Categories
Business & Commerce

Lychee Farmers in Vietnam
Reap Success with eCommerce

July 15, 2021
By Linh Chi Nguyen

When life gave him lemons, Pham Van Giang made lemonade. Only, in this case, he did it with lychees. Born into a farming family in Hai Duong, a province in northern Vietnam famed for producing the sweet red berry, Pham saw his livelihood threatened when the pandemic broke out. With his usual supply chains disrupted, he turned to Lazada to ensure the fruits of his labour could still reach hungry consumers.

As a proud member of Vietnam’s farming sector, Pham has always looked for ways to help agriculture grow and flourish with the times. To elevate the quality and status of locally harvested fruit, he spent close to two decades developing a large-scale lychee-growing model in his hometown of Thanh Son and encouraged more than 70 households to follow Global G.A.P. guidelines, a trademark set of standards for good agricultural practices. These efforts have resulted in lychees that are plump, luscious and completely clean of pesticide residue.

Hai Duong lychees have been loved by both local and overseas consumers, and the pandemic gave farmers like Pham a chance to explore and expand even further in the domestic market. In May, Pham joined an initiative between Lazada Vietnam, the Vietnam Trade Promotion Agency, the Hai Duong Industry and Trade Department and the Hai Duong Agriculture & Rural Development Department to bring his home province’s agricultural specialities to shoppers across the country via eCommerce.

As part of the National Trade Promotion programme, the initiative aims to spotlight farm-fresh produce from Vietnam’s rural areas and also accelerate the digitalisation of the agricultural sector to ensure its long-term growth.

“Going online is not a short-term decision but part of a long-term strategy, and COVID-19 has accelerated this,” said Mai Xuan Thin, the founder and CEO of Red Dragon, a supplier who helped Pham and many other local farmers take part in Lazada’s initiative.

The initiative marked Red Dragon’s first time using a B2C eCommerce platform, and the results proved sweet, thanks to Lazada’s robust infrastructure, which allowed the platform to transport and deliver fresh lychees from the farms in Hai Duong to customers within 24 hours of harvesting.

Close to half a ton of Hai Duong lychees were sold within the first four hours of them being made available on Lazada, with some orders reaching customers in less than an hour.

Freshly harvested Vietnamese lychees have grown in popularity on Lazada

Mai said that eCommerce has opened new opportunities for Red Dragon and the farmers it represents. “We will continue to bring more Vietnamese agricultural products to Lazada so that domestic consumers can enjoy locally grown yet world-class fruits in the fastest and most convenient way possible,” he said.

“In just a few days of our soft launch of the lychee products on Lazada, we have seen very encouraging results,” said James Dong, the CEO of Lazada Vietnam.

The fruit’s popularity on the eCommerce platform has boosted income for local farmers. Following the success in Hai Duong, Lazada launched a similar initiative last month to support farmers in Bac Giang, another Vietnamese province known for its lychees.

“Leveraging the technology and logistics capabilities and infrastructure that we have, we offer businesses pivoting online during this pandemic advanced digital solutions and services, as well as access to customers and a network that they did not have before,” Dong said. “This is a great start to what we hope will be a long-term collaboration for all the parties involved in this endeavour to delight Vietnamese consumers with delicious, fresh and healthy produce, and boost businesses for local brands and sellers that will help in the overall digitalization of the Vietnamese economy.”

Featured image above: Pham Van Giang tends to his lychee plants in Hai Duong province.

Linh Chi Nguyen is a senior manager in Lazada Vietnam’s public relations team, which is responsible for corporate communications and media relations.

Categories
Social Responsiblity & Sustainability

Building a Sustainable eCommerce Ecosystem
in Southeast Asia and Beyond

July 15, 2021
By Janet Sarah Neo

The outbreak of COVID-19 has led to the eCommerce industry’s explosive growth and this trend is here to stay, with the sector playing a key role in post-pandemic recovery both regionally and globally. But as the growth outlook of online shopping continues to rise, so has attention to topics related to the sector’s impact on people and the planet. As such, it’s become increasingly important for companies involved in digital retail to focus on corporate sustainability to ensure not only the long-term health of the sector but also of the world.

Online Shopping and the Planet

Online shopping offers unparalleled convenience, product assortments and accessibility to consumers. While eCommerce was already steadily growing, the pandemic accelerated its adoption among shoppers. In 2020, there was 15.5% year-on-year growth in retail eCommerce sales in Asia Pacific. In Southeast Asia alone, the online commerce market was worth US$62 billion, over a third of which was generated by new shoppers.

But the convenience of eCommerce comes with certain environmental costs, especially when it comes to logistics operations. According to Forbes, online retail has about four times as many touchpoints as its traditional offline counterpart. Not only is adequate packing material necessary to ensure parcels reach consumers in pristine condition, greater demand for services such as speed deliveries also mean that orders are often shipped in multiple packages. Considered together, these factors can create a sizeable carbon footprint that could, if unchecked, outweigh its benefits over offline commerce.

Digital commerce companies can – and should – lead in reducing this environmental impact. During last year’s 12.12 campaign, for example, Lazada rolled out measures to reduce plastic packaging material or replace them with eco-friendly options. Compared to the year before, we managed to reduce the amount of plastic packaging materials by up to 65% across our regional fulfilment operations. Meanwhile, on Earth Day this year, we partnered with Starbucks to offer Starbucks®️ x Herschel accessories and drinkware made from recycled coffee grounds on LazMall. Our colleagues in the Philippines took further initiative to use compostable materials such as recycled pre-cut cardboard fillers to pack Starbucks products purchased via LazMall.

