PowerPoint Presentation

101 on category management 1The Lazada Group - Southeast Asias largest e-Commerce Company

Strictly confidentialAgenda2IntroductionPeopleFrameworksDataProcessesWelcome to the category management role! You are embarking on the most dynamic, challenging and (hopefully) fun job you will ever have!Your key duties are to meet target revenue and margins by:Making the customer happy! Customer comes first Setting the strategy for the category to meet targetsManaging the KAMs/buyers to ensure amazing deals, quality assortment, sufficient inventory and competitive pricesCoordinating with merchandisers/marketing to ensure the products KAMs/Buyers have gotten are pushed Building relationships with key brands, merchants and suppliers to grow revenueReporting performance and activities to management 3Congratulations! You have an awesome job! This is what you need to doAgenda4IntroductionPeopleFrameworksDataProcesses5The regional teamCEO (Max)Chief Commercial Officer (Tim)Chief Finance/Marketing Officer SteinChief Product Officer SohilChief Technology Officer EugeneChief Information Officer KlemenThis is your teamCEO MaxChief Commercial Officer Tim6Head of EL categoryThe EL regional teamEL1 Regional Category Manager ChristabelEL1 MerchandizerJohannEL2 Regional Category ManagerJustineEL2 MerchandizerPiaEL1 AnalystLouisEL2 AnalystFebbryID EL1 Category ManagerKarthik/ MikhaMY EL1 Category ConsultantAmirPH EL1 Category ManagerJanet/JanTH EL1 Category ManagerPulkitVN EL1 Category ManagerDongSG EL1 Category ManagerCareyID EL2 Category ManagerFanyaMY EL2 Category ConsultantTBDPH EL2 Category ManagerMichaelTH EL2 Category ManagerMarie SophieVN EL2 Category ManagerSteven/HarrisSG EL2 Category ManagerJazEL partnershipsMingZyad & Arsianne67Your immediate teamEL category directorMT category managerCL category managerEL MerchandizerBuyers / KAMs..Buyers / KAMs..Buyers / KAMs..Buyers / KAMs..EL partnershipsCCORegional category manager EL1/2Head of EL categoryCountry CEO8You will also need to work with other teams on the ground! >> Get an introduction to these local teamsSourcingPartner supportFinanceBusiness IntelligenceTeamResponsibilitiesBuying goods to ensure ATP (availability to purchase) is stableEnsuring content on product page is good, multisourcingContentAnswering questions/ concerns from merchantsOpsMarketingInformationGetting potential customers to view our productsPaying you, merchants and suppliersGiving you the data you need to run your categoryMarketingFinanceVendor acquisition/ managementCommercialVA - gets and onboards new merchants, gets advice on which merchant to source from categoryVM manages smaller merchants Agenda9IntroductionPeopleFrameworksDataProcessesCategory management framework>> Electronic categories are very much driven by pricing and deals!10Assortment:Do you have the right products?DealsPrice:At the right price?Inventory:In the right quantities?Merchandising:And do people know about it?Merchants/suppliers: do you have the right merchants and suppliers ? Are your relationships with them awesome?Brands: partnerships with key brands take us to the next level!Team: is your EL team the best it can be?11Framework for keeping you sane: Short tail vs long tail>>you have 1,000s of SKUs, heres how to manage them all!TopicAchieving targetsEnsuring lighthouse skus are available on the siteAssortmentDealsPriceInventoryShort tailLong tailShort tailLong tailShort tailLong tailShort tailLong tailMerchan-disingShort tailEnsuring a quality assortment across a wide variety of subcats by having the right merchants through working with VANegotiating on price through KAMs/buyers on top 200-500 skusEnsuring competitive merchantsNegotiating on inventory through KAMs/buyers on top 200-500 skusEnsuring merchants with good ATPMerchandising IS short tailEnsuring deal quality top 50-100 skusEnsuring merchants upload storewide deals on their assortmentMerchants/ SuppliersShort tailLong tailSuppliers should only supply short tailMerchants which sell large portion of revenues managed by KAMsSmall merchants are dealt with Vendor ManagementCampaigns and dealsCutting prices - directly cutting prices on buying or telling sellers to lower prices on MPVouchers and extra discounts Push marketing e.g. Facebook and Line12Framework for increasing revenuesShort termMedium termLong termIncreasing assortmentRenegotiating margins and/or payment termsPull marketing channels e.g. SEM, SEOBrand partnerships! 13ViewRevenuesEasy fix?Kill itPotential best sellersBest sellersCR, PI and revenue are the main variables to select SKUs to pushBest sellersRank by revenues descending (recommended to use NMV MTD or M-1)Look at CR to make your choices

Potential best sellersFilter for PI above a certain limit(recommended to use PI last 7 days and use a limit around 100/week)Rank by PI ascendingSelect SKUs making good revenues already revenues among the lowest PI ones

