KUALA LUMPUR: The country’s leading e-commerce player Lazada Malaysia has seen its biggest jump of more than 120,000 new retailers and small and medium enterprises (SMEs) onboarding its platform in the past 18 months.

       This is given the accelerated digitalisation trend amid lockdown restrictions as a result of Covid-19.

       To put it into perspective, the group saw a massive 300% spike in new retailers on its platform compared to pre-pandemic levels.

       The inflow of retailers on its platform is the biggest jump that Lazada Malaysia has seen in the past few years bolstered by the shift in business owners tapping into online revenue streams amid offline disruptions, according to Lazada Malaysia chief executive officer Magnus Ekbom.

       “The massive number of SMEs coming on board is a development based on digital e-commerce channels becoming a lifeline for SMEs which created a sense of optimism for business owners transforming themselves to adopt digital tools, learning new digital skills to their business. This is a silver lining we take to heart during the pandemic.

       “There are many sellers that previously didn’t see online as a natural sales channel, but now have started to adopt digital e-commerce in a more determined way.

       A train passing through a digital billboard which showing the Lazada 12.12 sales in Kuala Lumpur. — IZZRAFIQ ALIAS/The Star

       “Many of them are finding new growth opportunities on our platform. Their digital transformation is also an investment for the future of SMEs to be future-proofed in the challenging times,” he told StarBiz.

       Meanwhile, Magnus, who is also the chief strategy officer of Lazada Group, pointed out that the hike of new retailers across all categories since the pandemic came as a surprise as the group was expecting to reach the mounting figures of SMEs onboarding its platform by the next two to three years.

       “It took a much a shorter time to make it a reality as we see the number of consumers actively take part in the digital economy of the country. The acceleration of the ongoing developments will continue to shape the market place in the years to come,” he opined.

       One key reason that saw sellers scale up their businesses on the e-commerce platform is the significant shift in consumers’ consumption habits with greater diversification between online and offline purchases.

       According to Lazada’s first-ever Digital Commerce Confidence Index, about 52% of sellers experienced a high level of growth during the first half of this year, with 70% anticipating additional growth of more than 10% in the third quarter of this year.

       Of the 70% of sellers expecting additional growth, a third of sellers surveyed were extremely confident that their sales volume would increase by more than 30% in the third quarter of this year.

       This is because about 47% of consumers reduced their offline purchases, while 30% increased their online spending amid the Covid-19 pandemic, reported the Confidence Index.

       The Confidence Index surveyed 750 sellers across six markets in South-East Asia namely Indonesia, Philippines, Thailand, Vietnam, Malaysia and Singapore.

       While strong growth momentum was recorded across all retail categories, Magunus said sellers from the groceries, electronics and fast-moving consumer goods (FMCG) categories appeared to be the biggest beneficiaries amid the pandemic.

       With more than one in three of the country’s population shopping on Lazada every month, Magnus foresees the positive upward trend to continue across all retail categories.

       However, a key challenge that is faced by the SMEs currently is the lack of access to financing. Companies with online stores on Lazada could obtain various financing via a track record of their sales and cashflow, he added.

       “SMEs on our platform will have a track record of their sales, cashflow, giving them a credit credibility and credit score as they look to obtain financing,” he explained.

       Having said that, together with the Ministry of Finance and Malaysia Digital Economy Corp (MDEC), Lazada is running a ‘Shop Malaysia Online’ and ‘Go-eCommerce; initiatives from July 1 till Dec 31, 2021 to support local SMEs.

       Lazada was the first e-commerce platform to provide support for local businesses during the first and second movement control orders, investing around RM54mil through its Pakej Kedai Pintar stimulus package.

       As the country moves towards its goal to fully vaccinate citizens before the end of this year, Magnus envisaged the upward trend of interest in digitalisation to continue even in a post-pandemic era because online shopping has become ingrained in the lifestyle of all Malaysians.

       “Lazada is well-positioned in South-East Asia to take advantage of great opportunities in the evolving digital economy through meaningful contributions to the ecosystem by investing in our technology innovation and logistics infrastructure,” he said.

       Moving forward, the group is looking at how smart logistics and network control can empower businesses and give customers a better shopping experience.

       “We will continue to grow and enhance this area,” said Magnus.