This week’s podcast is about Lazada and the current state of ecommerce in Southeast Asia.

You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.

Here is the link to the TechMoat Consulting.

Here is the link to the Tech Tour.

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From the Concept Library, concepts for this article are:

• Marketplace platforms
• Ecommerce
• Southeast Asia

From the Company Library, companies for this article are:

• Lazada

———–transcription below

Episode 218 – Lazada Growth Engine.1

Jeffrey Towson: [00:00:00] Welcome, welcome, everybody. My name is Jeff Towson, and this is the Tech Strategy podcast from TechMoat Consulting. And the talk for today, the three growth engines of Lazada. Now this is, you know, Lazada, Southeast Asia I was sort of going back and forth with them a little bit this week. Interesting company, kind of at an interesting stage.

It’s, it’s also a really good proxy for looking at Southeast Asia e commerce, which is super interesting. So I thought I’d talk about that. Just, you know, put forward a little simple framework and I’ll send out an article shortly with the same little simple framework, but it’s, yeah, it’s kind of interesting.

And I’ve been sort of interacting with them a bit. Last year I, I interviewed their CEO, James Dong really pretty impressive guy you know, running, now he’s running Lazada and Daraz. Back [00:01:00] then it was just Lazada, you know, seasoned Alibaba, You know, manager, trained, Hangzhou. Was involved in launching a lot of the deals into Southeast Asia and then he went down and ended up being CEO of Thailand And then I think it was CEO of Lazada Thailand And then I think it was Vietnam CEO Lazada and then Vietnam plus CEO, you know, both countries Lazada CEO and now Lazada in general.

So, you know, kind of the seasoned management that you’re looking for And also pretty cool, Doody does like Ironman competitions and stuff. It’s really interesting. Anyways, I thought it’d be worth talking about sort of what’s next for Lazada, for Southeast Asian e commerce because there’s some decent changes on the horizon.

A TikTok shop is on the way. This whole combination of video and entertainment and e commerce and social media, you know, [00:02:00] that’s really Asia’s the frontier. China’s pretty far ahead, but Southeast Asia is coming next. So anyways, a couple cool topics. I’ll go through them pretty quick. The standard disclaimer, nothing in this podcast or in my writing or website is investment advice.

The numbers and information for me and any guests may be incorrect. The views and opinions expressed may no longer be relevant or accurate. Overall, investing is risky. This is not investment, legal, or tax advice. Do your own research. And with that, let’s get into the topic. Now for concepts for today, I mean, obviously Lazada, Marketplace platform, we’ve talked about those forever.

I kind of want to talk about how those things evolve over time. Cause very much it, you know, it starts out as this simple, almost product centric story of, we have a really big store with lots of products. But as you move forward, it becomes almost an emotion, a Centric customer proposition, much more feeding into things [00:03:00] like entertainment and social, and that’s a whole nother dimension to the consumer experience.

Now at the center of that, you still have the sort of the product features, a very mechanical dry way of looking at companies. Here’s our product selection. Here’s the features we office. Here’s the, you know, the cost. Okay. That’s fine. But you know, once you start adding in entertainment video, emotion, all of that it gets a lot more interesting as sort of a strategy question.

So that we’ll talk about that change, which is kind of what’s going on right now. So definitely marketplaces would be, you know, if you’re not familiar with those, go to the concept library, you’ll see lots and lots under marketplace platforms. But you can also look at things like Coupang, Xiaomi, who are staunchly in the business of thrilling their customers.

which is a completely different type of goal than we’re going to have a really big superstore with good products. No, thrilling your customers, [00:04:00] that is raising the bar. And I think that’s a lot of what happens in phase two of e commerce in a region, is the bar gets raised significantly for what you’re really delivering.

And I think that’s where Lazada is. I think that’s where a lot of Southeast Asia is right now. So anyways, those are kind of the two related ideas for for today. All right, so let’s sort of, you know, Southeast Asia, people are usually talking about six countries, but there’s a, McKinsey has a good framework for this.

They talk about Asia with, they call developed Asia, which is usually Japan, North Korea, Hong Kong, Taiwan, and then they talk about mainland China as its own category, as very unique. And then second to that, they usually talk about sort of developing Asia, which we’re talking East Asia here, [00:05:00] not, not India.

