pierre Poignant took the helm. As one of Lazada’s cofounders, Poignant had led the development and expansion of the company’s logistics operations, making him a great choice for CEO.

Later that same year, Lazada launched LazMall, touted as a virtual mall where customers could buy authentic brands online. Accessed through a channel in the website and app, LazMall was intended to meet the needs of customers looking to buy premium brands with confidence.

The move came following ongoing reports of fake and counterfeit goods being sold on the platform. LazMall also brought the promise of a 15-day returns policy and next-day delivery for certain areas.

With digital payments still slow to catch on across Southeast Asia, in 2019 Lazada partnered with Citigroup to launch a joint-branded credit card. This was a first for an ecommerce brand in the region. The credit card was first launched in Malaysia with other countries following quickly after.

Mary Zhou, Group’s Chief Marketing Officer said at the time: “As a leading consumer lifestyle destination, we want to bring more value to our customers and a co-brand card that rewards users on their purchases. With the theme ‘Play-it-up,’ this card brings lifestyle benefits to our valued customers advocating entertainment on top of our everyday promotions”.

In 2023, Alibaba reorganized its operations into six business units. Lazada became part of Alibaba International Digital Commerce (AIDC), which includes several other ecommerce platforms. Since then, Lazada has been through several restructuring exercises which led to staff layoffs.

The cuts led to speculation about a potential initial public offering (IPO) for AIDC in the USA. Further staff cuts in 2024 proved controversial when the company failed to consult the Food, Drinks and Allied Workers Union (FDAWU).

What is the Lazada Business Model?

Similar to many leading ecommerce companies, Lazada’s business model is made up of multiple revenue streams. It is both a business-to-business (B2B) and business-to-consumer (B2C) retailer.

Its first retail website launched in 2012, selling goods directly to customers in Malaysia, Indonesia, the Philippines, Thailand, and Vietnam. In 2013, it launched the Lazada Marketplace which allowed third parties to sell products. By 2014, the marketplace accounted for 65% of sales on the platform.

In 2023, the company had more than a million active sellers and 160 million regular users. Here are some of the ways in which Lazada makes money.

Lazada Marketplace

Much like its competitors, Lazada’s marketplace model allows merchants and local brands to sell a wide range of consumer goods through the website and offers secure payment options and reliable shipping on their behalf. For the service, Lazada charges a commission of between 1-4% of the sale price, depending on the product category.

LazMall

LazMall, Lazada’s more upmarket platform, offers more perks to customers such as a 15-day return period and next-day delivery. Sellers wishing to join LazMall must go through additional screening. Lazada charges authenticated merchants commission on every sale up to a maximum of 5%.

Other Revenue Streams

After Lazada’s acquisition of RedMart, it started offering a grocery delivery service in Singapore. Working in partnership with local grocers, customers are charged fixed delivery fees and the grocer pays a commission on the basket value.

Other revenue streams include LiveUp, Lazada’s exclusive membership program. LiveUp offers a range of discounts across Lazada platforms and other partners for an annual or monthly fee. Lazada also partners with several fintech companies across the region to offer credit options to its customers.

How Does a Seller Make Money on Lazada?

Anyone can sell on Lazada Marketplace. To open a store for free, sellers simply need to register online and provide ID and bank account information. Aside from the commission charged by Lazada, sellers keep all the money they make from selling via the platform. Its provision of secure payment methods and reliable, fast delivery across the region are also attractive to sellers.

New sellers are offered a range of benefits when they first sign up.

Retailers are also offered ongoing support services to help them maximize their success and grow their businesses. Lazada does this in several ways, including a Lazada University in each country it operates in, and Super Solutions.

Lazada University offers seller courses and online resources to help them learn more about how to make a success of their online store and offer the best shopping experience. Super Solutions is a range of intuitive solutions to help sellers market their businesses.

History of the Lazada Logo

The first Lazada logo featured a bright yellow shopping cart in the middle of a simple black font logo. The letter Z was in white on the shopping cart, with three colorful boxes flying out to represent the variety of products on the Lazada platform.

In 2014, the logo underwent a major redesign which saw a move to a much sleeker style with no graphics or additional colors. The font was dark blue.

The current logo was introduced in 2019 and features an orange and pink almost heart-shaped graphic on the left of the lettering which is now a darker navy blue color.

“We are elevating the role of Lazada beyond just a transactional shopping platform to a lifestyle destination that can enable and progress hopes, dreams, and desires—whether you’re a seller or a shopper,” CEO Pierre Poignant said.

The Future of Lazada

According to reports from Bain and Company, Google, and Temasek, the Southeast Asian digital economy hit $100 billion in revenue in 2023. Predictions also suggest that this number will continue to rise despite the economic challenges facing households in the region and globally. For ecommerce platforms such as Lazada, there is a continued opportunity to grow and increase profitability.

For Lazada, however, the competitiveness of the market it once led presents several challenges. As of March 2024, it was only third in the regional market, behind Shopee and Tokopedia. This suggests that the platform may need to work harder to regain its share of the rapidly growing market. What’s more, Southeast Asia’s internet access isn’t restricted, unlike in China, which leaves space still for other global competitors such as Amazon.

Rumors of an AIDC IPO are also interesting for Lazada. With private funding in Southeast Asia harder to come by, going public could open up crucial injections of cash for Lazada. This could enable to company to expand into new sectors or territories or invest in new technology to drive sales and profitability. Of course, these are just rumors, but it appears that the future for Lazada will continue to be an interesting story to follow.

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