Lazada Is a constantly evolving technology that connects to the vast and diverse nations from South East Asia to many regions. Lazada group was founded in 2012 and its headquarters is situated in the downtown core. It is considered that the founder of lazada it’s the rocket Internet. This E-commerce company it’s mostly based in Southeast Asia and covers mostly all the different kinds of cultures and ethnicities. Here, let’s see How does Lazada make money?
Lazada is an international e-commerce company that is owned by Alibaba Group, and it is said that it was, along with Rocket Internet, also founded by Maximillian Bittner. Its presence is mostly in six countries that are Singapore, Thailand, Malaysia, Indonesia, Vietnam, and the Philippines. Like Amazon, Lazada can be also considered to be an online platform for shopping.
To make it easier Lazada makes sure that it handles the processes such as shipping, payment, or reclamations. So, therefore, the merchants only have to focus on selling relevant goods to relevant customers in the demographic area. The Lazada website was launched in March 2012, the initial business was to sell goods such as clothing and electronic items but gradually it covered more of the things. There’s even something called the Lazada business model which is followed by the company to make more profit by getting some Commission on every sale the merchants do. platforms such as Lazada marketplace and large malls for the margins to sell their items and provide more benefits to the company. The items which company offers are
- Health and beauty products
- Women’s and men’s fashion
- Home and living items
- Electronic items
- Automotive and motorcycle
As said earlier, Lazada has a different business model itself to gain more profits. Lazada is open to different kinds of customers who can shop. Why are there desktop websites or mobile applications and the products which are available are authenticated for their legitimacy.
Lazada Marketplace
Like said Lazada is kind of similar to Amazon and other online marketplaces where the merchants have the freedom to sell various products on their platforms. If the seller is Lazada authorized then they will take care of the payment and the shipment process as well. Lazada fully supports the merchants increasing their sales and providing the products to the part of the population which requires it. There were multiple initiatives also taken care of by Lazada to improve merchants’ businesses such as super e-businesses and Lazada university. If there is some successful sale done by the merchants then lazada takes a Commission between one to four percent, and it depends upon the category or the type of product they had just sold.
So this is a way in which Lazada gets profit and earns money. They promote their merchants to sell more products, but at the same time take care that whatever they are selling is up to the mark. Even if they try to increase the sale, they have this thing that whatever product there is selling or is being sold by the merchant is appropriate, and keeps in mind that it is the exact product which the customer wants. As Lazada covers a diverse part of Southeast Asia, their customer also varies and their needs also so, lazada needs to be more careful with the taste of their customer. So that is why it was said that there were special initiatives taken to improvise the merchant businesses. These help the merchants know their tactics well, and to understand their customer needs also. As there are different products with different prices, Lazada makes sure that they are not partial in taking a commission and only take the right amount from a particular product.
LazMalls
Not just local merchants, there is even a platform for the international brands as well in lazada. LazMall is a more luxurious place or a mood-rich version of its core marketplace. Not just the international brands are present here, even the local brands can come and sell their products. It is more like an equal platform for both top-rated online brands and local brands. So this gives a variety of options for the customers to choose from whichever brand they want whether it is local or some international across the globe. As said earlier, LazMalls are a kind of luxurious platform so it has added benefits also like the customers are guaranteed a 15 day return day period and a next-day delivery.
No, as there are different kinds of merchants who want to sell their products in large malls so there are certain screenings that they have to go through to sell their products they have to meet certain criteria so that they can do their branding on this platform. So if they fulfill those criteria they are wholeheartedly welcome to do the selling of their products to the wide customers they’re going to get through that platform. In this case, Lazada charges their merchants 5 percent on every sale they make. There are no if or butts, but they have to give this Commission on every successful sale, and if they are not able to do that, there are high chances of being removed by the platform.
Delivery through RedMart
There was another initiative by lazada that is a grocery delivery startup called RedMart which was acquired by lazada back in 2016, even though the service is just for Singapore for now. However, there are plans which are discussed to launch these delivery startups in other cities as well. Now, these delivery startups can be profitable for lazada because they don’t have to pay extra money to other delivery companies. All the money which these delivery companies get they can receive on their side.
They don’t need to spend an extra amount on other companies for shipment purposes only. so all the processes including in the selling and packaging and delivery of a product it is assured that everything is safe and sound because everything is confined in one company and does not include some other. In the food delivery business model Lazada and RedMart work together, with grocers such as Adyen. So, with taking in hand the delivery processes well lazada gets an extra Commission for every delivery they do and there is a fixed charging so it cannot be ignored.
The LiveUp program
Like in many other companies there is an opportunity for the customers to be premium members likewise lazada also has an exclusive membership program. Lazada’s LiveUp is a kind of program where people can get premium membership and can enjoy various services and even save money. Lazada ties up with other companies so they get a part of the Commission from them as well to advertise them so in an alliance with them it helps for the premium members with certain benefits. There is like a 4% rebate on every last small order. There is even Free delivery on RedMart and sometimes because of the alliance, they get benefits such as two free months of Netflix. There are other partners also which include food panda grab etc., so these customers can pay either on a monthly or yearly basis.
