Lazada Logistics Strengthens Commitment in Indonesia, Participates in Delivery Accommodation from Other Platforms

Lazada announced a name update for its logistics unit to "Lazada Logistics", previously known as Lazada eLogistics (LEL) and Lazada Express (LEX). LEL manages fulfillment and logistics with third-party logistics providers, while LEX handles package delivery to customers.

"Rebranding This reflects the significant developments we have achieved over the years with the support of our human resources and technology," said the CEO Lazada Group Chun Li.

Along with this, Lazada also expressed its seriousness in working on the logistics sector E-commerce in Indonesia. This is based on the results of their research in Q4/2020, 65% of respondents from MSMEs that have not been digitized stated that logistics is one of the biggest challenges.

"Lazada Indonesia is a logistics pioneer E-commerce since 2015 and since then [..] We have helped build connections between brand and sellers with customers across Indonesia for the past six years, and will continue to do so in the future," said Lazada Indonesia Chief Logistics Officer Philippe Auberger.

Introduce multi-channel service

Through rebranding In this case, Lazada Logistics also introduced services multi-channel logistics (MCL), which provides a single stock fulfillment solution to help e-commerce enablers and brand. They will fulfill and deliver all orders, whether they come from transactions on Lazada or from the platform E-commerce other.

The mechanism, Lazada will store the products E-commerce from partners and merchant, so that the efficient handling and delivery of orders through the owned fleet, third party logistics partner, or other designated fleet can be done.

MCL is claimed to allow users to manage flexibility and agility in inventory control, and avoid high costs for maintaining warehouse infrastructure and shipping fleets.

Lazada Logistics has operated 400 facilities consisting of warehouses, sorting centers, and hubs. Lazada Indonesia's main warehouse is located in Cimanggis, West Java, occupying an area of ​​70 thousand square meters.

Owned logistics business E-commerce

Not only Lazada has finally built its own logistics infrastructure. JD.id for example, together with Gojek they develop JX/J-Express company (previously under JD Logistic unit) which focuses on intercity delivery. Currently they have been facilitated by 6 warehouse infrastructures with 250+ delivery points.

Giant E-commerce Others are also investing in logistics infrastructure, including what Tokopedia is doing to make fulfillment center to support their mission to become infrastructure as a service company.

Meanwhile, Bukalapak is now focusing mainly on empowerment merchant (O2O) has another approach, through BukaSend they act more as an aggregator to help pelapak find the most efficient logistics partner with their needs.

Logistics startup stretch

The logistics sector in Indonesia still leaves many problems and has not fully met [effectively] the shipping needs generated by the industry E-commerce. In addition, the potential for capitalization of the resulting value is also very large, so that investors also continue to pay attention to this sector.

One of them was delivered by Managing Partner AC Ventures Adrian Li. He said that currently Indonesia's logistics sector is estimated to be worth $275 billion, growing at ~16% CAGR between 2015-2020. His institution is involved in funding logistics startup Shipper and Cargo — including early investors.

“Consumption growth, trade and infrastructure development will drive logistics innovation to deliver more efficient and cost-effective solutions […] We project that this sector will produce the next wave of unicorns. And we have strong confidence that this space will show substantial growth in the next decade,” said Adrian.

Investments in logistics startups are also continuing increasing from year to year. In July 2021, which means only 7 months, the value of funding disbursed by investors has almost doubled compared to funding throughout 2. From $2020 million to $182,9 million. Investor confidence in funding startups in the late stage is based on the strong traction in this business.