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Jakarta Post

Lazada Group aims to double freight hubs in Indonesia

  • Khoirul Amin

    The Jakarta Post

Jakarta   /   Fri, March 20, 2015   /  06:46 am

E-commerce giant Lazada Group is set to spend more to develop its logistical system, planning to double its supply hubs in the country by year-end, the firm'€™s country representative has said.

Lazada Indonesia CEO Magnus Ekbom said on Thursday, while marking the firm'€™s third anniversary, that the Lazada Group had secured a total of ¤700 million euros (US$749.4 million) since its establishment in 2012.

Most of the investment was allocated to develop the group'€™s logistical system and human resources, he said.

'€œIn logistics, we'€™re expanding our capacity and we'€™re going to be better ['€¦]. We want to shorten our delivery period,'€ he told reporters.

With more than 17,000 islands that have poor infrastructure facilities, Indonesia poses a challenge for any e-commerce players in expanding their outreach.

'€œHowever, we see it as a massive opportunity ['€¦]. In January, we opened a 12,000-meter-square warehouse in Cakung, East Jakarta,'€ Lazada Indonesia chief commercial officer Rene Janssen said, claiming that it was the biggest that any e-commerce player in the country ever had.

Ekbom said that his company currently had two warehouses in Jakarta and aimed to open new ones in the coming 12 months.

'€œIn addition to that, we will also double our Lazada fleet base stations or supply hubs,'€ he said, adding that his firm currently had around 20 hubs nationwide.

Ryn Hermawan, Lazada Indonesia senior vice president for operations, was quoted by as saying that Padang in West Sumatra, Lampung in Bengkulu, Mataram in West Nusa Tenggara and Kupang in East Nusa Tenggara would be among the intended locations for the new hubs.

Other than adding to its warehouses and logistical hubs, Lazada Indonesia would also give a big push to bring in more international products that were not available yet, Ekbom said.

He went on to say that his firm aimed to have millions of products this year, emphasizing that it added hundreds of thousands of products every month.

While declining to share data on the number of merchants his firm currently had, Ekbom said that the marketplace accounted for 85 percent of Lazada Indonesia'€™s total transactions, a surge from only 10 percent at its commencement.

Lazada runs its business by both becoming both an online retailer and marketplace for other online merchants.

Ekbom said that he was optimistic that his firm would continue to grow in the country as Indonesia had one of the fastest growing e-commerce markets.

He hinted that Indonesia contributed significantly to Lazada Group'€™s total gross merchandise value of more than $70 million last year. Besides being in Indonesia, the group currently operates in the Philippines, Malaysia, Singapore, Thailand and Vietnam.

Indonesia'€™s e-commerce market itself is forecast to grow to $25 billion next year from only $8 billion in 2013, according to e-commerce provider Vela Asia.

A number of e-commerce players, both online retailers and marketplaces, have planned to develop their businesses. Lippo Group has recently launched shopping website and planned to invest $500 million. Existing marketplaces such as Bukalapak and Tokopedia have also secured some new funding.

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