Turning point emerges as Lazada turns profitable for the first time

Guangzhou e-commerce headhunters learned that Ali's Southeast Asian e-commerce platform Lazada recorded a positive EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) in July this year to achieve profitability.On the morning of August 13th, Lazada disclosed the above news at an internal meeting.

Previously, Lazada Thailand had become profitable in 2022, making Thailand the earliest Lazada country to become profitable. In that year, Lazada Thailand's total revenue was about 38 billion baht, with a profit of 3.2 billion baht.

Lazada CEO Dong Zheng told Guangzhou cross-border e-commerce recruitment company in an internal speech that the profit proved the effectiveness of Lazada's business strategy, and Lazada will continue to increase its investment in the Southeast Asian market under a sustainable operating model.

In May this year, Alibaba's Q4 and full-year earnings report for fiscal year 2024 had mentioned that Lazada continued to improve its operational efficiency, and in the first quarter of 2024, the quarterly loss per unit narrowed significantly year-on-year. Ali's financial report said that since 2023, Lazada has continued to narrow losses and increase profitability by improving the realization rate, reducing logistics costs, and providing more value-added services.

In addition, Lazada has strengthened its localization operations over the past two years, intensified its efforts to drive the growth of key brands in the Malaysian market, and developed a lot of gaming and entertaining gameplay in the Philippine market, converting users' consumption points into game rewards, redemption of physical goods, and so on.

AI is becoming an important tool for e-commerce platforms to improve operational efficiency.Lazada has taken the lead among Southeast Asian companies in utilizing AI technology.Since May last year, Lazada has successively launched LazzieChat, an AI chatbot for consumers, and AI marketing assistants and advertisement ROI prediction products for operational staff. Public information shows that the conversion rate of consumer inquiries received through LazzieChat and merchant intelligent customer service has increased by more than 30%.

"The Southeast Asian market has passed the stage of large-scale money-burning subsidies, and now the test for each player is how to improve efficiency." A Singaporean e-commerce practitioner said.

China Ecommerce Headhunter also learned that the Southeast Asian market is flooding with more cross-border e-commerce players. In addition to Shopee and Lazada, TikTok Shop and Temu have also entered Southeast Asia in the past two years, and in 2023, TikTok Shop merged with Tokopedia, a local platform in Indonesia, to increase the "bet" on Southeast Asia. 2024 KPMG released a report showing that Shopee ranked first in Thailand's e-tail market with 25% market share, and Lazada ranked first with 25% market share. According to a report released by KPMG in 2024, Shopee ranked first in Thailand's e-tail market with a 25% market share, followed by Lazada with a 22% market share. In recent years, both companies have been changing their "money-burning" mode to fine-tuning operations and improving operational efficiency.

It is worth mentioning that in January this year, Lazada CEO Dong Zheng also served as CEO of Daraz, Ali's South Asian e-commerce platform.