Lazada Milestone Reflects Evolution of Southeast Asia’s ECommerce Sector

Southeast Asia’s eCommerce landscape has entered a new stage. While the past decade was marked by rapid initial expansion resulting from the region’s growing internet penetration and increased adoption of online shopping, especially in the wake of COVID-19, the market is steadily shifting to a more mature phase of development, and eCommerce players will have to adapt by focusing on a sustainable long-term plan.

This evolution is captured by Lazada, which achieved positive earnings before interest, taxes, depreciation and amortization (EBITDA) this July for the first time.

Speaking at a town hall in August, Lazada Group CEO James Dong said the EBITDA-positive milestone proves the effectiveness of the company’s long-term strategy.

Instead of relying on deep discounts to gain market share at the expense of core profitability, Lazada has focused on creating a scalable and sustainable growth trajectory over the past few years. In particular, the company has been investing heavily in enhancing its user experience and supply chain – two areas that are already paying off and will continue to do so in the long run.

Kulthirath Pakawachkrilers, President of the Thai E-Commerce Association, remarked that Lazada has, throughout its 12 years of operation, transformed from being a marketplace to a comprehensive eCommerce ecosystem that includes online marketing, gamification, logistics, fulfillment and payment services.

Across the region, other industry experts are cautiously optimistic about Lazada’s milestone, with many agreeing that it could boost investor confidence. Commenting on this development, Sunway University’s Gan Chin Chuan said that Lazada is now moving toward a more mature stage with a stable and scalable growth trajectory. Gan also noted that Lazada’s success will “depend on its ability to enable its strategies to adapt to the diverse cultural, economic and regulatory environments of each Southeast Asian country.”

Li Jianggan, founder of consultancy firm Momentum Works, said that in the long term, the push for efficiency and eventually profitability by eCommerce players like Lazada will make “Southeast Asia’s ecommerce ecosystem more robust, platforms more competitive and consumer service levels elevated.”

With Southeast Asia being home to one of the fastest-growing eCommerce markets in the world – the sector is projected to reach a market value of USD186 billion by 2025 – businesses that have strategies in place for long-term financial health and profitability stand to benefit the most.

At the town hall, Dong affirmed Lazada’s confidence in the region and said the company would increase its active investments in Southeast Asia under a sustainable operating model.