Easy fix?Rank by PI descending(recommended to use PI last 7 days)Filter for boosting score below 90Identify SKU making very little revenues(validate that unit sold are low to avoid accs)Framework for choosing deals>> What kind of products should I push? 1/3Framework for choosing deals>> What kind of products should I push? 2/314Best sellers>> Top revenues generatorsPotential best sellers>> SKU selling well but not getting enough traffic to make more revenues>> Careful with niche products!Easy fix?>> Products getting a lot of PI but not selling well in the current state>> Need to check pricing and content first>> Careful with flagshipRising or falling starts>> Products selling a lot better than before>> Best sellers not selling as good as beforeIn the scorecard calculate the delta between the RR of MTD NVM and NMV M-1 to identify themDefinitions15Check pricing and contentPush to increase PIFalling starsRev going downRising starsRev going up Easy fixHigh PI but low revPotential best sellersLow PI but good revenuesBets No high PI or high Rev, but should be bestsellerBest sellersFramework for choosing deals>> What kind of products should I push? 3/3Framework for vendor meetings>> The 4 points below should always been discussed during meeting16Current performancesImproving their performancesAssortment developmentCampaigns &DealsInform vendors about their performances at Lazada>> Ranking at Lazada (per merchants, per brand, others)>> Rev (+ trend), unit sold (+trend), assortment size (per subcat + trend), their cancellation rate (% of orders cancelled by them)>> Best sellers (top 10)Discuss SKUs where we need more stock>> No more than 10 products (cf. ATP and coverage)Make pricing suggestion to vendors on specific items>> No more 10 products with suggested price (cf. competitiveness)Advise them on best performing terms and conditions>> Example: If you would deliver in 1 day instead of 4, you could x2 ordersDefine with vendor the next steps in terms of assortment development>> Subcategories, products, brands, price points, etc.>> Blend priority categories with 2nd tier categories>> Dont stop until we have full assortment>> Ask how they will do that, and maybe offer supportInform vendors about upcoming campaigns and ask for deals and promotions>> Give them insight of what is working>> Ask for specific product that they have, and also what THEY want to push>> As much as possible avoid committing on pushing specific products>> To negotiate a partnership, request a dedicated meeting with their marketing1234Note: If you want to address an Ops issues, better organize a separated meeting with Ops from vendor16Framework for campaign preparation 1/3>> Managing process is key to get good quality and enough deals17Define targets products>> Subcategories, price points, specs, brands, colors, etcIdentify with the team the best merchants to get deals>> At least 5 merchants per vendor managements>> Send standard email to tier 2 and 3 merchants with target products and pricesSelect the best deals>> Start with HOT DEAL>> Challenge team on Not a deal and No data, there are usually some good products>> Complete with Bet deals and best sellers2Monitor team activity>> Use a funnel approach to create a small competition (cf. slide 2/3)>> redefine action plan if neededCollect input in a Google Doc>> Should only be the very good deals>> Push team to fill the required fieldsAssess deal pipeline with formulas>> Should be very transparent (cf. slide 3/3)>> Communicate situation with team and management3a3c3b4117Framework for campaign preparation 2/3>> Funnel vision will help you create emulation in you team and get deals18

Contacting vendors to schedule meetingsMeeting vendors to introduce campaign and negotiate dealsCollecting list of feedbacks form vendorsTargeting vendors to contact123418Framework for campaign preparation 3/3>> Simple and clear assessment helps communication19

Short tail>> Ensuring quality products, price and stock for short tail>> Ensure total short tail deal value is approx. 50-80% of target1Long tail>> Ensuring good no.s of deals>> Ensure average discount is good2

19Marketing and Merchandising>> Letting the world know of the awesome deals we have at Lazada20

Source : Google Analytics (Lazada Thailand)

Main Marketing ChannelsConversion x traffic = revenueBetter deals bring in more traffic focus on getting hot killer deals on key selling SKUsGreater traffic Greater clicks More Orders More RevenueMore interaction with the regional marketing team = better optimization of marketing spendBi-weekly update on performance with every LCM + Weekly touch point with MerchandiserAgenda21IntroductionPeopleFrameworksDataProcesses22Lazada is run with 4 interfaces; the data which you use is typically from BOB or OMSData will provide an in-depth view of your category>> Reports currently available to steer your category23RevenuesMarginShare of MPContribution to countryATPBad stockWeekly KPI1x per week email + excelRevenues and evolutionUnits soldMarginsBad stockSKU level analysisAd hoc analysisOutright stock by SKUSummary of stock by color coding (Green, Yellow, Red, Black 1, Black 2Summary of coverage daysOutright reportWeekly by emailDaily revenues vs targetsTop 10 SKUs soldEL daily sales trendDaily email + excelLast week vs last last week NMVLast week top 20 SKUs by NMVLast week top 20 SKUs by biggest decline Last week top 10 Brands by NMVLast week top 10 merchants by NMVWeekly performance and charts1x per week email + excelMarket share by subcategoryBrand shareLazada Vs GFKQuarterly analysis against market Assortment size# of vendors per sub catRegional top sellers (top 20 per cat)Local top sellers (top 20 per cat)Local top merchants (top 10 per country)Brand analysisPrice point analysisAssortment analysisBi weekly email + excelDaily revenues vs targetsTop 10 SKUs soldLocal price, inventory and PIDaily email + excel23Local price, inventory and PI>> Daily report to manage price, inventory and deals for short tail24Purpose of the reportCheck price of short tailCheck inventory of short tailMonitor page impressions/ views and decide which deals to push

