Where Henry Sy is king of retail, Lazada bets on YouTube generation

Joel Guinto, ABS-CBN News

Posted at Sep 04 2018 09:43 AM | Updated as of Sep 04 2018 11:45 AM

A kiss emoji is displayed in front of the SM Mall of Asia. Mark Demayo, ABS-CBN News/File

MANILA -- Bland retail, not brick-and-mortar stores, are dead, the first Filipino CEO of electronic marketplace Lazada said, as he moved to nurture a growing market in a landscape dominated by billionaire Henry Sy's giant malls.

Lazada will open on Sept. 9 its first "mall," a virtual store with 70 million products and a next-day delivery guarantee to help reach its "ambition" of growing sales by 100 percent annually.

Filipinos are looking for a "shopping experience," Lazada Philippines CEO Ray Alimurung said. While mega-brands like Uniqlo are building bigger spaces, online sellers are building channels that blend seamlessly with YouTube viewing habits, he said.

"Bland retail experiences are the ones that are under threat.
Offline will remain, but it will have to evolve," Alimurung told ABS-CBN News.

LazMall, which was announced on Aug. 31 at a members-only club in the capital, is like a high-end mall, Alimurung said. The company is touting a no-fakes guarantee as merchants like Apple and Samsung get to pick who sells their products on the platform.

"Today, the malls are able to give a shopping experience. But as you see, media consumption is shifting online," he said.

"What I see is, kids today are all on YouTube not so much on TV anymore. As you see that shift, we recognize that Filipinos also want an online shopping experience," he said.

Alimurung refused to disclose sales figures but Chinese e-commerce giant Alibaba, which owns 83 percent of Lazada, reported net income of 64 billion yuan ($10.2 billion) in the fiscal year ending March 2018, a 47-percent increase.

Lazada Philippines CEO Ray Alimurung shows the LazMall app on his mobile phone on Aug. 31, 2018. George Calvelo, ABS-CBN News

MALL COUNTRY

Sy, the country's richest man, recently opened his 70th mall in Pampanga province and expansion plans include his native China.

Elsewhere in the world, brick-and-mortar retailers are feeling the heat from online platforms. Toys R Us went bankrupt in the US while Walmart is investing in cloud technology to take on Amazon.

Filipinos gravitate towards malls not just for shopping but to socialize and run their errands. Passport, tax and other government services are also available in malls.

A fast-growing economy and a young population are attracting more retailers to the Philippines, alongside e-commerce firms like Amazon, Alibaba and WeChat.

"It's not one or the other, I think," Alimurung said, when asked what he thought of the Philippines as a shopping mall nation.

"They want to do both. We are seeing every year more and more Filipinos are shopping online. We see the need and we are there to address that need," he said.

Toys R Us in the Philippines is unaffected by its US parent's losing fight against e-commerce. Mark Demayo, ABS-CBN News/File

More than beating traffic jams, Alimurung said he hoped the 24-hour delivery guarantee in Metro Manila would lure customers to LazMall.

"It's a very, very ambitious and bold commitment we are making.
It's one thing to announce that you are going to do it and actually do it," said the former product and vendor manager at Amazon US.

Amazon in the US is experimenting with physical retail with a brick-and-mortar bookstore and pick up points for online purchases.

"I can't speak towards our offline physical, offline strategy. It's not something we're thinking about at the moment," Alimurung said.

"I was there before they started doing any of these offline stuff," he said, referring to his Amazon stint. "I find it interesting. I'm curious to see where they are going with this."