Lazada Group is making plans to integrate e-supermarket app, RedMart, into its e-commerce platform in a bid to tap Southeast Asia's burgeoning online grocery market that is estimated to be worth US$309 billion by 2021. The move comes more than two years after it acquired RedMart in November 2016 and will see Lazada expanding the Singapore-based online grocery service to at least one other market in the region by second-half 2019.
However, details on how inventory and logistics will be supported in the various markets outside of Singapore remain scant, at least for now, as the company works to tailor its approach in the different Southeast Asian market.
Lazada said Thursday that the RedMart app will be folded into its platform from March 15, so customers looking to purchase the e-supermart's inventory of 165,000 products will have to do so via the Lazada app. The e-commerce operator pledged to provide current RedMart customers similar design, tools, and functions when the app moved to the Lazada platform and would maintain the same browsing and ordering process. They also will have the additional option of paying for their oder via the Lazada Wallet.
Lazada's Singapore CEO James Chang told ZDNet: "All RedMart-specific features will gradually be moved to Lazada and the shopping experience for customers will be exactly the same... Orders on the new platform will continue to be fulfilled by RedMart in customers' chosen two-hour delivery slot."
Due to data privacy regulations, however, payment and credit card details will not be part of the migration to Lazada, Chang said. Customers will receive a notification, from February 1, prompting them to opt-in and allow their purchase history and order lists to be migrated to the Lazada platform, he said, adding that this will enable RedMart customers to more easily re-order previously bought items.
He noted that customers' purchase history spanning the past one year, as well as order lists and cart contents, will be included in the migration to the new RedMart segment on Lazada.
Asked about the timeframe for the launch of RedMart's service in other Southeast Asian markets outside of Singapore, Chang said that Lazada is looking to expand the grocery services to at least one other city from the second half of 2019.
On how Lazada was looking to ramp up RedMart's inventory and last-mile delivery service across the region, he said: "RedMart's success is unique to Singapore. As the geography, population demographics, buying habits and logistics networks are different across the region, a different or customised approach will be required. The synergies of RedMart's and Lazada's expertise will be leveraged to come up with the most suitable strategies relevant to other parts of the region."
According to Lazada, consumers in the region increasingly were buying their groceries online, with shoppers filling their baskets more than twice a month. It added that, in Singapore, seven in 10 consumers who purchased their groceries online did so via RedMart.
Lazada's co-president Jing Yin said in a statement: "We want to drive the evolution of grocery shopping in the region by combining our assortment of products and logistics network to transform the way customers get their daily essentials and fresh produce. Most of us shop for groceries and other household items very frequently. This presents a unique opportunity for Lazada to be part of our daily lives."
RedMart's co-founder Roger Egan was appointed Lazada's head of supermarket to help lead the company's expansion efforts in Southeast Asia, where he would oversee the launch and operations for the supermarket business and delivery network across the region.
Lazada acquired RedMart in November 2016 for an undisclosed figure and months after, Lazada itself was acquired by Chinese e-commerce giant, Alibaba Group, in a deal worth US$1 billion. The latter continues to invest heavily in expanding its Southeast Asian footprint, pumping in more than US$4 billion to date. Launched in 2012, Lazada currently operates in six Southeast Asian markets including Thailand, Vietnam, and Indonesia.
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