In this week's spotlight, we check in on Lazada and its efforts to emulate the success of parent company Alibaba, as it wraps up its month-long online shopping festival on the 12th of December.

Headquartered in Singapore, the Southeast Asian e-commerce operator first introduced its own 12.12 Online Revolution event in 2012 in the hopes of replicating Alibaba's Singles Day festival, held annually on November 11.

The Chinese internet giant had seen the online shopping bonanza expand each year, culminating to a record-breaking gross merchandise value (GMV) of ¥168.3bn (£19.22bn) just last month.

Significantly smaller in comparison, in 2016 Lazada clocked USD$40.5m (£30.13m) in GMV at its 12.12 event as well as involved more than 1,000 brands and 55,000 sellers.

This year, however, marked the first cohesive efforts to tap its parent company's expertise, technology, and wider ecosystem since Alibaba purchased a controlling stake in April 2016 for USD$1bn (£743.97m). In June this year, this investment was increased by another USD$1bn to give Alibaba a 83% stake in Lazada and help boost the latter's expansion plans across Southeast Asia.

This year's 12.12 festival commenced alongside Singles Day and showcased products from 3,000 brands across six countries in which Lazada operated: Singapore, the Philippines, Thailand, Malaysia, Indonesia, and Vietnam.

Similar to Alibaba's launch, Lazada also held a live variety show in Thailand on 10 November that featured games and a fashion show as well as deals and flash sales available at the online shopping festival. Another live finale event was held in Indonesia on 12 December.

Such efforts were part of Lazada's aim to identify the smartest ways to integrate Alibaba's ecosystem whilst ensuring these remained relevant to the region it supported.

Max Bittner, CEO, Lazada

Lazada CEO Max Bittner said: "It's very dangerous for us, in a market that is less mature, at a company that is much younger and much smaller, to see all of these amazing things at Alibaba and start behaving a bit like a kid on a sugar rush running through a candy store."

Lazada had started to tap its parent's search and data-driven tracking capabilities in a bid to deliver a better customer experience and offer merchants deeper consumer insights. It also worked with Alibaba to implement chatbots, powered by artificial intelligence, to help address customer queries.

Payment and logistics, however, proved more challenging across the disparate Southeast Asian markets. This meant Lazada had to tweak Alibaba's technologies and models to meet the region's unique requirements. These included securing individual agreements with more than 100 local and cross-border logistics partners and leveraging Alibaba's own logistics subsidiary, Cainiao, to establish a more efficient delivery system.

Lazada also was working with another sister company, Ant Financial, to deploy e-wallets and support an infrastructure that offered various payment modes including e-payments and cash-on-delivery.

With just 3% of the region's retail conducted online, Bittner said there was significant untapped opportunities in Southeast Asia.

'Booming' e-commerce marketplaces in Southeast Asia

Incidentally, his assessment is echoed in a separate report released by Google and Temasek Holdings, called 'e-Conomy SEA Spotlight 2017'. Covering the six largest markets in the region (Indonesia, Malaysia, Philippines, Singapore, Thailand,
 and Vietnam) the research paper is based on Google's data, analysis from Temasek, as well as expert interviews and secondary data sources.

According to the report, the region's e-commerce market was projected to hit USD$11bn (£8.18bn) in GMV this year, up from USD$5.5bn (£4.09bn) in 2015. This figure included business-to-consumer (B2C) sales and marketplaces on which firsthand goods were sold, but excluded consumer-to-consumer (C2C) marketplaces.

"Consumer interest for e-commerce has grown quickly across Southeast Asia, with Google Search interest for e-commerce brands growing more than twofold in two years", the report noted. It added that this momentum was further fuelled by promotional activities and marketing investments
from major regional and global e-commerce players as well as co-marketing initiatives with top brands in consumer electronics, fashion, and consumer goods industries.

E-commerce activities in the region also were driven by the emergence of marketplaces on which small and midsize businesses sold to consumers on mobile-first platforms. The report pointed to the likes of Lazada, Shopee, and Tokopedia, providing platforms where "the long-tail of smaller retail players can transact online and reach new consumers within and beyond Southeast Asia".

Furthermore, the region's mobile online users were amongst the most engaged worldwide, clocking an average of 140 minutes per month on such platforms. In comparison, their counterparts in the US spent just 80 minutes per month on their respective marketplaces.