ZALORA Enters the B2B Segment to Increase Profitability, While Appointing a New CEO

ZALORA, platform E-commerce specifically fashion and lifestyle, introducing B2B services as a new business line to boost its position as a sustainable company. There are four solutions offered, namely E-Fulfillment, Data, Marketing and E-Distribution. This solution is part of expertise Zalora's parent, Global Fashion Group (GFG).

At the same time, ZALORA also introduced Aasish Midha as CEO and Managing Director for ZALORA Indonesia & Philippines. Midha replaced Anthony Fung who has served at ZALORA Indonesia since 2015. Midha has been with ZALORA for five years, her last position was Revenue Director for ZALORA Philippines.

Under his leadership, he will strengthen brand identity ZALORA has been solidly built for more than a decade, expanding its reach through exponential and profitable growth.

“B2B is an important pillar as well as a source revenue new, so we see it as a business era that is as important as B2C business. We offer comprehensive services to help brand can be helped. "This solution applies to all Zalora operations, including Indonesia," explained Midha at a press conference in Jakarta, Thursday (7/12).

Furthermore, through the E-Fulfillment solution, ZALORA presents One Stock Solution (1SS) and Fulfillment by Zalora (FBZ) as fulfillment solutions offered to brand partner strategic to improve product delivery efficiency and customer service.

Through Fulfillment by ZALORA (FBZ), brand can utilize the solution end-to-end e-commerce which has been enhanced by ZALORA to enjoy a simplified operating process. With FBZ, brand those selling on ZALORA can rely on ZALORA's established network of logistics experts and infrastructure, but still have control over campaigns and marketing decisions.

Next, One Stock Solution (1SS), makes it possible brand to enjoy the benefits of ZALORA's warehousing and logistics infrastructure not only for their brand stores within the ZALORA platform, but also for the platform online external.

Via 1SS, orders brand partner from platform marketplace non-ZALORA and sites web brand saved and fulfilled by ZALORA - delivers brand ease of combining management E-commerce them through ZALORA's end-to-end digital operations and fulfillment.

Quoting from the site, this E-Fulfillment solution has managed orders E-commerce on ZALORA.com for over 300 local & international brands. The company has one central warehouse in Malaysia to handle regional scale orders. There are two local warehouses, one each in the Philippines and Indonesia to handle domestic orders. As well as a courier fleet last mile itself spread across Malaysia, Singapore, the Philippines and Indonesia.

Since the E-Fulfillment solution was introduced, the majority brand globally has utilized the solution. Among them, Ted Baker, Giordano, H&M, Hush Puppies, Kipling, to Mango, then there are two brand local people who also joined, namely Varesse and RiaMiranda. Regionally, ZALORA operates in Singapore, Malaysia & Brunei, Indonesia, the Philippines, Hong Kong and Taiwan.

Separately quote from Tech in Asia, Zalora is reported to have recorded positive adjusted EBITDA last year. Even though the platform E-commerce is not as well known as similar players on a regional scale, such as Shopee and Lazada, this achievement should be appreciated.

It said the adjusted positive EBITDA margin – a measure of revenue as a percentage of revenue – was 0,7%. In the same period, 2,9 million shoppers purchased at least one item from ZALORA, excluding cancellations, rejections and returns. When translated into numbers, it comes to 412 million Euros ($451,4 million) in net merchandising value.

At the same time, many players E-commerce which also sells fashion products and accessories through its own brand, users access ZALORA to search for categories that cannot be found anywhere else, namely luxury goods brands (luxury brands).

In his presentation, Midha explained that the growth of transactions in this category reached 37% yoy. Other categories based on average order value growth are Kids (6%), home furnishings (14%), and beauty (18%). If we look at the three most purchased categories, they are: sports products, men's clothing and women's clothing.

Formalize a loyalty program

To encourage consumer loyalty, ZALORA launched ZALORA VIP, a subscription program with gifts voucher discount, extra cashback, free shipping, priority customer access, as well as other exclusive benefits. This subscription fee starts from IDR 99 thousand and is valid for one year.

“Our customers are very loyal, enabling us to achieve the highest NPS (Net Promoter Score) of over 80% in Indonesia. I don't think anyone can be like this [achieve a high score].”

It is hoped that the adoption of ZALORA VIP will be even more massive in the future. It is claimed that ZALORA VIP users reach 15% -20% of its total consumers.

In Indonesia alone, ZALORA users are dominated by women (74%) with an age range ranging from 18-45 years. Interestingly, ZALORA's biggest transactions actually came from outside Jakarta (23%). The largest locations are Java (50%), Sumatra (12%), Kalimantan (5%), Sulawesi (4%), Bali-NTB & NTB-Papua & Maluku each contributing 2%.

With retail trends that are still promising in Asia, one of which is due to the growing middle class population, this region is ready to lead the global retail recovery in the coming years.

In the coming year, various trends will attract attention. Such as the development of a delightful shopping experience with the adoption of new technologies, such as AI, AR, fast delivery and the continued growth of BNPL; growth social commerce Lewat brand the continued growth of D2C and consumer convenience shopping via social media platforms; strategy omnichannel, which allows consumers to shop across multiple channels.

Midha said, this promising retail trend is driving exciting omnichannel expansion starting with campaigns with local designers. Some of the initiatives that have been carried out are ZALORAYA (Malaysia) and Zalora x Adidas 'Supermart' (Singapore).

“We are not going to be a retail player offline, Karena offline that's for brandexperience. So format omnichannel we're more into click and collect which provides consumers with an immersive shopping experience due to objective shopping online and offline that's different," he concluded.