Does Lazada operate and ship internationally?
As said earlier, Lazada it’s a southeast Asian company so they operate there in their home markets. But, recently lazada has even started to enable merchants to ship goods worldwide. This means these merchants now have to take care of a multi-ethnic, multi-cultural kind of population. Earlier they just had to concentrate on the South East Asian culture but now it is not concentrated just on them as there is a worldwide population awaiting for their products. The service in which lazada offers their products worldwide is called lazada global shipping LGS. One more thing that came to notice is that Lazada takes full care of the packaging and transportation procedure.
It means that to gain more profit lazada considers all the shipment and packaging processes and takes it to themselves as it will help in smooth processing. Lazada takes care of all these procedures which consist of the packaging to transport shipping everything, and all they want their margins to consider is the quality of the product and the kind of product they are selling to their customers. As now it has become worldwide or global, there can be a variety of tastes and preferences. Lazada just wants their merchants to concentrate on their activities and customer satisfaction. Being out internationally is not an easy way, so it needs to be taken care of particularly. So now, not just in SouthEast Asia, Lazada is trying to prove itself as a platform and a shopping company for all the fellows out there in international spaces. It is a big jump for the company.
What is the mission and vision of Lazada’s corporation?
The main mission for lazada is to accelerate progress through commerce and technology in Southeast Asia. This was once stated by one of Lazada’s important members at some of their anniversary parties. Initially, lazada was just a platform for online buying but later on the mission to afford lazada should be changed and it wanted to offer technology payment solutions and logistics so that they can accelerate the growth of local businesses and consumers. So this means that lazada wants to become a platform that does not just consider international brands but also gives a pathway for the local communities and businesses to a wide range of customers internationally.
There is a thing called shoppertainment, which Lazada focused on, which means it is just not a search click and buy procedure while shopping. Lazada wants its customers to enjoy the procedure of shopping. They want to create a unique experience for their customers while they do shopping in lazada and it’s not just a normal boring procedure of finding what you get and buying it. As lazada was gradually growing in the international market they could also see a lot of rivalries on their way, like Amazon, eBay, etc. These competitors came along because Lazada being on the international platform and not just focusing on the Southeast Asian regions.
Conclusion
So as we can see lazada started from just being a Southeast Asian company and turned into an international platform for the merchants and their customers. They even have several kinds of the money-making process such as one of them is the lazada marketplace where it is the most core and basic place to shop and for the merchants to sell the products. There are even LazMalls where it is kind of a premium membership to the customers where they get certain benefits as well like fast delivery, here also Lazada takes a chance to get more profit because as the merchant sells one of their products they get 5% of the Commission.
So from both marketplace and the last LazMalls is getting commission from the merchants depending upon the product they sell because the products range from various prices and different categories they Are in. They even have a delivery partner which is called RedMart. This helps them reduce money spending on other companies to ship their products and can get more profits through each delivery. There are even certain alliances they make to different companies through which they are given vouchers and free trials to the customer who’s buying something which touches their category. Now as the company is going international they are controlling the whole procedure from packaging to shipment which enables them to get more profit.
Frequently asked questions
Q1. Does Lazada cost the merchants to sell their products?
Ans. Lazada is an open platform for all the merchants to sell their various kinds of products and they do not charge the merchants to sell their products to the customers. There are various kinds of customers with diverse tastes and personalities so their products also vary. Lazada welcomes all kinds of merchants, and even helps them to increase their business. Lazada takes a commission once the sale takes place, and this commission varies as it depends upon the product that they have sold. That is the only way in which Lazada takes money from the merchants, otherwise, it gives a platform for them freely to sell the products. There are no listing fees, no fixed fees, and no hidden costs.
Q2. Is Lazada into selling fake products?
Ans. Lazada is conscious of the products their merchants are selling. They want their merchants to take the responsibility to sell authentic products. There are certain guidelines that lazada gives and one of the most important are illegally replicated, reproduced on manufactured products are completely against their law and should not be put on sale by sellers. If any seller tries to violate these guidelines, their existence in the platform shall be eliminated. They might not be able to sell any products further on. So it is really clear that lazada does not entertain selling fake products on their platform and only considers true and true quality products because they want their customers to be happy as they see their customers as an important factor for their company.
Q3. Can product photos be not used in Lazada?
Ans. As stated earlier there are certain guidelines for the sellers in lazada and again one of the important ones is that the unauthorized use of images and product photos that is not coming from the right owners shall not be entertained and it is completely illegal and prohibited by lazada. So, it is the whole responsibility of the seller to use their photo of the product and shall also create a listing of the items they wish to sell. This all behavior depends upon the seller, so they need to be more careful while using such international platforms. Now, if some sellers wish to use the photo of others they shall have the permission of the owner of that photo before uploading it in lazada.
