Southeast Asian e-commerce is always changing, and Lazada, which is owned by Alibaba, is responding to Indonesia’s recent crackdown on social media sites that help people buy things online by making smart moves. What’s going on is explained below:
Lazada Help for Sellers During Changes in Regulations
Chief Executive Officer of Lazada Indonesia, James Chang, spoke to workers at a town hall meeting and explained how the company plans to move forward. Lazada reaching out to sellers who have touched by the recent changes to Indonesia’s e-commerce rules. Chang said that every Indonesian seller who does video sales on Lazada has not had to pay any fees since Tuesday.
Chang stressed that micro, small, and medium-sized businesses are being helped by changes in regulations and said that Lazada is actively adding these businesses to the market.
Indonesia’s rules and crackdown on online shopping
Indonesia has putting the screws on social media sites like TikTok that used for online shopping. The government wants to protect local companies from the flood of foreign goods that these platforms make possible, which hurts sales in the country. Recent steps include making it illegal to buy things on social media and giving TikTok one week to become a separate app without any shopping features.
As a response, TikTok Indonesia promised to follow local rules and stopped helping people make online purchases.
Even though rules are changing, the outlook is good for Lazada
Chang thinks that the new rules will produce a “more positive, healthy competitive landscape” that will help the business grow in the long run. He talked about some great benefits for new sellers who join Lazada on their own. These included no seller commission for three months, no free shipping fees for two months, and 300,000 Indonesian rupiah ($19.19) in seller solutions credit.
How e-commerce works in Indonesia
TikTok has become a strong player in Indonesia’s online shopping scene, and it is a threat to well-known sites like Lazada and Shopee. In Indonesia in 2022, TikTok had a large gross merchandise amount of $2.5 billion. Experts say that one of the main reasons for TikTok’s success is that it encourages people to buy things without thinking about it.
Market insights says that Lazada has a 10% market share in Indonesia, third only to Shopee (36%), and behind GoTo’s Tokopedia (35%). Indonesia is still an important e-commerce market; in fact, it made up 52% of Southeast Asia’s total gross merchandise value last year.
Rules from the government and long-term effects
Because of the changing rules, the Indonesian government has set a minimum price of $100 for some items that can only bought straight from other countries. People think that this move, along with making goods meet local standards, will help stop foreign companies from being too powerful in the country’s online shopping market.
Citi analysts think that the government will continue to support and give priority to local e-commerce leaders. This is similar to how things done in China, the US, and India.
And then, Lazada representative stressed that most of the businesses and sellers on the site are from Indonesia and serve Indonesian buyers.
Lazada is trying to find a mix between following the rules and making the site a good place for sellers to do business. This is because Southeast Asia’s online shopping scene is always changing.