I have to admit that I used to be pretty skeptical with the potential growth of e-commerce in Indonesia. Despite the wave of investments made by local and foreign companies to be top players in the country, I was not completely convinced the market would mature in a short time. My experience first time ordering from Lazada Indonesia (lazada.co.id) sort of confirms it. But not because of the market, but Lazada itself.
Hari Belanja Nasional: Indonesia’s Black Friday
This all began from bombardment of online and TV ads from Lazada for “Hari Belanja Nasional” or National Shopping Day which is basically a marketing campaign by Indonesia’s big e-commerce players to promote what would be similar to Black Friday in United States. The date is December 12 (12/12). They certainly went all out for this, placing the ads during TV broadcast prime times.
Out of curiosity, I started looking at Lazada for interesting items for me to add on the wish list then wait what would happen on the big day. While not as crazy as Black Friday deals that you would see from US-based e-tailers, Lazada offered a range of coupon vouchers with values ranging from US$16-400 depending on your shopping cart total value. Not bad, enough to persuade me to become a customer.
Lazada Indonesia’s product catalog is quite extensive and you can see they have managed to bring in big brands, more than enough for anyone to find something they need or want. There are 13 main categories, ranging from customer electronics to sports and outdoor. Similar to Amazon, Lazada sells items direct and also from third party merchant partners.
In overall most of the products have decent information but still very far from adequate when you are seeing them as “Amazon of South East Asia” as some media claim.
- Minimal specification details for their electronic products. Take LED TV for instance, most of them do not have information about input/output options which is quite essential in my opinion. You have to google and find it from other sites. Guess where I got mine? Amazon.
- Censored review. I mean in a quite extreme way. Browsing through the catalog, I probably could only find one or two products with overall rating of 3 stars. Most of the products would be 4+ stars. Basically a statement, “everything we sell is great.” When I tried to add a review, after submitting it was pending for verification. No wonder.
I ended up placing three orders. One was for a Yamaha soundbar valued at around US$625. The other order was a tricycle for my nephew’s long delayed birthday gift. Both were sold by third party merchants and not stocked directly by Lazada but qualified for free shipping. Checkout process was pretty straightforward, after creating an account, it asked for shipping and billing addresses, then payment method. It offers 4 options for payment:
- Cash of Delivery (limited area and only items sold direct by Lazada)
- Credit Card (Visa/MasterCard)
- Bank Transfer
- BCA KlikPay (e-payment product from one of the biggest banks in Indonesia)
In case you are wondering about the third order, I actually had to re-order the tricycle. Details below.
Issue #1: Order Processing Time
I chose to use credit card as payment because I thought it would be most convenient for me as the customer. The bank provider sent instant SMS notification immediately after the order had been placed. That quite settled that the transaction went through without any problem. An email was sent by Lazada to confirm the order and notify that the transaction was under verification process and I would be re-notified within 24 hours when the order was ready to be shipped.
My immediate question at the time was what needed to be verified? I thought the idea of using a payment gateway to accept credit cards was for instant verification and the amount should be automatically blocked from the credit card limit. I tried to follow their rules though.
Things got bad when after 24 hours I had no follow-up and nothing had changed with the order status. Contacting their customer service through live chat did not help either. The responses were slow, probably because they were serving other customers with similar cases, and they only followed the standard of procedures when responding the inquiries. I am pretty sure I could be more patient should they were able to actually explain the cause of delay transparently.
After bugging them for 2 days, my order was finally verified and forwarded to the supplier after almost 60 hours.
Issue #2: Order Cancellation
The other issue I had was caused by a mix-up after cancelling my second order. A couple of hours after ordering the tricycle, I noticed that price dropped over 10%. I suspected the merchant had just updated the price after receiving the order. Since my order was still under “verification” status, I contacted Lazada’s customer service to check if it would still be possible to cancel my order without getting my credit card charged. She said yes and after requesting my confirmation, she cancelled it. I then re-ordered the item with the latest and lower pice.
I was quite shocked when the next day I checked on my credit card’s Internet banking that the transaction that was supposed to be cancelled was still charged into my card. It seemed that the department who handled the transactions did not pay attention to orders’ statuses and just captured all outstanding transactions.
To make things worse, when it comes to this matter the customer service was practically only the listening ears and could not provide satisfying response to my frustration. They said that cancelled orders would be refunded within 14 working days. But that was not the point, I was disappointed that the supposed to be cancelled transaction had been captured in the first place. If this is their standard of operations, I think it is certainly something that can be improved.
They eventually did things right though. To avoid further disappointment from a customer, they expedited the refund process and it was credited into my credit card balance without 48 hours. They even called to explain about the mix-up and apologize. A very simple but valuable gesture.
Will I Order Again from Lazada?
While they are still not 100% there yet, I believe they are doing the right things in terms of offerings and ensuring customer satisfaction. I would probably do a few more test orders in less busy time (for them) to truly see their standard quality in handling the orders.
Serving potentially 300 million customers in Indonesia is not an easy job, especially since most of them are not completely familiar with pure B2C e-commerce models. However if they are doing it right, they may generate more revenue than Amazon. Just look at Alibaba.
If you google about Lazada you may find many blog and forum posts, mostly in Bahasa, about some terrible experiences by customers. But I am going to give them a benefit of the doubt. Changing how the market perceives e-commerce is challenging task. It is not just about acquiring the best price, but to be able to abandon going to malls to find the products you are looking for with the assurance if they are not as good and you expected you can simply return them with not much hassle.
It will be interesting to see how far e-commerce will grow in the country in the the next few years.
The Story Behind Lazada
(Excerpted from VentureBeat)
Lazada was founded by German incubator firm Rocket Internet and claims to be Southeast Asia’s “largest online shopping mall,” which means it’s very similar to online retailer Amazon in a market that’s growing like crazy. It’s known for selling electronics, apparel, cosmetics, books, and more to customers in Thailand, Indonesia, Vietnam, and other countries in the area. And like Amazon, it also offers free shipping on many items, free returns (within 14 days), and more.
Lazada has raised over US$500 million to secure its position as a dominant force in e-commerce in Southeast Asia.