Meet Magento Vietnam 2015

Building a leading e-commerce company

from scratch in Vietnam

Chris B. Beselin - who am I?

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Background

• Swedish national, living in Vietnam since 2012

• Educated in Stockholm and Beijing

• Background at one of Europe’s largest active ownership investment funds,Cevian Capital (AUM ca. 15 bnUSD). Retail company focus

• CEO of offline and online retail business in Sweden

• CEO & Co-founder of Lazada.vn

Today

• Founder & director of IT development company fram^ (team of IT engineers,ranked as top 2% of local talent pool)

• Also, Founding partner at Endurance Capital – active ownership in listedVietnamese companies with focus on consumer businesses

Agenda

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Lazada.vn – how did we build it?

Lazada.vn – what is it?

What does the e-commerce opportunity in Vietnam look like?

Lazada.vn – what were key challanges?

Q&A

Lazada.vn – an overview

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Main facts

• Founded in Feb 2012, site launched end or Mar 2012

• Tens of thousands of orders/day

• Over 1,000 staff locally in Vietnam (including regional tech hub for restof Lazada countries, also based in Vietnam)

• Main office on Hai Ba Trung, Ho Chi Minh City, additional offices anddelivery hubs all over Vietnam

• Started out as an inventory-based ‘traditional Amazon model’, now ismajority ’Marketplace-based e-commerce’

• Recently featured on techinasia.com’s list of global online companiesvalued between 1 - 5 billion USD

Lazada Group – an overview

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Lazada Group – an overview

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Agenda

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Lazada.vn – how did we build it?

Lazada.vn – what is it?

What does the e-commerce opportunity in Vietnam look like?

Lazada.vn – what were key challanges?

Q&A

Early days…

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“Ecommerce will not work in Vietnam – people here like to touch and feel… ”

• Ramping up from 1 to 350 employees in 4 months…

Early days…

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No products, no data - what to do?

• We learned the hard way….

Marketplace

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Shifting the market leader from Amazon to Alibaba

• We got everything wrong – so we changed like humble work ants…

Mobile

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Why do Indian e-commerce players go mobile only?

• Don’t want to make same mistake as what is killing offline retail

• User is always logged in – a lot more user feedback and amazing data!

• Captivity is a balance

Agenda

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Lazada.vn – how did we build it?

Lazada.vn – what is it?

What does the e-commerce opportunity in Vietnam look like?

Lazada.vn – what were key challanges?

Q&A

What do people get wrongabout online payments in Vietnam?

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COD is not an obstacle, its an enabler!

• Isn’t it risky and expensive to run a >50 000 order / day e-commercecompany based almost entirely on cash payments (>90% COD)?

What does it take to build a robust logisticsbackbone?

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• It only takes three simple things: Pay on time, deliver on time, report ontime…

• You need to set your own standards, then be ready and able to walk awayfrom underperforming partners

How can you trust 3rd party merchantsto sell through your platform?

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• To allow anyone access to your platform & your customers is a scarymodel

• You need to be hands on – who are you really making business with?

• You need to have rock solid principles – 2 strikes your out!

Agenda

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Lazada.vn – how did we build it?

Lazada.vn – what is it?

What does the e-commerce opportunity in Vietnam look like?

Lazada.vn – what were key challanges?

Q&A

20 million more Vietnamese online over past 5 yearsalone- that’s 2x my entire home country, in only 5 years!

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0% 1% 2%4%

8%

13%

17%

21%

24%27%

31%

35%

40%

44%

48%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Vietnam internet penetration

Source: World bank

Is the challenge different today?

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What does the landscape look like today?

• The bets that the big players are making are becoming BIGGER!

• Business is no longer about BIG eats SMALL, its about FAST eats SLOW

How to play and how to play to win?

• Like every venture: Start, but start small. Plan/dream BIGGER!

• You need to establish your ‘right to exist’ clearly from day 1 (e.g. a vertical niche)

• Keep a five year vision of change in market and consumer behavior. We will bethere in no time.

• Be hands on, YOU GO ON THE SITE, EVERY EVERY DAY!

The opportunity

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Offline retail never had enough time to develop a proper footprint

• Modern retail is severely under developed

• General assortment choice has historically put a lid on consumption in ruralareas

• Shopping has historically been extremely inconvenient (multiple shops, busytraffic, etc)

This is the perfect backdrop for achieving a disproportionally high ecommerce penetration

• Similar / better than Chinese market conditions that allowed Alibaba to achievemore than explosive growth

• Not if, but how much more important ecommerce will be in VN than e.g. Europe

Agenda

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Lazada.vn – how did we build it?

Lazada.vn – what is it?

What does the e-commerce opportunity in Vietnam look like?

Lazada.vn – what were key challanges?

Q&A

Meet Magento Vietnam 2015

Thanks for listening!