Interesting Facts on How Lazada Builds E-Commerce Trust

Lazada Malaysia chief executive officer Hans-Peter Ressel has been with the company since the group’s inception, and he talks about how Lazada becomes a household name. 

 

Lazada Malaysia

Ressel believes more can be done to entice Malaysians to shop online. – Pic by Yellow Pages Malaysia

 

Lazada Group is an e-commerce website founded in 2012 by German-based Rocket Internet. It is aimed at establishing a regional online shopping platform in South East Asia to tap the growing online consumer market there. With close to 600 million people living in the region, it is also a huge market.

 

The establishment of online facilities for leisure, socializing and shopping has changed the way people live and access such needs.

 

For example, online retail sites such as Lazada provide convenience at a click, and everything that is available at a physical retail store can be purchased at Lazada.


Lazada Malaysia chief executive officer Hans-Peter Ressel feels that differentiating a brand from other players online is the way to go. “Giving good customer experience and providing great products with competitive prices will keep them coming back,” he says.

 

Lazada Malaysia

The user-friendly website has a great range of products. – Pic courtesy of Lazada Malaysia Facebook Page

 

All customers need to do at Lazada website is choose what they want to put into the shopping cart before paying at the ‘checkout’. The product will be posted or shipped to the customer’s chosen addresses.

 

A comprehensive return policy is also the hallmark of Lazada, where any defects or mistaken products can be returned within seven days after receipt, with shipping costs for returned items and new ones borne by the company.

 

Add manufacturer’s warranty (up to two years) into the mix, and one can have a secure and safe shopping experience.

 

Lazada receives up to 30 million visits to its website every month.

 

Last year, statistics portal Statista estimates the total revenue for the Malaysian e-commerce market to hit US$894 million (RM3.75 billion) with the revenue expected to see an annual growth rate of 23.7% in the next five years.

 

A majority of online shoppers shop for electronics and media, worth US$380 million (RM1.64 billion).

 

Internet user penetration rate is 61.7% this year and is expected to rise a further 15% by 2021.

 

Lazada Malaysia

A lack of trust makes many web users hesitant to shop online. – Pic by Shutterstock

 

A 2016 Bain Brief and Google’s Consumer Barometer cite almost half of Malaysia’s population research products or services online. However, only 29% of consumers convert this research into an online purchase. A lack of trust is cited as the main reason for this hesitance, which is also highlighted by the desire to pay cash on delivery when purchasing goods online.

 

The report also revealed that in terms of market share, Lazada is at number two with 12% while competitor Mudah.my is at the top with 19%.

 

Due to this, Ressel feels that there is still room for growth in the retail e-commerce industry in Malaysia.

 

“E-commerce is still in the early stages in this region. Customers are not always comfortable ordering something online with a credit card. It’s something we’re always working on. But when you do gain their trust once and you provide great customer experience and they get their items fast — within two days — that creates trust. It then becomes a word-of-mouth recommendation to their families and friends. This great feedback kicks in and there’s good reputation developed.”

 

For super-tough customers, Ressel says that more engagement is needed in the form of social media maintenance and online analytics. “You interact with them and give exclusive and exciting offers such as lucky draws. It gives rise to certain network effect where you don’t have to do marketing all the time but your happy customers will.”

 

Lazada Malaysia

Lazada takes every customer feeback seriously to improve and personalize its services. – Pic courtesy of Lazada Malaysia Facebook Page

 

Segmenting the customers also keeps them informed of items that are of interest to them. This is done through a screening process where customers can opt for newsletters or push notifications for updates on latest products available at the website.

 

For example, new parents who buy diapers online will need to stock up on more, giving the company an impetus to notify such customers of deals and offers. In contrast, individuals who buy a handphone will not purchase an additional one in a while.

 

“There’s a lot of data science at the back end for this. It wasn’t easy in the beginning as we needed to collect these data. Once we did that, we find it easier to engage with the clusters,” says Ressel.

 

 

Mother’s Day is coming up (14 May), so why don’t you buy her a treat? View great savings of up to 80% in the Supermom Sale campaign when you shop for kitchenware, flower bouquets, make-up, accessories and many more at Lazada. Click here to browse and shop.


Or if you prefer visiting shops, you can also check here for the comprehensive listings on Yellow Pages Malaysia for retail outlets selling gifts galore.

 


Do you have something in mind?