Partnership with traditional retailers is theonline businesses, Lazada's CEO says

September 5, 2022: -E-commerce businesses worldwide enjoyed a boost during the pandemic as people trapped in lockdown went shopping online. Still, James Dong, the CEO of Alibaba-owned Lazada group, said there were plenty of challenges.

“On one side, you have an increasing number of grocery orders, and consumers want to get it in time, and they want to get it fresh, mint condition,” he told CNBC on Thursday.

“On the other side, the supply, the infrastructure, challenges around that. It’s tough to ramp up in a pandemic.”

Dong said that to overcome some of the challenges, the Southeast Asian online marketplace had to “join forces” with traditional retail players.

“For example, we had a partnership deal with Masan group in Vietnam. They have a lot of offline stores, grocery stores, and we work with them give from their store to the consumers.”

In May last year, a consortium led by Alibaba and Baring Private Equity Asia invested $400 million in CrownX, the retail unit of Vietnamese conglomerate Masan.

Dong, who was previously CEO of Lazada Thailand and Vietnam, said that most, if not all, offline players should become partners of Lazada.

“The pandemic accelerates this type of partnership, and we realized nobody can serve all the consumer needs. So we should join forces, put all our strengths together, and then we can serve them.”

Due to pandemic disruptions, global supply chains have stalled due to China’s strict “zero-Covid” policies, bad weather, and labor shortages.

As a result, Chinese tech giants posted their worst quarterly growth in the second quarter of 2022, with internet titan Alibaba, for example, posting its first-ever flat quarterly revenue growth.

Dong said the trend of partnerships between online platforms and brick-and-mortar stores would continue in years to come as businesses try to manage supply challenges.

“The lines amid online and offline worlds it [has] to blur even more,” he added.