Zalora accelerates e-commerce growth in Southeast Asia with innovative and sustainable solutions.
25 Mar 20246 min read
Summary
- ZALORA, part of the Global Fashion Group (GFG), says that its B2B platform services and e‑commerce solutions are emerging as a key growth lever, contributing around nine percent of the company’s revenue in the prior year.
- The company leverages its regional fulfilment infrastructure, marketing & data services and logistics network — for example, its “One Stock Solution” (1SS) warehouses some seven million items in Malaysia and enables fast delivery and roll‑outs for brands across Southeast Asia.
- ZALORA is marketing these platform services to enable international and local brands to enter and scale in Southeast Asia by simplifying set‑up, logistics, returns and omnichannel reach — aiming to unlock value for brand partners amid increasing online retail momentum.
ZALORA, Asia’s fashion expert, and part of Global Fashion Group (GFG), expects its platform services to be a significant growth driver in the year ahead. Contributing to nine percent of the company’s revenue last year, ZALORA’s B2B platform services and e-commerce solutions will be a key focus area for expansion. This coincides with Southeast Asia’s e-commerce industry continuos progress towards a bright spot despite current macroeconomic conditions.
Growing on the back of a continuous surge in new digital consumers and online retail traffic since the pandemic. A recent report by Google, Temasek and Bain & Company found that Southeast Asia’s digital economy remained resilient despite global headwinds.
Growth remains strong with the e-commerce sector leading the digital economy. This outlook has been drawing more brands to enter the region. Set-up costs, supply chain requirements, and the complexities of a diverse region where Southeast Asian consumers expect faster deliveries, reliability, and convenience. Also,the ease of returns can be challenging for brands, particularly those without local infrastructure or resources.
ZALORA today provides end-to-end e-fulfillment and e-distribution solutions. Such includes marketing services to local and international brand partners. About 75% of the top 50 brands on ZALORA use its marketing services. Meanwhile over 30 brands tap on its One Stock Solution for multi-channel fulfilment.
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“In addition to welcoming more brands onto our platform, a significant part of our business strategy is to scale up our platform services to more effectively connect our brand partners to consumers in the region through more efficient logistics systems, supply chain enhancements, and improved customer targeting. Our priority is to unlock more value for our brand partners, to help them meet their business needs as well as evolving consumer demands,” said Matej Urban, Regional Director of Platform Services, ZALORA Group.
Unlocking More Value for Brands
Over the last decade, ZALORA has been investing in its platform services in operations, marketing, and data to build end-to-end, state-of-the-art capabilities driven by technology.
This includes services such as centralized stock management, localized delivery options, and efficient return management. All enable brands, in and beyond Southeast Asia, to simplify their operations and seamlessly access and connect with consumers in the region.
One Stock Solution (1SS) provides brands with unparalleled warehousing and last-mile delivery solutions. It is by consolidating their stocks in ZALORA’s E-Fulfillment Centres. They also offer a supply chain infrastructure. It covers all their digital platforms to give customers a consistent shopping experience across all online channels.
Notably, ZALORA’s regional E-Fulfillment Hub in Malaysia houses about seven million items. The hub serves as a major fulfillment center across the region. It recorded over 3,000 items picked per hour. More than 96 percent of orders shipped within 24 hours during ZALORA’s year-end campaign last year.
The In-house Order Management System usher efficiencies, optimizes productivity, and creates a more seamless supply chain. The system tracks inventory movements in and out of its distribution centers, manages customer returns and refunds, processes orders in real time. It also uses ZALORA’s delivery fleet to enable fast and reliable end-to-end order fulfillment.
This system has also been implemented in ZALORA’s sister company, ANZ-based "The Iconic." It will enable cross-listing between the two platforms and the fulfilment of orders across regions when it fully rolls out later this year.
ZALORA’s In-house Integration Program establishes a dynamic virtual ecosystem. It seamlessly integrates diverse business systems, enabling B2B partnerships and connections across multiple entities. It includes both frontend and backend components to facilitate robust communication among interconnected systems, streamlining end-users' tasks.
Tailored for e-fulfillment, it automates critical data flow, including orders, order statuses, product and catalog information, and stock levels. In turn, fostering efficient collaboration with external brand partners.
ZALORA’s latest International Cross Docking Programme provides brands with a more agile and cost-effective supply chain solution. This is by receiving and distributing products efficiently and minimizing the need for warehousing.
To support brands in a dynamic region like Southeast Asia, ZALORA’s platform services include digital store operations and customer relationship management. The brand does production and content creation for its e-commerce and social media channels.
ZALORA’s Production Studio is currently exploring the use of technology and artificial intelligence (AI) to create compelling visual content. Such includes editorial backdrops for brand campaigns and product photoshoots, streamline production processes and schedules, and optimize budgets.
The E-Store Management service helps brand partners maximize their online reach by seamlessly overseeing all their online stores and products. This includes expanding their presence on social media channels such as TikTok through the ZALORA TikTok Shop.
Driving more sustainable journeys for brands and customers
With a targeted fashion-focused customer base of millions in Southeast Asia, ZALORA remains steadfast in its commitment to sustainability as it continues to implement eco-friendly practices throughout its operations. ZALORA’s three fulfilment centres across the region achieved a 90 percent recycling rate through waste management and sustainable packaging practices.
ZALORA also made considerable progress in transitioning to more sustainable materials in its operations and packaging. They are using 80% recycled plastic in mailers, 100% FSC-certified boxes, and replacing bubble wrap with 100% FSC-certified honeycomb and paper fillers.
ZALORA also spearheaded take-back initiatives across Singapore, Malaysia, and Indonesia, encouraging customers to recycle old clothes at designated centres.
In 2023, 13.5% of sold products were covered by closed-loop solutions such as their Snap & Drop initiative, and collaborations with The Salvation Army and House of Cuff. These demonstrates ZALORA's commitment to promoting a circular economy and reducing environmental impact.
Embracing low-carbon last-mile delivery options, ZALORA delivered five percent of all parcels using lower-carbon logistics in the fourth quarter of 2023. The brand plans to make greater strides in this area.
In Jakarta, ZALORA expanded its low-emission deliveries by partnering with Westbike, a zero-emissions bicycle courier. They employ marginalized youth in Indonesia’s inner cities, to provide "Same Day Green Delivery" for local customers.
Through these practices, ZALORA continues to pave the way for a greener and more environmentally conscious future, ensuring that every step of the customer journey is seamless and more sustainable.
(This is a press release by Zalora)