Analysis and Recommendation for Lazada and Amazon.

INTRODUCTION[pic 1]

Lazada is one of the largest Southeast Asia e-commerce company that offers products in categories ranging from household goods to consumers electronic, groceries, sport equipment, toys and fashion. User can access the website at www.lazada.com.my. Founded by Rocket Internet in Singapore on 2012, this website now has operated more than five countries around Asian which are Malaysia, Indonesia, Philippines, Thailand, Vietnam and the latest one is Singapore. In April 2016, Alibaba group decided to buy 51% of the controlling stake in Lazada Group and raising their investment up to 83% in June 2017 and officially become the largest shareholder in the group. This is because Alibaba saw the opportunities as South-East Asia market has growing middle class income populations estimated 190 million people in the region with a disposable income of $16-$100 a day to grow to 400 million people in 2020. Based on average monthly web visits, Lazada is recorded to be the largest e-commerce operator in four countries which are Vietnam, Philippines, Thailand and Malaysia on August 2018.

 The key strength or reasons why user is attracted to visit and do the online shopping at lazada is because their sites load fast and integrate with payment providers well. User does not have to wait and waste their time in finding goods as this website is all in one e-commerce stop centre that provide all the things need by consumer. Next, for business owner who wants to use Lazada website as one of their platform to sell their product, Lazada promote a good marketing by creating good code optimized for search engine optimization. This will help business owner to increase the traffic and generate more visitor to promote their product. Having a low cost leadership is also another key strength that Lazada had. The lower the overall cost, the higher chances to reduce the prices of the product. This will attracted more price sensitive buyer to shop at Lazada.

 However, there are also a few weaknesses that need to be improve by Lazada. Firstly, it has limited operated sites as their website is only available for users around Southeast Asia.  Second, their inefficient after sale service have been reported as one of the main issue that lead to customer dissatisfaction. Based on review at lazada-malaysia.pissedconsumer.com/horrible-after-sales-service-20150815683217.html, the customer experienced horrible after sale service as he received damaged and used office chair instead of the new one. What is even worse, the complicated refund process annoyed the customer and make him lose interest to shop at Lazada after that. Lastly, the product quality is not really on the top-notch. As mentioned earlier, Lazada runs on full low cost leadership. This will affect the quality of the product as the decreasing in cost will lead to low outcome of a product.

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Amazon.com is worldwide online retailer, manufacturer of electronic book readers, and Web services provider that became the iconic example of electronic commerce. Its headquarters are in Seattle, Washington. This vast Internet-based enterprise sells books, music, movies, housewares, electronics, toys, and many other goods, either directly or as the middleman between other retailers and Amazon.com’s millions of customers. Its Web services business includes renting data storage and computing resources known as cloud computing over the Internet. In 2007 Amazon.com began to sell its own Kindle e-readers, which helped energize the e-book market. In 2011 the company introduced a related low-cost tablet computer, the Kindle Fire, and by 2012, the Kindle Fire was estimated to constitute 50 percent of the tablets sold that used Google’s Android mobile operating system. Amazon.com facts show it took almost seven years for Amazon to start making any real money. It was January 2002 before it reported its first profitable quarter, making a modest $5 million. In late 2015 Amazon reported that it had more than 270 million active customer accounts worldwide and was shipping to more than 75 countries. Amazon is ranked 3 in Fortune Magazine’s World’s Most Admired Companies.

As for amazon, their strength is having efficient distribution chain and logistic by make sure every process is going through will be planned out. Amazon understands too well that depending on third-party logistics would just lengthen the product delivery time. That’s why Amazon mostly uses its own delivery vehicles for same day delivery or one-hour delivery options. Amazon’s own warehouses are strategically placed, moving closer and closer to main metropolitan areas and city centres. As a result, it uses a pure push strategy for the products it stores in its warehouses. On the other hand, it uses a pure pull strategy when it sells the products from the third party sellers. Next, amazon has great strategic acquisition. Based on Forbes, CEO Jeff Bezos says Amazon rests on the three pillars of Amazon Prime, Amazon Web Services, and Marketplace, and the company’s acquisition strategy is designed to support each. This means Amazon is shifting to a more proactive stance to fuel its Artificial Intelligence and enterprise ambitions. Third, Amazon have huge number of third party seller. Third party sellers are mainly attracted to because of the high volume of traffic on Amazon sites. They often offer products that are not available through Amazon’s retail division.

        As for the weaknesses, amazon faced product failure as not all the products made by Amazon have not been a huge success like Kindle or Alexa. Some of its products have also failed in the past. Technological development is happening at a fast rate and amid the huge competition sometimes all their products are not successful as they expect. Secondly, fake reviews problem. According to a newly published BuzzFeed report, “a vast web of Amazon review fraud lives online, and it’s designed to evade the company’s efforts to thwart it.” This will pose a threat to amazon’s business as customers will have the trust issue regarding the distrust reviews. Third, counterfeit problem. As mentioned earlier, amazon has huge number of third party sellers in their marketplace. The retailer’s sales volume and the hefty profits that counterfeiters can make, it’s no surprise that counterfeit products are still available on Amazon.

KEY ELEMENTS

LAZADA

Infomediary

Lazada gather all possible information about consumers and analyze infomediary data to sell new products that satisfy emerging needs. Lazada also act as middle man where their provide customer’s reviews and rating for every product sold in their website

E-Distributor

Lazada is one of the distribution platform as they have connection with seller and buyers. They help seller promote their product and morph them into e-marketplaces. They have the potential to become significant players in the business-to-business (B2B) space. Called as e-distributor, Lazada will be able to reap the rewards of a rapidly growing ecommerce market.