Introduction to Fulfillment by Lazada (FBL)

Q4/2016

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 1
Introduction to Fulfillment by Lazada (FBL)

 What is FBL

 Why FBL will help you

 How to join FBL

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 2
What is fulfillment by Lazada?

YOU SELL IT, WE SHIP IT

Fulfillment By Lazada (FBL) is a hassle free fulfillment solution

provided by Lazada to our local sellers

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 3
How does FBL work?

End-to-end fulfillment solution

You send Lazada Customer Lazada takes Lazada delivers Return

products to the stores your purchase care of the products to management
Lazada products your products pick & pack customer handled by
fulfillment Lazada
center
Full flexibility to only use FBL
for parts of your assortment

Lazada will be responsible for your order fulfillment

We store, pick, pack & deliver all orders for you

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 4
Introduction to Fulfillment by Lazada (FBL)

 What is FBL

 Why FBL will help you

 How to join FBL

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 5
With FBL you will sell more while reducing your cost and
complexity of operations

1 • Conversion rate is higher for products on FBL

Grow sales • Benefit from combined shipping with other FBL and Lazada products
• Customer satisfaction is higher with FBL and leads to repeat purchases

2 • SKUs are eligible for Express and Postal delivery and all related
Improve marketing promotions
• Better boosting increases visibility on the Lazada website

3 • Improve shipping economics with “Buy More Save More” and Postal
Save cost • No fixed cost for rent and labour
• Only variable cost of RM1.99 (before GST) per item delivered

4 • Unlimited Order Volume Limit (OVL) for FBL SKUs

Simplify operations • No penalties (for cancellations, fake RTS or wrong/incomplete items)
• Faster payment

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 6
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Customers are more likely to buy FBL items because they
value shorter lead time and higher reliability

FBL delivery is up to 1.5 days faster Conversion rate increases across categories

End-to-End delivery lead time (days) 3 months conversion rate

2x
4.3 4.3 4.3
3.9 7.3%
3.6
1.5 6.1%
3.4
5.3%
3.2 3.2 3.1
2.7 2.8
2.3 3.8%
3.2% 3.2%
2.6%
Customers see the faster 2.0%
lead time promise on the
product page

Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Home & Living Baby & Computer & Sports &
Toddler Laptops Outdoors

FBL Dropshipment FBL Dropshipment

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On-site marketing exposure will be higher for your FBL
products

Boost your search ranking and participate in exclusive

campaigns, e.g. for Express Delivery!

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 8
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FBL SKUs join our “Buy More Save More” shipping fee
program across all FBL and Lazada products

Customers are encouraged to buy more

• For purchases below RM100 customers will

bear part of the shipping fees
• For purchases below RM100 the merchant will
only bear a maximum of RM2.00 to West and
RM5.00 to East Malaysia
• Above RM100 full shipping fees will be borne
by the merchant
• Customers are offered a cheap Postal shipping
option for small items
• Customers can pick from all products in the
warehouse, i.e. FBL and own Lazada products

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3
FBL SKUs is entitled for COD – Cash on Delivery

What is COD?
• COD stands for Cash On Delivery. With this
payment method, customer can pay in cash
to the delivery agent upon receipt of their
order.

How will COD benefit the merchants?

• Competitive Advantage & Increase Sales:
Offering the service as a differentiator with
respect to competition.
• Increase wider market: Reaching a wider
base of customers such as students,
housewives etc., who typically do not have
credit/debit card/online banking.
• Win trust and gain loyalty: Customer often
has higher level of trust for seller on COD
payment option and will to buy from them
over those that don't

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 10
FBL SKU is entitled for Express Shipping

Shipping option Delivery Time Fee Eligible areas

Peninsular Malaysia selected areas only
- Order before 1 p.m. delivery is same day
by 9 p.m. All orders after 1 p.m. will be
delivered on next working day before 9
p.m.
Only available
- Only valid from Monday to Saturday
Minimum shipping fee is for certain
1-day / Express excluding Public Holiday
RM7.00 per item & areas in Klang
Shipping Kuching selected areas
subject to parcel weight. Valley &
- Order before 12 noon delivery is same
Kuching
day by 6 p.m. All orders after 12 noon will
be delivered on next working day before 6
p.m
- Only valid from Monday to Friday
excluding Public Holiday
Available for selected areas in Johor and
Penang
- Orders placed before 6 p.m. are Only available
Express Delivery Logo Minimum shipping fee is
Next Day / Express processed for next day delivery. Other for certain
RM7.00 per item &
Shipping later than that will be processed the day areas in Johor
subject to parcel weight.
after & Penang
- Only valid from Monday to Saturday
excluding Public Holiday

