The online retailing platform Lazada recently turned 13 and Context.ph sat down with Alvin Ching who heads its Philippine selling operations. This interview is conducted against a background of consumption activities across the country averaging P2.48 trillion from 2000 until 2024, based on data from the Philippine Statistics Authority. Consumption hit a record high of P4.62 trillion in the fourth quarter last year alone, based on the same data set.
Now, the retail industry as contributor to the country’s output, measured as the gross domestic product (GDP), was estimated at a little lower than 19 percent in 2022 by the Philippine Retailers Association (PRA) but seen expanding to 20 percent by the end-2024. Private consumption, based on estimates by the World Bank/International Monetary Fund Group, accounted for under 76 percent of GDP in December last year, which helps illustrate the substantial role of consumption spending in driving the local economy. Retail spending, one must add, is a subset of total private consumption.
Q & A
What kind of growth rate is the platform doing 13 years since the platform first operated?
We continue to enjoy double-digit sales growth. But as double-digit sales growth continues, a key question lingers: how do we maintain this momentum without falling into unsustainable patterns? The answer lies not in repeating what has worked, but in addressing the critical gaps in our assortment.
While discounts, promotions, and vouchers have driven sales, over time, customers tire of constant price-driven tactics. They may become demanding or take the deals for granted, eventually pushing the marketplace into a price war. To ensure sustained growth, the focus must shift from short-term promotions to long-term value creation—particularly through the careful curation of a comprehensive assortment.
Being a platform that serves a wide range of consumers, it’s imperative that we meet the needs of everyone, from the middle class to the high-end demographic. The middle class, in particular, is diverse, and our offerings need to cater to their evolving needs. However, it’s not just about offering cheap deals; it’s about creating a lineup of products that keeps customers coming back, investing in the right categories, and ensuring they find what they’re looking for when they need it.
In some categories, such as pajamas and sleepwear, the assortment is robust for men and women but lacks in children’s options—an example of a critical gap we’re working to fill. To bridge these gaps, the sales team collaborates with our sellers to identify missing items and work together to source them. With a complete lineup, customers are more likely to stay loyal to our platform, as they won’t need to search elsewhere for the products they desire.
How do you encourage customers to stay loyal?
Beyond just having the right products, ensuring customers can easily discover them is another key factor. Our chatbot, LazzieChat, powered by AI, helps bridge this gap by assisting users in finding exactly what they need. The AI continues to learn, becoming smarter over time, even responding in Filipino to make recommendations more relevant to local users. By refining our product discovery and recommendation process, we make it easier for customers to find what they want, driving more sales without relying on price discounts.
Our diverse portfolio spans categories from fashion and FMCG (fast-moving consumer goods) to general merchandise and electronics, with top-performing segments like groceries, beauty products, and motorcycle accessories leading the charge. Groceries remain strong because they are household essentials—products like cleaning items, cooking oil, and other staples. Beauty items cater to both high-end and more affordable preferences, giving us the flexibility to serve various customer segments. Our LazMall platform, known for its high-quality branded goods and strong anti-counterfeit policies, also contributes to customer loyalty.
Who are your customers?
The middle class is our largest and most valuable customer base, and we are committed to meeting their growing demands. While the elite class represents a loyal and consistent group, the middle class continues to expand, offering a key opportunity for future growth. For customers seeking lower-priced items, competition is fierce, but by filling assortment gaps and improving product discoverability, we can keep them engaged and returning to the platform.
To sustain double-digit growth year over year, the answer isn’t just about maintaining what’s worked—it’s about evolving our strategy. That evolution starts with an emphasis on assortment, making smarter recommendations through technology, and investing in products that truly meet the needs of our broad customer base. Addressing these gaps is the key to securing continued growth and customer loyalty in an increasingly competitive market.
