Lazada spending P3 billion to expand operations in Mindanao

MANILA, Philippines — E-commerce platform Lazada is spending as much as P3 billion to grow its operations in Mindanao.

Lazada Philippines CEO Carlos Barrera told reporters that the e-commerce player intends to spend “more than P2 billion to P3 billion” for Mindanao.

“Lazada has been steadily investing in the region over the years. We continue to build our logistics capabilities, drive new buyer engagement, and support local sellers as they establish and grow their businesses online. Looking ahead, we see strong potential in the region and are exploring the possibility of investing over P2 (billion) to P3 billion over the next few years. Any such investment will be guided by market performance and aligned with our strategic roadmap,” Barrera said.

He said Lazada sees an opportunity to grow in Mindanao, which currently has a low e-commerce penetration rate in the single-digit level.

“When we look at the opportunity, it’s not so much about what it accounts for today. But we believe that over time, it should be a sizable percent of our business, (around) 20 to 25 percent. So we’re investing today to build that future growth and to help bridge that e-commerce development gap,” he said.

According to Barrera, the investment is going to marketing campaigns, especially shipping vouchers to make it cheaper for Mindanao customers to shop online.

“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.

Barrera said Lazada is also investing in sellers on the platform.

“We have onboarded more than 500 sellers over the past few months and we’re also investing a lot to help them grow,” he said, noting this is done by co-funding the vouchers so these businesses can gain traction and reduce the cost of their operations.

In addition, Lazada is also investing in infrastructure and the e-commerce ecosystem.

Barrera said Lazada has opened an office in Mindanao and plans to open more hubs.

“We’re also helping with financing options. Together with our partners, we’re giving more buy now, pay later options for the users in the area and even seller financing,” he said.

While Lazada has earmarked an investment from Mindanao, it is also looking to invest in the Philippines through its $100 million fund to support the creator economy in Southeast Asia.

“The Philippines is one of the biggest countries for influencers, especially when it comes to many mobile individuals, people that are recommending things. We have very strong beauty bloggers, mother and baby bloggers, so it will probably be one of the top two countries in terms of investment,” he said.

As Lazada aims for growth, it is set to hold the 6.6 Super Wow Sale, the platform’s much-anticipated mid-year mega sale.

During the mega sale, which will run from June 5 to 8, shoppers can get Lazada vouchers up to P2,000 off, LazFlash deals up to 90 percent off, as well as access to authentic, high-quality products from both top local and international brands on LazMall.