Well, in developing Asia, that’s really when you get Indonesia, Philippines, Thailand, Vietnam. And then the next category they talk about, they call frontier Asia, which is. You know, then you’re talking Sri Lanka, then you’re talking Bangladesh. You know, and that’s where Daraz lives, but Lazada has always been sort of focused on that core Southeast Asia, developing Asia.

Now, the problem with that is these, these six countries that everyone talks about are pretty different. You know, the income levels, the level of development, the sophistication of the government is very different, like usually Malaysia, Thailand. are one category of fairly well developed, well run countries.

Singapore is obviously sort of, you know, a developed country. But then things get very different when you start talking about the Philippines. Indonesia, depending what you’re talking about. If you’re talking about Jakarta, that’s one thing. If you’re talking about [00:06:00] random islands different. And then Vietnam is, is kind of in the middle there where people usually lump it in with Malaysia and Thailand, but the growth rates are much faster there.

The political situation is not as sort of, let’s call, well established as we would see somewhere like Malaysia and Thailand, which have been stable for a long, long time. You know, Laos, Cambodia, and then, you know, things step down a little bit. So anyways, you kind of got to break all this stuff by language, by culture, by level of development, by government, things like that.

So, Yeah, Southeast Asia ain’t, it ain’t that simple to describe. But that’s kind of how I think about it. Okay, now within Southeast Asia, we can make a couple generalizations. Number one is the initial scramble for Southeast Asian e commerce. That phase of this is over. You know, we had a good [00:07:00] 10 to 15 years of, you know, sort of a frantic scramble.

To get users, to get marketplace liquidity, and to get scale. And the reason this first phase tends to be fairly aggressive, is because everybody knows what a marketplace business model is now. It’s not like Amazon in 1998. Everybody knows how these things work. You know, you build a two sided platform.

You get a lot of merchants, sellers, brands. On one side, you get consumers and other types of customers. On the other, buyers and sellers. The marketplace relatively quickly will consolidate down to two, three, maybe four players. And then the network effects kick in, the barriers to entry kick in, the scale advantages are pretty devastating, and it’s a winner take most business.

So if you don’t make it over the finish line and get critical mass and don’t end up being one of those two, [00:08:00] three, or four leaders it’s pretty much game over. I mean, that’s true in much of the world. Now, China’s a little bit more dynamic. So we see differentiated e commerce players popping up all the time.

Xi’an, Timu Pinduoduo, things like that. But for most of the world, a basic marketplace platform in e commerce with a huge product selection, it comes down to two or three players. So. That’s why you see so much sort of big market spending, promotions, subsidies, free delivery. All of that in phase one is because you got to get over the finish line.

And then phase two, things settle down a bit and people start acting a little bit, if not more rationally, then more thinking about longer term growth and competition and not a frantic scramble to get a seat before the music stops. And that’s a lot of what we’ve seen. [00:09:00] The other thing we see in the first phase is the customer offering is fairly basic.

You know, I describe it as like a big version of Walmart. We have tons and tons of products that are of a certain quality and that have good prices. And we try to give you an experience that is very convenient and easy to use, which means the app is nice. You know, we get nice reviews and we get fast delivery.

That’s kind of phase one. If, if you roll out in phase one with things like, we have lots of video and we have advanced gamification, often the market, it’s too sophisticated for the market at that point. The consumers aren’t there yet. So, And that’s pretty much what happened in Southeast Asia, that most everyone is now online, they’re all got the apps, they’re all used to this, but that wasn’t really the case in [00:10:00] 2015.

And it’s certainly not the case when you go to places, you know, a lot of islands in Indonesia and the Philippines. Now, I think we got through phase one a little bit faster in, in Southeast Asia because it’s, it’s got a little bit more of a demographic density. In most countries, Malaysia, Thailand, we see a heavy concentration in the capital cities, much more than we say, say, in the U.

1. or China. You know, most people in Thailand live in Bangkok. The next city on the list, if you go down in size, is probably Chiang Mai. The gap between number one and number two in terms of cities is really big. And we see the same thing in you know, Taipei, Seoul. So we do get a lot of sort of customer density, which gets you faster adoption.

