ZCMA6082 Individual Assignment (10 percent)

Based on the following newspaper article and using the appropriate analytical tools (eg.
Porter’s 5 forces, Porter’s generic strategies, Industry life-cycle, etc.), briefly discuss the
prospect of e-commerce business over the next five years. (Note: no page limit & no
plagiarism please. Deadline: 18/5/2019)

Lazada extends e-commerce edge in South-East Asia despite lull in

overall visits to site
 Monday, 13 May 2019 by sarah dai

The Alibaba-backed e-commerce company scored the highest average monthly active users in
Malaysia, Philippines, Thailand and Singapore. — SCMP

Lazada Group has extended its edge as the most popular e-commerce platform in South-East
Asia despite an overall sequential decline in visits to the site in the first quarter, according to a
research report from iPrice and app analytics firm App Annie.

The Alibaba-backed e-commerce company scored the highest average monthly active users in
Malaysia, Philippines, Thailand and Singapore in the first quarter, and was also among the top
apps in Vietnam and Indonesia, ranking second and fourth respectively behind Tokopedia and
Shopee.

However, Lazada saw a 12% decline in total average visits when compared to the previous
quarter, due to “differences in marketing initiatives” between two periods such as Black Friday,
Cyber Monday and Christmas, according to the report, which was released earlier this week.

1
Shopee, in which Tencent Holdings has a stake through its operator SEA, was the only one
among the region’s top five e-commerce companies to record positive quarter-over-quarter
growth in visits, chalking up a 5 per cent increase in the first three months this year.

The region has often been named as the next big e-commerce market to crack after China, with a
population of 650 million who are relatively young and increasingly shopping online,
reminiscent of China’s consumer demographics less than a decade ago.

The region’s Internet economy reached an estimated US$72bil (RM299.83bil) in 2018, more
than double that of 2015, according to a joint report released by Google and Singapore sovereign
wealth fund Temasek Holdings. E-commerce is the fastest growing sector, expected to exceed
US$100bil (RM416.44bil) in gross merchandise value by 2025 from US$23bil (RM95.76bil) in
2018, according to the report.

Competition is ramping up fast as Chinese Internet giants such as Alibaba, JD.com and Tencent
Holdings seek a bigger footprint in the region. Alibaba has also invested in Indonesia’s
Tokopedia, while Tencent has stakes in SEA, which operates Shopee. Beijing-based retailer
JD.com has invested in Vietnamese e-commerce site Tiki, and joined hands with Thailand’s
Central Group to launch local platform JD Central. It also has a local e-commerce site in
Indonesia.

Chinese and American e-commerce mobile apps remain popular and are actively used in the
region with apps such as AliExpress, Amazon, eBay, Taobao and alibaba.com, the report noted.

Launched in 2012, Lazada first received investment from Alibaba Group Holding in 2016 and
later became a subsidiary of the Hangzhou-based e-commerce giant, which is also the parent of
the South China Morning Post. – South China Morning Post

Read more at https://www.scmp.com/tech/e-commerce/article/3009732/lazada-extends-e-commerce-

edge-southeast-asia-despite-lull-overall#JS2ZAKtxGe8fbjGF.99