Lazada to construct new warehouse in the north

Published May 1, 2019, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

Lazada, southeast Asia’s leading one-stop shopping and selling platform, is expanding in the Philippines with the establishment of a fifth-generation warehouse somewhere north of Manila to cope with the growing business as more Filipinos are now going digital for their purchases for consumer products, particularly fashion.

Lazada Group CEO Pierre Poignant said in an interview that they are still finalizing the location for the new warehouse.

“Yes, we are expanding north of Manila,” said Poignant adding that they plan to start the construction of its biggest warehouse this year. Construction could take a couple of years, he said. As a fifth-generation warehouse, Poignant said the facility would be technology-driven employing more automation than its current fourth generation facilities.

In addition to the new warehouse, Lazada is also set to open its new next generation sorting center in Laguna.

At present, Lazada operates three warehouses in Laguna, Cebu and Davao. It has also 50 logistics hubs where they dispatch orders and one big sorting center in Tanyag, Taguig.

Lazada has also piloted in the Philippines its e-trucks for delivery services, which can carry 100-kg cargo. “We can scale that up and makes sure we have green delivery,” said Poignant, who said that the Philippines plays a lot of roles when it comes to piloting in the logistics area.

“I think we invested a lot in the past and we continue in the future,” he said. For the delivery of its products, Lazada operates a mixed of logistics services both in-house and outsource as they have created a network of partners.
Logistics is one of the biggest investments aside from infrastructure for its warehouses and hubs.

Poignant, one of the founders of Lazada, said the integration of the company with Alibaba, which acquired them in 2016 has been completed smoothly. The Lazada has transformed into a more powerful e-commerce platform using the Alibaba technology making it very easy to navigate the app for customers and sellers.

They also changed the way they do customer care in the Philippines with a new group introducing artificial intelligence technology. They have also localized the way they do customer care as they bring in a new job for AI trainors.

Lazada does not breakdown numbers in terms of territories but said they are still at the beginning of e-commerce in the Philippines, but they expect hundreds of thousands of sellers getting on board. He said both sellers and buyers are very strong in the country.

Although Metro Manila still accounts for the bulk of sales because they invested more for logistics, Poignant said there is a strong growth coming from the tier 4- tier 5 cities in the provinces. What is unique in the Philippines is some customers do not have exact addresses but its technology has addressed that challenge by allowing customers to put in directions to ensure fast delivery of orders.

Poignant also shared success stories of some merchants when they listed in Lazada. Listing in its platform though is free. All a seller needs to produce is a valid government ID, absolutely free.
“You grow your business and provide a good customer experience and we give you tools to digitalize and grow,” he said. Lazada does not give exact figure as to how many local businesses have come on board the Lazada platform, but it is in the tens of thousands.

Lazada is also keeping the cash on delivery payment option since most of their customers pay in cash. Since the COD mode of payment can be very inconvenient for both sellers and buyers, Lazada is pushing its wallet feature where customers can use to pay their purchases, where the bulk and the fastest growing is fashion.