It gets you better delivery. A lot of stuff is a lot easier to build out [00:11:00] when you’re just building it out in one big city as opposed to across all the suburbs of California. So that’s kind of phase one. On the merchant side, the brand side. You know, phase one, that tends to be the bottleneck because people will download the app and start using it quite quickly as a customer, but it takes a time to get businesses used to selling online.

They, a lot of this is, I mean, a lot of this is just merchants going online for the first time. They’ve got to start putting up their portal and they’ve got to get payment in place. You know, that, that first step is a bit slow. So, And I did ask JD Thailand, the CEO, probably three years ago. That has since been pretty much closed down.

You know, what is the biggest bottleneck? And he basically said it was merchant onboarding. That we have to do a lot of education. Now I asked James Dong at Lazada the same question last year. Is [00:12:00] this still the bottleneck? And he basically said no. No, you know, people are online, they understand things are moving quick now.

So that’s kind of phase one. As phase one ends, we know who the leaders are. Now, actually one more point on this. Another thing to think about is for a lot of phase one of e-commerce, you’re talking about a territorial geography like the us, the uk, the EU mainland, China, Japan. There’s not a huge cross border aspect happening.

Now, that does come online later. And cross border e commerce, let’s say in China, you know, it’s typically 15 percent, something like that. Well, Southeast Asia, everything was cross border from day one. You know, there was a lot of Chinese manufacturers selling into Thailand, into Vietnam, into Singapore, places like that.

So the cross border component was much more significant. And I did ask, like, James Are the logistics [00:13:00] requirements different because of the more significant cross border aspect? I mean, keep in mind that China and other parts of Asia, this is the manufacturing powerhouse of the world. Most of the stuff, the clothes you’re wearing, the stuff on your desk, the device in your hand right now, those things came from Asia.

So there’s a lot of manufacturing here that’s easy to ship across borders from China into Singapore and so on. And I kind of asked him, are the logistics requirements different because there’s so much cross border? And because you’re talking islands and jungles and villages in Indonesia. And the answer was, no, not really.

It’s pretty much the same tools and the same warehouses and the same approach. It’s not that different. I’m paraphrasing, but that was my impression. Okay, that was interesting. All right, so that’s kind of phase one. We move to phase two. You know, then we start talking about long term growth. Okay, phase one is kind of like an online version of a big [00:14:00] Walmart.

The next phase, which is where I think we’re in the early, where the beginning of right now in Southeast Asia, is the game shifts from a frantic scramble for users. GMV and Scale. Much more to creativity, innovation, and improving the customer experience. Now we’ll get to the first idea I mentioned.

Everything I just described in terms of the Walmart model, I described it like the specs of a project or a product. Here’s what this product does. Here’s its main features. Here’s the price. This is why it’s better than the competing product. That’s a very product centric way of thinking about business.

If you use that approach to explain Coca Cola, it’s not gonna work. Let me tell you the features of why Coca Cola is better than Pepsi and Dr. Pepper and Sprite. No. [00:15:00] Long ago, Coca Cola, Nike. To some degree, Apple shifted to a more emotion centric product offering. They talk about how it makes you feel. It makes you happy.

Coca Cola is fun. You know, it’s happy, you know, McDonald’s I’m loving it, which is terrible slogan. When you switch to a more emotion centric consumer offering, it is really pretty great. You know, I always say to people, what’s the difference between a 30 pair of sneakers you buy at a Carrefour, unbranded, probably from China or Southeast Asia, versus a Nike for 100?

The shoe is the same. The product features are all the same. The only difference is how it makes you feel. You know, it’s, people like Nike. It makes them happy. It’s aspirational. They like the sense of sports. There’s a lot going on in the brain. Now, it turns out the benefit of that, there’s a [00:16:00] lot of benefits to that actually.

As you move to more sort of a motion, like a motion and or innovation centric consumer offerings, it’s much more defendable against competitors. If you have a standard product like a pair of sneakers or whatever, it’s much safer. It’s very easy for someone else to copy your product and the features. It’s much harder to copy how that service or product makes someone feel.

It’s not so easy. So, your competitive position usually gets a lot better. My sort of standard statement on all of this is, is my favorite consumer products, at their core, have a strong product with good utility like sneakers. Sneakers are a good product. If you don’t have sneakers, you can’t get anywhere in this life.

