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Lazada plans to double warehouse capacity as e-commerce market grows

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By Zsarlene B. Chua
Reporter

SOUTHEAST ASIAN e-commerce platform Lazada has announced plans to double the capacity of its existing 30,000-square meter automated warehouse facility in Laguna “in the next few years” as it expects the Philippines to become one of the top players in the e-commerce industry in Southeast Asia.

“[While the Philippines] is behind some of its neighbors, we foresee that the Philippines will be one of the top players starting with ASEAN (Association of Southeast Asian Nations) and we’re even trying to make it one of the top players in the world,” Inanc Balci, Lazada Philippines co-founder and CEO, told BusinessWorld during an interview on Oct. 18 at the Lazada office in Bonifacio Global City, Taguig.

Mr. Balci said the company is looking to increase the capacity of its automated warehouse facility in Laguna to 60,000 square meters, double its current size and that they also plan to build a Davao warehouse to serve their customers in Mindanao by next year.

Lazada currently offers an estimated 25 million products on its site.

But while the e-commerce industry is growing, Mr. Balci said it will not yet overtake offline retail sales made from brick-and-mortar shops or in malls — and overtaking the malls is not the idea as Lazada is only looking to get a certain percentage from the “P60-65 billion retail industry” go into e-commerce.

And because offline is still king, Lazada has introduced their “online-to-offline strategy” which includes putting up pickup locations in malls.

“We have launched together with SM the pickup locations in SM Makati. You order from Lazada and you can pick up the item from their designated pickup locations.” he said.

The pickup location in Makati was introduced in early October with more pickup locations to be introduced in the next six months.

“It’s very important in terms of logistics costs because Philippines has a very complex geography which translates into high logistics costs and together, the cost is shared between the merchant and Lazada but when you have a pickup location, it costs less because we don’t have to go to the customers’ doorsteps every time,” he explained adding this is “one of the initiatives which will make it cheaper to operate as an e-commerce company.”

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