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Lazada Philippines CEO: Customer purchases rise amid economic challenges

THE frequency of Filipino customers purchasing items on e-commerce platform Lazada has increased amid economic challenges such as surging inflation, according to one of its officials.

“People spend a little less because they have more choices, they can go out again. But they come back so often because they already get used to it,” Lazada Philippines Chief Executive Officer Carlos Otermin Barrera said during a media roundtable in Taguig City last week.

Mr. Barrera said that despite a lower transaction size, visits have become more often to the e-commerce platform, which is celebrating its 11th anniversary.

“On average, it (transaction size) has gone down around 20% from pandemic-peak levels but the frequency has more than doubled,” he said.

The average transaction size is a “little smaller” as people are spending on other things and are given the opportunity to visit physical stores again, he said.

“What we have seen is that the market has evolved a lot. The average tickets are slightly lower but people come back more often. That has to do with value-seeking. People come back more often and they know that they can buy it cheaper and they can find good deals,” he added.

Due to the nature of its operations and as more people try to save, e-commerce is “fairly protected” from economic challenges, Mr. Barrera said. The country’s inflation rate hit 8.7% in January compared with 3% a year ago and 8.1% in December.

“People are now trying to save a bit more on their day-to-day purchases. We’re fully aligned with that. That’s the role of online [businesses] — to help people get better value,” he said. “There’s definitely value-seeking [behavior] happening in the market but it is not as pronounced online because people are still coming very frequently.”

“At Lazada, we have a lower cost of doing business. Online businesses are very nimble, very dynamic, and have lower costs,” he said, adding that many sellers have been able to limit price increases.

Meanwhile, Mr. Barrera said that Lazada Philippines is planning to build hundreds of delivery hubs across the country as part of efforts to improve delivery and customer experience.

He declined to disclose specific figures on the e-commerce platform’s planned investment except to say “hundreds.”

“We want to be everywhere. We want to be next to our customers wherever they are. We want to get to the next level in the entire country. We’re very strong in Metro Manila, in Luzon, and some of the other metro areas in the provinces. But the next frontier is faster deliveries across Luzon and other areas,” Mr. Barrera said.

“We are known for our deliveries. Now, we’re going to go and to claim it, so we are investing a lot in building our network, growing our faster deliveries, building more hubs, and getting closer to the customers. We are ready to make that investment because we want everybody to realize that shopping online is much cheaper, faster, and more convenient,” he added. — Revin Mikhael D. Ochave

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