Lazada, the massive Southeast Asian e-commerce platform owned by Alibaba, has recently undergone massive layoffs. While the exact number of layoffs has yet to be disclosed, sources say that hundreds of people could be affected.Lazada currently employs around 10,000 people, and the news of the layoffs caught many of its employees off guard.
Lazada has not confirmed anything related to layoffs at this time, with a spokesperson for the company in Singapore merely stating, "We are proactively realigning our workforce to better position ourselves to work in a more agile and streamlined manner to meet future business needs."
Lazada, was founded in Singapore in 2012. Although the company and the e-commerce industry as a whole were in their infancy at the time, Lazada's GMV surpassed US$1.3 billion in less than three years, enabling the company to experience a meteoric rise to the top, with a presence in Southeast Asian countries including Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, making it the largest e-commerce platform in Southeast Asia at the time.EqualOcean interviews with Thai Consumers observed a marked increase in the frequency of deliveries by Lazada couriers on the streets. It is reported that Lazada has launched the "Speed Delivery" service to improve users' harvesting experience.
Lazada's outstanding performance caught the attention of Alibaba, which in 2016 acquired a controlling stake in the company for $1 billion. Alibaba has high hopes for Lazada and has been investing huge sums of money into Lazada one after another to realize its higher achievements. It is reported that counting from the acquisition in 2016, Alibaba has injected around $7.47 billion (roughly RMB 53 billion) into Lazada, with the most recent injection occurring in December 2023 with an investment of $634 million (roughly RMB 4.5 billion).
However, the Southeast Asian e-commerce market is gradually losing Lazada's position as the number one e-commerce platform as more players enter the market. According to statistics, among the six largest economies in Southeast Asia (Singapore, Malaysia, Indonesia, Thailand, Vietnam, and the Philippines), Lazada's market share is smaller than Shopee's. In 2022, Lazada's GMV is $20.1 billion, while Shopee's total GMV in Southeast Asia is $47.9 billion, which is almost half of the total e-commerce GMV of the Southeast Asia region (99.5 billion), far more than twice that of Lazada.
In addition, since Alibaba took control of Lazada, there have been several changes to its management in the seven years since:
In March 2018, Alibaba's Peng Lei took over as CEO from Lazada co-founder Maximilian Bittner, whose tenure as CEO saw Lazada take part in major marketing campaigns such as "Double 11" and set new sales records.
In December of the same year, Pierre Poignant, co-founder and former COO of Lazada, became the company's Chief Executive Officer. During his two-year tenure, Pierre Poignant further strengthened Lazada's position in Southeast Asia through the use of data technology and business localization strategies.
In 2020, Co-President Li Chun, who has a technical background and experience in localized operations, will become CEO. relying on Alibaba's globalization strategy, Lazada, which has initially built a strong moat of technology, payment and logistics, will further strengthen its competitive advantage.
In 2022, he was replaced by Dong Zheng, the former head of the Thailand and Vietnam business, who also served as CEO of Indonesia. during his tenure, Dong Zheng invested in areas such as infrastructure and logistics and deepened his commitment to Indonesia, Southeast Asia's largest economy. in March 2022, the number of active sellers on the Lazada platform surpassed the one-million mark. In addition, he drove Lazada's expansion in Indonesia, strengthening the company's position in the digital economy.
In terms of Lazada, the management restructuring and the layoffs may be an adjustment and optimization in response to the fierce competition in the Southeast Asian e-commerce market. This measure is aimed at improving the company's operational efficiency, reducing costs, and enhancing its competitiveness in the market.