We all know that the name of the game in any business is to take the opportunity that has been created either due to something taking place in the world such as an event or something else or maybe because of a regulatory change or similar. We can now tell you that Lazada which is Alibaba’s e-commerce marketplace operating in Indonesia is doing exactly that. You must be aware about a report we did recently regarding the ban placed by Indonesian Government on the social media platforms doing e-commerce transactions on the same platform which they say was hurting local businesses due to foreign imports.
Due to this reason, platforms like TikTok and Facebook that were hosting live stream e-commerce sellers on their platform were banned from the country which meant that they either had to stop those services or risk getting banned completely. Obviously, they decided to do the former and stopped those services and are now operating as social media platforms. The new regulations in Indonesia do allow these platforms to do live-stream e-commerce but they need to have a different platform for that. This is where TikTok decided against it as they know that most of the purchases on their live streams are impulse purchases and no one will take the time to go to another app for the purchase.
Lazada’s CEO, sensing the opportunity, told employees that they will court all the sellers that were operating on these social media apps to sell their stuff. He told employees in a townhall meeting that “new sellers who sign up on their own will enjoy zero seller commission for 3 months, zero free shipping fee for 2 months and 300,000 Indonesian rupiah ($19.19) worth of seller solutions credit”. This is a form of incentive provided to them so they can come to this platform. He said that the regulatory changes announced recently aim to provide “a more positive, healthy competitive landscape for our industry’s long-term growth.” However, we don’t think he will have the same view towards these regulatory changes if it was something that would have affected his platform as well.