Lazada investing P2 billion to grow in Mindanao

By Justine Irish D. Tabile, Reporter

E-COMMERCE platform Lazada Philippines plans to invest at least P2 billion to expand its footprint in Mindanao, with the goal of making goods cheaper for consumers.

“We always earmark an amount and then spend depending on the actual results. But we’re definitely looking at spending billions of pesos in Mindanao this year,” Lazada Philippines Chief Executive Officer Carlos Barrera said on Monday.

“It will depend on the region. It will depend on the exact detail, but definitely between one thing and another, several billion. More than P2-3 billion for sure,” he added.

He said that Mindanao has the lowest e-commerce penetration, which is in the single digits.

“When we look at opportunity, it is not so much about what it accounts for today, but we believe that over time it should be a sizable portion of our business at 20-25%,” he said.

“We are investing today to build that future growth and to help bridge that e-commerce development gap,” he added.

He said the investment will be geared towards making buying online cheaper in the region through promotions and vouchers.

“Historically, the cost of delivering items to Mindanao was the highest in the country. So, we have been investing a lot, and we have been able to lower the cost of shipping by more than P40 per order,” he said.

“That’s one of the big investments, and we’re also investing more in online marketing and installation campaigns, trying to get more of the users to test out e-commerce,” he added.

Meanwhile, a portion of the investment will help sellers in Mindanao gain more traction and reduce their cost of doing business.

“We set up an office, we have dedicated account managers, a dedicated team there, and we are incubating a lot of sellers. So we give them different packages to help them grow,” he said.

“We have onboarded more than 500 sellers over the past few months, and we’re also investing a lot to help them grow. So, for example, what we will do is co-funded vouchers and commission waivers,” he added.

Lazada will also be investing in logistics and financing in Mindanao.

“We are opening more hubs. We are growing our own logistics ecosystem there. We are also helping with financing options; together with our partners, we are giving more buy now, pay later options for the users in the area and even seller financing,” Mr. Barrera said.

The company also identified the Philippines as among the targets for a $100-million investment in the creator economy.

Asked how much will be allocated for the Philippines, he said that “it will depend on the performance of the influencers. So we earmark an amount, and then we spend based on performance.”

“The Philippines is one of the biggest countries for influencers,” he said. “We have very strong beauty bloggers, so the Philippines will probably be one of the top two countries in terms of influencers.”

The other leading countries are Thailand and Indonesia, he said.

On Monday, Lazada announced its mid-year sale, known as the “6.6 Super Wow Sale,” during which shoppers can tap vouchers for up to P2,000 off and LazFlash deals of up to 90% off between June 5 and 8.

“Beyond the discounts, Lazada is redefining online shopping through AI-powered experiences and our Authenticity Guarantee, delivering the best prices on quality assortment and a more personalized shopping experience through tools like LazzieChat,” according to Mishie de la Cruz, commercial director for electronics at Lazada Philippines.

“Shoppers can also look forward to a worry-free experience this 6.6, with Lazada’s easy and convenient returns process, including the Change of Mind option that’s available for most product categories,” Joey Bienvenida, commercial director for fashion at Lazada Philippines, said.