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Lazada COO expects to double sales this year

The 28-year-old Spanish chief operations officer of electronic commerce platform Lazada Philippines, which is now backed by Jack Ma’s Alibaba Group, sees online transactions doubling this year as more Filipinos embrace digital technologies.

Lazada COO expects to double sales this year

Carlos Barrera, who has been with Lazada Philippines for three years now, says he is particularly excited about the 11.11 campaign, or the e-commerce day on Nov. 11, when online sales are expected to double from last year.

“Our rule of thumb is we should be doubling our volumes.  We are quite confident that with the plan we have, we will be able to do that,” Barrera says in an interview at Lazada’s swanky office at Net Park Building in Fort Bonifacio, Taguig City.

Lazada is an e-commerce platform initially funded by Rocket Internet AG of Germany but is now 90-percent controlled by Alibaba Group of China. It focuses on Southeast Asia and established its presence in the Philippines in 2012.

“The first few years of Lazada was about growing the business and setting up the foundation of a start-up e-commerce,” says Barrera.  

Alibaba acquired a 51-percent stake in Lazada in 2016 and raised this to 90 percent this year.  The Chinese group appointed Lucy Peng, one of the co-founders of Alibaba, as chief executive of the Lazada group and Ray Alimurung as CEO for the Philippines, in place of Turkish national Inanc Balci.

“One thing you will find very special about Lazada and Alibaba is everyone is trying to learn and train others.  Most founders of Alibaba are teachers.  They really care about how you train your people, how you are learning yourself, and how you are growing.  So far, I am excited about the role.  I really feel confident that we are in the right track,” says Barrera who was appointed COO in June 2018.

Barrera’s role as COO is how to improve the platform, ensure that sellers are successful and customers find what they want.  He says by using Alibaba’s technology, Lazada has improved its platform to become “90-percent personalized”.  

“Almost everything in there is being constantly updated and learning from you to offer the best products.  If we open the app, none of us will see the same.  This is very unique. We have all the data in the market, what our customers search for, what our customers want, and what our sellers offer.  We mix around 50 to 60 variables of your customer patterns, your browsing experience, your actual orders, to offer you the best technology and best products, and to make sure you find something that is relevant,” he says.

“We want to make e-commerce fun.  We want to make shopping better.  This personalization really increases relevance,” he says.

The entire Lazada Philippines has more than 2,000 employees covering the logistics business and the platform, excluding the BPOs.  “When we look at the platform site, we have around 300 plus people, out of which we break it down into marketing, the admin staff, commercial team, and e-commerce platform,” says Barrera.  “My team is around 110 to 120 people.”

Barrera grew up and studied in Spain and worked in South America and Southeast Asia. “My background is mostly in consulting and corporate finance.  I don’t have that e-commerce background.  Having Alibaba behind us, it is like an e-commerce superschool,” he says.

“I am very grateful to the Philippines.  This is how much I believe in e-commerce in this part of the world.  I came from a different background, from a different place.  I believe that the opportunity in the Philippines is massive and that Lazada is the right company,” he says.

Barrera says he quickly felt at home in the country.  “The moment I came to the Philippines, it was very clear to me.  It is very similar to my culture.  People are always very kind, very friendly.  There is this whole family mindset that I can relate to because it is very, very Spanish.  In the company, we have a very strong community.  We do a lot of activities together.  Filipinos are very outgoing which we really like.  This is something very special.  I am planning to stay here for good,” he says.

Barrera led a two-month preparation for the e-commerce day on Nov. 11, considered the biggest e-commerce event in the world which was started by Alibaba ten years ago. “We have 20 million deals on that day.  To give you an idea, even the largest stores, the largest malls very rarely have half a million SKUs [stock keeping units].  Our website today has 80 million products.  And 20 million products will be at discount, with a minimum of 10 percent discount and up to 99 percent.  We are gonna have all types of products, including one-peso deals,” he says.

Barrera says in the Philippines, 11.11 is the kickoff of the month-long Online Revolution. “For 12.12, we will do a Christmas deal special. So there will be a special section for gifting, for Filipino products like Christmas baskets. 12.12 will be as big as 11.11,” he says.

These big events will put to test the logistics sector in the Philippines, he says.  “The business grows so much that in just one, two or three days, it puts the entire capacity to constraint.  But we also love that, because for us it is a proud moment and it is very exciting for us.  We are prepared,” he says.

“We really put the capacity to the test on a day like this.  When you look at the volumes that we achieve in the millions of orders in just one day, that basically involves the whole process from pickup to warehousing and packing to last-mile delivery.  There is a big, big chain of stakeholders that we need to prepare. One of our main objectives is the shortest delivery time possible.  We offer next-day delivery, even same-day delivery for lots of products. This requires lots of coordination,” says Barrera.

“Our objective really is to send all the items in the shortest time possible with very cheap rates so that it becomes a no-brainer.  We want to grow the online business in the Philippines by reducing the friction,” he says.

Barrera says the Philippine e-commerce sector still has a lot of room for growth.  “Today, it is less than 2 percent [of retail].  We see that number going up to double-digit.  We see it as a market with huge untapped opportunities,” he says.

“This market grew more than 50 percent yearly.  We grew significantly faster than that of course.  Our ambition is to outgrow the market. But we really believe that this is the biggest entrepreneurial opportunity in the Philippines.  Everyone that is offline will end up going online.  This is what happened in other countries, in the US and China,” he says.  “We are very optimistic about the market and definitely, we can see this market getting to double-digit of the retail volume in the next five years.”

Barrera says despite the rising competition, Lazada remains the leading industry player. “We understand there are now more competitors and we expect to have even more because it is a very interesting market and of course a lot of people will follow.  We are still by far the largest player in the Philippines, by most of the public sources.  This means a larger volume of traffic, larger volume of installers base, larger volume of products and larger volume of sales,” he says.

“The value proposition that Lazada offers is very, very different.  Many of the players offer second-hand items.  They focus a lot on customer to customer.   We offer all the global brands with fantastic customer experience, with very fast lead time, with fast delivery, with very good quality...

What we see ourselves is a platform that brings sellers to the top seller levels to million peso sales a month.  This is what we really do.  Our ultimate ambition is to get all these sellers is to grow their business with us and to build a strong, long-term business,” he says.

Barrera says Lazada aims to redefine the retail experience in the Philippines.  “We are all involved in a new way of buying, a new way of selling.  There is a big social empowerment to it.  When you look at what Lazada is trying to do today, we are really making selling and buying as easy as possible, with the smallest friction, in the lowest time possible, with pretty much no cost,” he says.

Lazada COO expects to double sales this year
Lazada Philippines COO Carlos Barrera
“We want to be the most competitive platform for buying and selling. And we are also making it very fun,” Barrera says.

Topics: Lazada Philippines , Jack Ma , Alibaba Group , Carlos Barrera , Online Revolution
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