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FBL only charges you an all inclusive fee per item and
eliminates all your fixed operations cost

Includes manpower for pick & pack

FBL charge

RM1.99
Includes cost for packaging materials
ex gst
per item

Includes storage cost (rent, utilities, insurance)

Direct delivery from your supplier to the Lazada fulfillment center

can reduce cost even further

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 12
FBL shipping and fulfillment rate card Subang warehouse (item weight and value)

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 13
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FBL simplifies all of your operation processes to make your
life easier

Full flexibility to put only parts of your assortment on FBL

No penalties for cancellations, fake RTS or wrong product sent

Easier returns management as re-sellable items go directly back into stock

Unlimited Order Volume Limit (OVL) for FBL SKUs

Faster payments

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 14
FBL success stories range across local merchants and large
international brands

Local electronics merchant Small local merchant International sports retailer

Cancellation rate FBL share of total orders Orders per week
1,000
10% 60%
40%
250
0% 70

Dropshipment FBL Seller Week 1 Week 6 Week 12

rating

• Electronics seller had long lead • Small local merchant with limited • FBL as stepping stone into e-
time and high cancellations storage space and fulfilment commerce in Malaysia
• Customer did not trust low seller capacity; 200 orders per week • Growth to 4-digit orders per week
rating, despite high quality products • Top 30-50 SKUs are on FBL within 3 months
• Ramped up sales from 30 to 250 • Higher FBL commitment increased • Perfect operations performance
orders per week with FBL seller rating with 0% cancellations

FBL solved high cancellations FBL helped to grow sales with FBL managed the transition
issue and boosted sales limited operations resources from offline into e-commerce

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 15
Introduction to Fulfillment by Lazada (FBL)

 What is FBL

 Why FBL will help you

 How to join FBL

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 16
How to move to FBL?

Joining FBL is easy!

• If you wish to join FBL, let us know and we firstly check if your contract
already covers FBL services; If not, a brief addendum needs to be signed
• Lazada will contact you and suggest you a first order of items to be sent
to the fulfilment center; If you agree with the items and the quantities, you
just need to approve the order on Seller Center
• Lazada will contact you on a regular basis and coordinate future
replenishment orders to make sure that your products are never out of
stock
• The management of FBL is quite easy for you! Seller Center provides full
control to issue replenishment orders, check stock levels, retrieve stock
back and manage your products
• Orders, shipments and returns will be fully managed by Lazada

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 17
What changes?
Your life just got easier

Dropshipment

Upload products You You

Manage prices You You

Update stock You

Process orders You

Ensure 3PL pick-up You

Focus on selling your products and let Lazada do the rest

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 18
I have a question!

No! Actually, with FBL you avoid additional personnel, packaging

? Is FBL expensive? ! and WH costs for the fulfilment of your orders
If I sell products through FBL, can I still sell other products through Yes! You can sell your products through different fulfilment models
? drop-shipping? ! simultaneously
Yes! All FBL products are fully covered by Lazada’s insurance
? Are my FBL products covered by insurance? ! (against loss, damage, fire, etc.)
Generally, 24 hours, but if the documents are incorrect or the
? How long does the inbound take? ! packaging is faulty, it can take longer
No! With FBL, Lazada helps you to optimize your stocks and avoid
? Does FBL mean that I need more stock? ! unnecessary inventory costs

? Do I need to update the stock on SC? ! No! Stocks will be automatically updated by Lazada

Can I get my products back from Lazada’s fulfilment center? How Yes, through Seller Center In 7 business day you are free to
? long does it take? ! collect the product from our fulfilment center
I need to match the product serial number with the Customer Yes! Lazada’s WH team can track this information and share it
? order. Is it possible with FBL? ! with you

? Can I monitor my stocks and my returns? ! Yes! You can monitor your stocks and returns directly on SC

The returns policy remains untouched by FBL. However, if an item

? Do I receive the Customer Returns? ! is in good condition it will be stored back in the fulfilment center
This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 19