You can’t get down the street. You need them. You need to wear them every day. There is a utility to [00:17:00] sneakers at the core that make it a good product with good features. So I like to have a core with really fundamental utility and then wrapped around that I like to have a big layer of emotion. So utility, you need to use it.

You use it every day, but then we supercharge it with emotion. That’s Nike. I also think that’s Coca Cola. You need liquid every day to survive, water, juice, something. Okay. We wrap that in Coca Cola, add some sugar and caffeine, good product. So I like that kind of a breakdown of companies. Okay. So as you start looking at e commerce.

The analogy I use is, look, it’s no longer just about the big shopping Walmart, the big superstore, the hypermarket. It looks a lot more to me like a carnival or let’s say a shopping mall. Nobody goes to Walmart to have fun. Nobody’s like, Hey, you want to go down to Walmart? It’s Friday [00:18:00] night. Let’s go hang out at the Walmart.

No, no offense. I love Walmart. You don’t go there for fun. You go there for the product availability, basically. You go to the shopping mall and maybe you see a movie and you have dinner or maybe you just walk around because it’s fun. And now at the end of the shopping mall, usually in the basement, there’ll be a car for a Walmart or a Lotuses.

But it’s a much more emotional, entertainment based experience. Now, the basic version of this, I would say, is the shopping mall. And I think that’s where Alibaba has been going. They’ve been talking for five years about we’re, we’re combining entertainment with e commerce. Something like WeChat mini programs.

We’re combining e commerce with social connectivity. Well, that, that happens at the mall too. You hang out with your friends. Now, the more extreme version of this approach would be Pinduoduo. I mean. They [00:19:00] completely came out of left field in mainland China with an experience first product. I mean, from day one, you saw people, one thing you can look at is the KPIs.

Your standard Walmart and shopping centers, the primary metric is going to be GMV users growth. Once you start talking Pinduoduo and carnivals It’s daily active users. We want people that are logging in every day. And that’s what we saw in Pinduoduo fairly early on. People were logging in multiple times a day.

Having fun. Seeing what’s available. What’s on sale? What are the promotions? Let’s do gamification. And their GM view is actually, if you look at DAU divided by GMV. Walmart, sorry, like Pinduoduo is much higher. [00:20:00] Their daily active users divided by GMV is dramatically higher than any other e commerce company you’ll see.

Basically people are coming there and hanging out and having fun far more than they’re just buying stuff. For other sites. You know, there’s a pretty close correlation between buying stuff and how often they open the app. That’s not true for Pinduoduo. So, you know, we can use a lot of different analogies for this.

I’ve given quite a few talks about this actually over the years. And the two companies I always point to are Coupang in South Korea and Xiaomi, mostly in mainland China. Because Coupang, which is a marketplace business model. It’s kind of 50 percent retail, 50%. So first party in 50%, third party marketplace, very similar to JD actually.

You know, they have very good language to talk about this. And they talk about, [00:21:00] we are in the business of providing wow experiences for our customers. So everything they try to do, it’s with the idea. We want to wow our customers. And that’s a pretty good language to think about what business are we really in?

Are we in the business of offering good deals? Are we in the business of having, you know, a big product selection of quality SKUs? Yes, that’s true, but they’ve raised the bar. No, we’re now in the business of wowing our customers every week. So all of our new initiatives have to improve the user experience.

Now, that can be emotional, that can be removing pain points, that can be reducing friction, but in my frameworks, I always talk about this as digital operating basics number two, that you are in a never ending race. to improve the consumer experience and it never ends. Now they come at it that way because they’re they’re coming at [00:22:00] this, you know, they want their customers to be wowed.

Xiaomi is a little different because they’re releasing products. They are much more in the innovation business as opposed to the experience business. People don’t log into Xiaomi twice a day. No, they go down to the store and they look for whatever the new products are. And the language Xiaomi uses is we must continually thrill our customers.

So they’re still product centric as opposed to emotion centric, but they’ve taken product centric and combined it with a rapid rate of innovation. And the bar they use is we have to continually thrill our customers. So they always come back into our stores to see what we’ve got next. Smart scooters, smart backpack, smart chopsticks.

