CEO of Zalora Indonesia: Product Differentiation Becomes Important When Competitors Focus on Price

Being in the shade Global Fashion Group (GFG), company fashion commerce Rocket Internet "Zalora" in particular has made Indonesia its biggest market after launching in 2012. They claim that up to now they are still showing positive growth.

To DailySocial.id, CEO Zalora Indonesia Anthony Fung explains the business plan and current and future fashion trends.

Fashion industry growth

If we talk about five years ago, most of the fashion industry was still dominated by brick and mortar. Starting from department store to template, sells a lot of fashion products whose choices are determined directly by the distributor. However, the industry has undergone drastic changes. No longer relying on shops offline, but all processes, choices to consumer options, merchant and principal become more seamless pattern done by online.

The rapid growth of internet penetration in Indonesia is one of the reasons why Zalora is currently still experiencing growth and presenting many product categories. Not only local fashion products but also brand global.

"Currently some brand those present in Zalora don't have a shop offline. Prioritizing the concept of Direct to Consumer all brand These companies sell their superior products through Zalora. Not only brand local, but also foreign," said Anthony.

Some brand from the United States which is currently available and can be easily accessed by Zalora customers such as Abercrombie & Fitch and GAP. According to Anthony, both brand The company does not have a physical store in Indonesia.

In particular, Zalora currently wants to position themselves as more than just a retail, but a digital platform that provides products not only for fashion but also for lifestyle, beauty and luxury.

"We also offer a good customer experience from search to purchase through browser up to application. By providing supply and demand to consumers and merchant, said Anthony.

Demographically, Zalora's current customers consist of 60% women and 40% men. Different from platform fashion commerce another that only focuses on women, Zalora claims to have a number of loyal buyers who come from among men. One of the reasons is their quality sports products and is brand Trusted.

"We have established strategic cooperation with various companies sports brand. One of them is NIKE, which is the choice and is in demand by most Indonesians," said Anthony.

Pandemic and changes in customer habits

During the pandemic, Zalora noted that there was an increase in the number of requests for certain categories. Rules for working from home and restrictions on activities offline turns out to have added purchases to the "Stay at Home Clothing" category. Among others are t-shirt, sandals, clothing and sports products, to beauty.

For brands luxury or those that fall into the category of luxury goods are also much sought after by customers. Meanwhile, fashion products for formal events, such as batik, party wear, and other formal wear, have decreased. Overall Zalora claims to continue to experience very good growth during the pandemic.

Zalora also noted that during the pandemic their customers in Indonesia experienced significant growth. The pandemic that has accelerated the acceleration and adoption of digital has made most Indonesians accustomed to shopping online.

"Before the pandemic, only about 5-7% of Indonesians were shopping online online, during the pandemic that number increased to 20%. Beating Singapore, which was previously the largest country for online shopping activities," said Anthony.

The strategy launched by Zalora is to strengthen supply local products. While on the other hand Zalora also brought brand from countries such as Hong Kong to Malaysia to bridge the needs of sellers and customers in Indonesia to access various brands from that country.

After doing IPO In 2019, Zalora, which is part of their parent company Global Fashion Group (GFG), did not do much business maneuvering or provide fairly routine information to the media. Adjusting company policies that have been go public, this step was deliberately done by Zalora. However, innovation and options to deliver a diverse range of products continue to be a part of The roadmap Zalora now and in the future.

"Product differentiation is important for us, because most similar players only focus on price and selling products from Indonesia seller the same or business horizontally. We focus on the vertical side of presenting products that are different and not available on other platforms, supported by our parent company Global Fashion Group," said Anthony.