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Lazada helps South-east Asia's malls go online
CLOBBERED by the crushing effects of the coronavirus pandemic, thousands of retailers from Bangkok to Singapore have rushed to set up online shops on big e-commerce platforms to stay afloat this year. Now, entire shopping malls are going virtual for the first time.
Marina Square - a Singapore shopping mall in the Marina Bay area - is taking more than 30 of its tenants online with Lazada, the South-east Asian unit of Alibaba Group Holding.
It is the first shopping centre in the city-state to create a mini virtual replica of its physical mall.
"It's a new concept in Singapore," James Chang, the chief executive officer of Lazada Singapore, said in an interview. "From a shopping mall's perspective, it could be seen as competition, but we worked out this partnership because it provides visibility and awareness of the tenants and offline mall."
The lockdowns have meant devastating changes for the retail industry. In the United States, more than 110 companies have declared bankruptcy this year, including JC Penney, Neiman Marcus Group and J Crew Group.
In Singapore, retail sales plunged 52.1 per cent in May from a year earlier, the most since records began in 1986. The island's economy fell into recession last quarter, as an extended lockdown shuttered businesses and decimated spending.
Retailers in South-east Asia are experimenting with new business models to adapt. The region's e-commerce industry is relatively young and fast-growing, compared with the US, where shopping malls have struggled against increasing online competition for years.
With Lazada, Marina Square is seeking "a balance of online and offline opportunities", said Lim Hock San, chief executive officer of Marina Centre Holdings. "The online exposure we give to our tenants will benefit them and help support brand awareness."
Marina Square's partnership with Lazada will include about a dozen brands that were not previously on the e-commerce platform.
The mall is also offering vouchers that can be used in physical stores, as part of efforts to draw shoppers back into its outlets.
This follows similar moves by Siam Center, a landmark shopping mall in Bangkok built in the 1970s, which teamed up with Lazada to set up its virtual mall with about 40 tenants.
In Indonesia, more than 100 tenants of three malls by developer Pakuwon Group are going live on Lazada.
Lazada, which operates in six countries in South-east Asia, launched its virtual mall called Lazmall in 2018, allowing brands to set up their own online stores. Since then, the number of brands has grown ninefold to more than 18,000, said Mr Chang.
The company's grocery business in Singapore saw a 50 per cent increase in orders since lockdown measures were imposed in April, reaching a record in June, Mr Chang said. It hired 500 full-time and part-time workers to meet the demand.
"E-commerce adoption has been here, but Covid-19 has expedited that adoption," he added. BLOOMBERG