You know, all of that stuff. So it’s a little different. If you’re in the experience business and the service business, like Coupang and like Lazada, you’re much more talking [00:23:00] about experiences, wowing people. If you’re in the product business, the bar gets raised to be much more innovative and hence, thrill your customers.

Anyways, that’s kind of how I see Southeast Asia right now. So on the consumer side We’re basically seeing this beginning of the marathon of we are going to continually improve the consumer experience. Our consumers here are much more savvy and discerning than they were five to 10 years ago. They have higher expectations.

They want personalization. They want reliability. They want exceptional customer service. Just offering a good Walmart like business model is no longer enough. And you start measuring things like Net Promoter Scores and DAU and MAU and all these other metrics that are very different. On the merchant side, we see a similar version of the same [00:24:00] question, which is, Okay, we’re not trying to thrill our merchants.

What are we really trying to do? We are trying to provide them with tools and services. that significantly improve their business all the time. We want to give them digital tools that make them more effective, that make them more efficient, that let them do things they couldn’t do before. So optimize their operations, better marketing, better data insights into their customers, better communication with their customers so they can start to improve the experience of customers dealing with individual merchants.

So a little bit different there but the same idea. Not emotional. It’s more like if you were to map out the P& L of a standard merchant on Lazada. We’d have the revenue line, we’d have the marketing line, we’d have the gross products, we’d have logistics, we’d have payment, we’d have [00:25:00] IT, we’d have data knowledge, data layer, things like that.

They are offering tools and services on every layer of the income statement so that they can, you know, basically make them more effective as an online business and a lot of small merchants. Now if you’re a big merchant like Nike, you have all of that internally, but if you’re a small merchant with five people, You can’t build out all these advanced digital capabilities.

No, you’re gonna partner with a Lazada and they’re gonna provide those tools so that you can do everything that Nike does. So, and Jack Ma used to talk about this a lot. When people would ask, what is the business of Alibaba? He would say something to the effect of, we are in the business of providing small and medium merchants the tools that level the playing field with the large players.

Okay, so that’s kind of where I think we are in Southeast Asia right now. Let me get to sort of [00:26:00] the three engines of Lazada and then I’ll finish up. Okay, so let’s get to the so what. Now, I’ve kind of teed it up and told you what the three engines are basically at this point, but if you sort of buy my assessment of where Southeast Asia e commerce is right now, what is going to get Ali or Lazada long term growth?

Defensibility against competitors and yeah, there’s there’s serious competitors Okay, big surprise. It’s the consumer experience merchant services and Pretty significant tech investment. Those would be the three things where you want to make sizable financial and operational commitments for the long term.

So part of that is just going to be operating behavior. And part of it’s going to be making big bets on technology that may take a long time to develop. But these are your three big bets. So engine number one never ending improvements [00:27:00] to the customer experience. Okay, that’s my digital operating basics number one, or number two, sorry.

So make it more fun. Probably the first version of this we will see is similar to what we saw in China in 2015, 2017, which was combining entertainment with e commerce. That’s a natural thing, it’s happening anyways. So more entertainment, more gamification you know, What Alibaba did in China was very interesting is they had significant entertainment assets anyways.

They had Alibaba pictures. They had Tudo, which is like a YouTube combined with Netflix. So lots of content there. They launched Taobao Live, which, you know, became pretty much the number one live streaming platform. So they were integrating entertainment and video into e commerce early on. Fine. If we move beyond that, the other lever you’re going to see is greater personalization.

If you want to move the [00:28:00] needle on the consumer experience, still the biggest thing you can do is personalization. It is completely different to walk into a Zara store. With the same goods for everybody who walks in and walking into a Zara store where it’s only stuff that I like. I mean, it’s just a huge improvement.

Okay. Improved ease of use, greater convenient, faster delivery seems to be the never ending well of consumer improvements. The faster you make the delivery, the more consumers like it. Less friction, fewer pain points, fine, fine, fine. And Lazada’s doing a whole lot of initiatives there. I’ll put out an article in a week or two, sort of at a more granular level, saying here’s all the initiatives I think they’re doing that I’ve read about.

Because if you see the three engines, all these announcements they make, I think are a lot more understandable, but I think really the big one is the one I alluded to earlier, which is look, [00:29:00] you want to move from a 90 percent product centric consumer offering to something that’s at least 50 percent emotion centric.

