Southeast Asia's Fully Managed Local Model Welcomes New Benefits To Support Merchants In Local Warehousing

[Ebrun Original] On January 31, according to merchants' feedback, Southeast Asia's leading e-commerce platform Lazada recently held the first ISD (ISC) full hosting event for the 2024 Lazada local store. It is reported that this model will advance localization on top of the existing fully hosted model, requiring participating merchants to stock local warehouses.

It is reported that since April last year, Lazada has been promoting its fully hosted service model: merchants focus on goods and supply, while the platform provides support for operations, logistics, and after-sales services to support going abroad.

The "local store fully hosted model" launched this time is aimed at lowering the threshold for local store operations in the fully hosted model, overcoming the difficulties of licensing, taxation, warehousing, payment, and settlement, and helping more merchants seize local business opportunities, adapting to the vastly different consumer environments in Southeast Asian countries.

Merchants have indicated that this time Lazada's local store fully hosted service supports merchants in opening local stores in various countries and will hand over subsequent operations to Lazada platform.

Merchants who enter the local store fully hosted service similarly only need to be responsible for stocking, storing, and reporting supply prices. The platform will negotiate with merchants based on market conditions, various costs, and target prices to determine the final supply price.

This model still provides merchants with "four major rights":

Firstly, the platform does not charge commissions, no guarantee deposits, and no entry fees;

Secondly, it provides traffic support, enjoying various exposure methods in the traffic matrix, such as Choice-exclusive traffic channel, Bundle & save channel, full free shipping, N-Yuan-N-piece, etc.;

Thirdly, it enjoys various subsidies such as free shipping subsidies, consumer shopping allowances, marketing subsidies, etc.;

Fourthly, official manager 1v1 support is provided to ensure rapid entry and orders.

In terms of logistics fulfillment methods, the platform provides two modes "stocking mode" and "JIT mode" for merchants to choose from for local store merchants.

Among them, the stocking mode requires merchants to stock goods in Lazada's official warehouse in advance, and the official dispatches to consumers after the order is placed, with the platform bearing the corresponding logistics costs. The JIT mode requires merchants to take care of the first leg themselves, preparing the goods in their own warehouse or a third-party warehouse in advance, and dispatching the goods after the order is placed, or the platform picks up and sends them to consumers.

In general, unlike the cross-border fully hosted model, the biggest difference between the local store fully hosted model is that regardless of stocking mode or JIT mode, merchants need to have local inventory in Southeast Asia.

Regarding the qualification for opening local stores, according to various country policies, local entities or individuals need to open local fully hosted stores, and generally, businesses need to have a Southeast Asia local business license, and some countries also support opening shops and settling in with local individual identity cards or passports.

Currently, the local store fully hosted service has been successively launched in Indonesia, Thailand, the Philippines, Malaysia, Vietnam, and other places. This model may further enhance Lazada's local fulfillment capabilities and strengthen the platform's competitiveness in the Southeast Asian consumer market.