|What happens when the 'Amazon of Southeast Asia' meets Amazon?|
Uptin Saiidi | @uptin
March 31, 2017
Alibaba-backed Lazada CEO says he isn't concerned yet about Amazon
Often referred to as the "Amazon of Southeast Asia" for its dominance in the region's e-commerce market, Lazada Group has had a busy four years since its launch.
Last year, Alibaba bought a $1 billion majority stake in the company, Lazada acquired online grocer RedMart and it announced a partnership this week with Unilever in an effort help grow its consumer products category.
But Amazon is moving into the region, raising the question of whether the Alibaba-backed regional player can compete with a global juggernaut. But that clash is not yet a concern for Lazada, Maximilian Bittner, the company's CEO, told CNBC on Wednesday.
"It's very hard for me to worry about someone who has not actually entered the market yet and so far they're not here," Bittner said. "I think once they're here, we can start worrying about them."
Amazon recently opened offices in Singapore and there were reports of plans to launch in the first quarter — which have now been pushed back, according to TechCrunch.
An employee at a SingPost warehouse in Singapore
Amazon did not immediately respond to a request for comment for this story.
The Seattle-based tech giant has annual revenues exceeding $100 billion and became the fastest company in history to pass that milestone, according to its founder Jeff Bezos. Its international expansion is often fierce: launching prime services in China, pumping $3 billion into India and most recently laying out plans to launch in Australia next year.
But Southeast Asia has not yet become an e-commerce battleground.
"Amazon will come when they come and we will see, but right now we're very focused and very happy on the partnership with Alibaba and strengthening that partnership," Bittner said.
Lazada and Unilever tag team it in Asia
The region's growth potential may actually be big enough for multiple players — at least in the short term. Online sales account for less than 3 percent of total retail sales in the region, according to market research by Frost & Sullivan. That's a tiny fraction compared to China, which stands at more than 12 percent.
Although the Southeast Asia e-commerce market is projected to reach $25 billion by 2020, many challenges still persist. The region accounts for more than 600 million people in six countries, but each nation has differing infrastructure, regulations and languages.
For now, Bittner said he's focused on bringing on new consumers into Lazada's ecosystem.
"The goal for our partnership (with Alibaba) is for us to get access to the wealth of experience and wisdom from Jack Ma and their leadership team," adding that the Alibaba chairman is highly accessible to him and the management team.
Bittner said his four-year lead on Amazon in the region will be key to Lazada's success.
"Our success in all of the markets that we're in is that we've found the right mix of the assortment that the consumers are looking for and we're focused on building on that experience," he said.