And when you do that, you open up all these dimensions for initiatives that are far beyond everything I just mentioned. Your brand story becomes more compelling. Your competition has a harder time doing what you’re doing. But I mean, now we’re into really qualitative soft stuff and it’s hard to pull that off.

But I think that’s where they are. So we’ll see how that works out. Engine number two. Continually adding services and tools that empower sellers. Okay, that’s pretty much what I said before. There’s a there’s a great graphic that Alibaba puts up at its investor days, which basically shows all the products and services they offer their sellers.

You know, it’s [00:30:00] pretty Chris Tung, who is the CMO, Chief Marketing Officer of Alibaba, who I I think has the most fun job in all of technology. You know, probably the biggest thing he offers to clients, you know, merchants, sellers, is their uni marketing program, which is basically a dashboard with customer knowledge and insights about all your existing customers, all your potential customers, and gives you unbelievable insight into why people are buying what they’re buying and what products.

they would probably like right now based on what they’re buying, what products they don’t even know they want yet, but you know they want them, or other products that you could develop that don’t even exist that would be pretty much backed up by data, and therefore in terms of product development is much lower risk.

So that whole long suite of tools is pretty awesome and [00:31:00] generative AI is kind of happening there right now. Chatbots. Virtual agents, digital avatars. So we see a lot of merchants using generative AI to create more personalized content for each of their customers to have sort of ongoing interactions with them.

That’s a, that’s kind of what a lot of folks are focused on right now. In terms of generative AI meets e commerce, it’s merchant tools, specifically communication like chatbots and content creation. Which is mostly if you’re going to generate different emails and different text messages to all of your customers, you’re going to need something like generative AI that can do that automatically.

Now, the problem there is generative AI is still sort of sketchy in terms of its quality. That’s a problem. If you’re talking about sending messages to your customers, it’s okay. If you have internal messages and the [00:32:00] AI says something stupid, it’s not good when it goes out to your customers. All right.

So that’s number two continually adding services and tools that empower sellers. And number three, engine wise large long term investments in technologies to transform e commerce. This is when you’re on the frontier and You know, you’re there’s gonna be a lot of low level innovation by smaller companies that create new stuff all the time Okay, that’s fine.

That’s why we have M& A but the big technologies that are really going to transform e commerce are going to require long term large bets and There’s only a couple e commerce giants that have the financial firepower to do that It was like when Facebook said, I’m going to flood, what was it, 10 billion into Metaverse.

Now, it turns out you should have tested that before you spent the money, but you know, there’s only a couple of [00:33:00] companies that can put, you know, place chips of that size. Well, Lazada is going to be one of them, and it helps that they’re backed up by Alibaba. So, technology that’s happening in Alibaba in China is going to get ported down there as well.

So yeah, there’s tremendous firepower, but you’re looking for those long, large, you know, long term, large bets, generative AI, data tools, better decision making, maybe smart logistics, I think is in that, in that category. But those to me are the three things where you’re just going to, if I was looking at how Lazada was doing versus competitors, okay, the outcome measure you’d look at is market share users.

But the process measures I’d look at are rate of improvements to the consumer experience, seller tools that are being released, and significant effective investment in new technology. Those would be the process KPIs I’d be looking at with the [00:34:00] idea that if I see a big difference, it’s probably going to play out in things like market share and other outcome metrics over time.

I think it’s more of an early warning or an early indicator. Anyways, that’s kind of the the approach for this. That’s all I really wanted to go through. Yeah, I think it’s really fun. And maybe one last point, which is, okay, if that’s phase one and phase two of e commerce for Southeast Asia, it pretty much tracks what we’ve seen in China, what we’ve seen in South Korea.

But then we have disruptors on the horizon. Well, not even on the horizon anymore, on the field. TikTok shop. That’s a video first e commerce play, and it’s doing quite well, but it’s a completely different animal. You know, you can, when you are doing Lazada, or you’re doing a site like this, when a consumer logs in, they’re logging in with purchase intent.

They’re there to shop. [00:35:00] That’s why you go. It’s the number one thing. That’s a real strength. And as you move into video and other aspects, let’s say like live streaming, you still have that common consumer intent. That’s not the way it works at somewhere like TikTok or Douyin. When people log on there, they’re not looking to shop necessarily.