To raise awareness about sustainability, LazMall featured a line of Starbucks®️ x Herschel products made from recycled materials.

eCommerce and Corporate Sustainability

As eCommerce continues to grow by double digits annually, it is crucial to understand its business operations and the unintended sustainability costs that arise as a result. In 2020, the rise of environmental, social, and governance – or ESG for short – issues on the agendas of stock exchanges, regulators and investors has shown that businesses should factor in sustainability and other non-financial topics that impact valuation.

This is where corporate sustainability comes in. It analyses the risks, opportunities and impact from an integrated perspective within companies’ existing business models and core activities. To this end, a value-chain approach can help map out key stakeholders involved in the eCommerce ecosystem and each activity’s impact on business operations and the surrounding environment and community.

Key to defining the priority levels and impact of many issues within a company is the concept of materiality. A well-done materiality assessment is grounded with in-depth qualitative sustainability intelligence from stakeholders – often drawn from ongoing industry insights shared in interviews and engagements – and allows a business to understand internal and external stakeholder priorities and deliver more strategic actions from value-chain focused and business-ecosystem perspectives.

Materiality in relation to sustainability may be a fairly new concept to many companies but is crucial to corporate sustainability management and therefore needs to be connected and incorporated into other strategic business processes, such as enterprise risk management as well as strategic and financial business planning. Diving into sustainability conversations within the company or the wider stakeholder group may seem challenging at first, but it’s essential for corporate sustainability teams to be able to empower business leaders with professional sustainability frameworks, standards and tools for problem solving and value creation.

Shaping Sustainable eCommerce at Lazada

For the past several months, the discussions that I’ve had with both internal and external stakeholders about online shopping has led to more opportunities to engage with business operations, value chains and the wider eCommerce ecosystem, including platform and digital marketing solutions, logistics, technology, digital financial payments and more. It is important for business leaders to open up cross-company dialogue on sustainability.

On Earth Day in April, Lazada hosted a round-table discussion on Shaping Sustainable eCommerce in Southeast Asia. This leadership session convened more than 60 spokespeople – business partners, customers, financiers, innovators, public policy makers and others – to discuss potential collaborative opportunities and actionable initiatives that could help make eCommerce greener, cleaner and better overall. The event was led by 10 Lazadian leaders, and spokespersons were grouped into five moderated tracks to discuss pressing ESG topics that shape, and are shaped by, Lazada and the region’s eCommerce system.

The five discussion tracks covered sustainability issues arising from operating an eCommerce platform in Southeast Asia.

The roundtable marked the first of many conversations within a thriving and growing thought leadership community. In the weeks and months ahead, we will dive even deeper into many of the actionable insights and partnership opportunities shared during the event. 

As businesses in Southeast Asia and around the world continue the race to triumph over the immediate impact of COVID-19 while also building a better post-pandemic future, there is no better time than now to put sustainability at the core of strategic plans.

Janet Sarah Neo is a Lazada vice president and leads corporate sustainability for the group.

Categories
Business & Commerce

Rediscover, Reposition and
Renovate for Business Growth

July 15, 2021
By Goh Chen Zan

COVID-19 has had a profound impact on every aspect of our lives, from how we shop and how we work to our mental and physical well-being. As the situation continues to evolve, there has never been a more pressing need for businesses to reexamine and reconfigure their strategies. To attain sustainable growth in this changed world, businesses must take a 3Rs approach.

Rediscover Categories

It takes an average of 66 days for a new behavior to become automatic, and after a year of living with COVID-19, we’ve definitely seen the development of some new consumer purchasing behaviors. It is imperative for businesses to discover and embrace these changes. Taking the fast-moving consumer goods category as an example, NielsenIQ observed record growth for products such as cooking ingredients, staple foods and cheeses, as consumers shifted from dining out to eating more at home during the pandemic. Consumers are also downtrading on some categories, like tobacco, while trading up on categories for loved ones, such as their babies, parents and pets. In Indonesia specifically, gifting behavior during the festive season shifted from indulgent products to staple items, according to Kantar.

Other than impacting consumer habits, COVID-19 also redefined the outlook of the FMCG category significantly. For fashion, RedSeer predicts that Southeast Asian consumers will deprioritize style and put more emphasis on function in the future. They’ll also be better disposed to sustainable and preloved products.

Reposition to Grow

Changes brought on by the pandemic have implications to the plans and competitive environments of businesses. As such, companies need to fine-tune their value propositions, pricing and assortments, and future-proof their business models by leveraging technology.

For example, during the second annual collaboration between Lazada and Jakarta Fashion Week last November, many fashion labels and designers leveraged the eCommerce platform to reach wide swathes of consumers beyond their offline stores. The event also included “The Show of Hearts”, a livestreamed Lazada Style Space fashion show that gave participating businesses the opportunity to increase their engagement with shoppers, thereby increasing brand awareness and loyalty.

Fashion labels and designers tapped Lazada’s partnership with Jakarta Fashion Week to connect with style-loving shoppers.

Renovate Strategic Plans

Last but not least, businesses must stay nimble to identify changes and unlock opportunities during and in the aftermath of the pandemic. The ability for businesses to tweak and refresh their strategies effectively will be a competitive advantage.

The long-term social, economic and health impacts of COVID-19 are still unfolding. Although vaccinations are underway, local economies in Southeast Asia are still facing a lot of uncertainties and challenges given the uneven inoculation pace in the region. Businesses need to be prepared and always look out for bright spots in the economy, including new opportunities that come with the rise in demand for online sales and services.

For more business insights, check out the Lazada Insider podcast.

Goh Chen Zan is a vice president at Lazada and leads the research function in the group strategy team.