They’re looking to be entertained. So Even though there’s this, Oh my God, they’re going to do really well in e commerce. And it’s like, not really, if I’m on TikTok watching videos and you keep hitting me with ads or, you know, links to buy stuff, it’s like, look, I’m not really here to shop. Why do you keep doing this?

So there’s a bit of a disconnect there and the consumer intent is very different and it kind of plays out sector by sector. If I’m watching news videos on TikTok, there is almost no purchase intent. If I’m watching fashion and beauty videos, okay, it’s probably going to be fine. So you have to break it down.

So [00:36:00] we have these new business models on the horizon. Timu, Shiyin Pinduoduo is, is, you know, the carnival. And then of course WeChat mini programs, which is not coming to Southeast Asia. But it wouldn’t surprise me if that model emerged. I still don’t know, like, why WhatsApp doesn’t do it.

Because WhatsApp is super popular across Southeast Asia. And then we have Indonesian players like Tokopedia and Grab and Gojek. So it’s an interesting mix of competitors in Southeast Asia. What we have in Southeast Asia, which I think is quite cool, we have Western and Chinese e commerce and other digital giants going head to head, which doesn’t really happen in the U.

1. A couple spots, Shein, Teemu, TikTok, doesn’t really happen in China. Amazon’s not there, but it happens in Southeast Asia. And we get Japanese players in there. We had South Korean [00:37:00] players. I mean Line, which is an interesting company, that’s out of South Korea, but it’s super big in Taiwan and Thailand. So we get sort of different competition than we see other places.

Anyways, it’s pretty cool. Okay, that is pretty much what I wanted to go through. Those of you who are, I’m gonna send this out on email an article summarizing all this tonight. It’ll also be posted on the web page there. This one’s open to everybody. Not, not paywall, but it’ll be there. And then I’ll probably follow up with more detailed list of initiatives.

Under these three engines, fine, fine, fine. Show me what they’re building right now. Oh, and one last thing. They just announced in the last day, this Lazada, that they hit operating break even in profitability this quarter. Now they’re defining operating profitability by EBITDA, which is, which is not the same as sort of usually EBIT Post tax, but very interesting and I think that’s consistent with this whole idea of look we’re shifting [00:38:00] from the frantic first phase of land grab to this more longer term sustainable growth with more sustainable growth engines and yes we’re going to profitability.

I think that’s all consistent. Okay, that is it for today in terms of content. As for me, I’m doing pretty well. I’m still in sort of my manic content creation mode, which I really enjoy, but yeah, it’s been a lot of writing and things like that. No real video or TV recommendations. I’m hunting for something new to watch, like a new series.

I haven’t really found it. I was watching I watched all of the John Wick movies in sequence. You know, what’s really funny about the John Wick movies? If you google online, how many headshots per movie? Like you can actually get a number because there’s not a real story. It’s just running around shooting people, mostly in the head.

And there you can get the count for how [00:39:00] many headshots are in each movie. And basically it’s a couple hundred. Well, it’s close to a hundred for the first three. And then the fourth, the finale, it was like the highest number ever. So in the whole like four movies, the number of times you get to see him shoot somebody in the head, it’s like 400.

It’s, it’s, it’s kind of ridiculous. Like, I don’t know. I don’t understand why those movies work, but they do work. Like, I love number four. Like there’s no story. It’s just running around fighting and shooting people. But I love the scenes and the visual. And I really love number four when it’s in Osaka.

And, you know, the guards are samurai and, you know, it’s really just visually, I thought it was really cool. And then they go to like the Russian center. There’s something about it visually that I find really just great. I’m not sure why I like it. Cause if you had described it to me and I hadn’t seen it, I’d say that sounds ridiculous.

But anyway, so I watched all [00:40:00] four of those in sequence, which was actually a pretty good weekend. Anyways, that is it for me. I hope everyone is doing well and I will talk to you next week. Bye bye.

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I write, speak and consult about how to win (and not lose) in digital strategy and transformation.

I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.

My book series Moats and Marathons is one-of-a-kind framework for building and measuring competitive advantages in digital businesses.

Note: This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.