624EL Daily Sales Trend>> Daily dashboard to monitor overall performance25Purpose of the reportFollow key metricsRevenuesMarginShare from cross-borderTotal venture visits vs EL revenue over the last 7 daysTop 10 SKUs dailyDaily changes in revenue

625Weekly KPI>> Your high level dashboard to monitor performances at a glance26Purpose of the reportFollow key metricsRevenuesMarginShare of MPBad stock valueRead Retail and MP performances independently Deep dive at sub cat level to understand root causes

626EL Weekly Charts & Performance>> Last week performance and top/worst performers27Purpose of the reportFollow key weekly metrics and chartsRevenuesWeek on week growthTop 20 SKUs, Top 20 declining SKUs, Top 10 brands & Top 10 merchants Understand and replicate other country weekly best sellersDeep dive into worst performing SKUs to understand root causes

627EL SKU analysis>> Deep dive into SKUs level to understand root cause28Purpose of the reportIdentify SKUs that are causing:Decline in revenueDecline in marginDeep dive into these SKUs to understand possible root causes

628Outright inventory report>> Information on inventory age and coverage29Purpose of the reportIdentify the value of your inventory that are ageing and having too high level of coverage

Definition of the different color codes:

629Assortment and vendors analysis>> More high level information about assortment and best sellers30Purpose of the reportIdentify gaps in assortment by comparing with other countriesCheck the needs for more vendorsUnderstand and replicate other country best sellers

630EL Daily Sales Trend>> Quarterly report to compare performance against market and other ventures31Purpose of the reportCompare subcat and brand split between market and LazadaShow evolution of subcat split, market share and brand shareIdentify areas of potential where certain brands or sub cats may be under served

631What you always need to know>> Should be always to be woke up at night and give the answer32Bad stockATPShare of LH presentRevenues and growthTop prioritiesCampaigns to come20 Bestsellers itemsTop 10 merchantsTop 10 SuppliersContribution to country# of LH competitiveMarginShare of MPAgenda33IntroductionPeopleFrameworksDataProcessesSuggested weekly routine34MondayTuesdayWednesdayThursdayFriday9AM-10AMDaily Kick-offDaily Kick-offDaily Kick-offDaily Kick-offDaily Kick-off10AM-11AMBoosting and banners checkBoosting and banners checkBoosting and banners checkBoosting and banners checkBoosting and banners check11AM-12AMPrice/ATP checkPrice/ATP checkPrice/ATP checkPrice/ATP checkPrice/ATP check12AM-1PM1PM-2PMMarketing gdocs2PM-3PMRevenues CheckRevenues CheckRevenues CheckRevenues CheckRevenues Check3PM-4PMMarketing gdocs

Marketing gdocs

PREPARE FOR THE WEEKEND!4PM-5PM5PM-6PM6PM-7PMDaily Check-outDaily Check-outDaily Check-outDaily Check-outDaily Check-outSeller meetingsAd hoc communicationFollow-upsSeller meetingsAd hoc communicationFollow-upsMonthly agenda>> Excluding local specificities 35Monthly priorities review>> Between the 25th and 30th of each monthLast month priorities reviewDefinition of next month prioritiesLast month targets review Next month targets definitionWeekly call >> Every Friday with RCMSituation on prioritiesSituation on performanceKey highlights of past weekKey focus of next weekBeginning of the monthEnd of the monthFridayFridayFridayFridayMonthly and daily forecasts>> First week of each monthForecast sales for next month on target categoriesForecast daily NMVSupport monthly negotiations by leveraging our volumesValidated with country CCO35Monthly forecasts>> Defined daily and for whole month36Revenue targets are set monthly and dailyRevenue progress is tracked daily

Monthly priorities definition>> Defined together with the RCM priorities are the key focus of the month37

Monthly priorities are set between LCM and RCM and agreed with CCOMonthly priorities are shared with top management and discussed during commercial calls

Typical topics to be set as prioritiesAssortment development neededSpecific deals needs (campaign preparations or events)PartnershipsProcess implementationRecruitments topicsStock commitmentsBad stock clearanceMultisource allows product which are the same to be grouped togetherMultisource is important! It helps customers find productsProducts currently which are exactly the same are multisourcedWe do not multisourced refurbished with non refurbished, if there are differences in whats in the box, warranty etc38

Content uploads multisource relations and it is the LCMs job to ensure multisource quality is goodMultisource relations are uploaded for lighthouse SKUs chosen by RCM in agreement with LCMContent uploads multisource relations in a gdocThis gdoc is audited every 2 weeks prior to assortment call39

LCMs update new product launches to ensure we have an up to date shopThis should be updated regularly We regularly plan campaigns around new product launches40

Partnerships are a key source of revenue and are driven locally and regionally keep Ming in the loop of all partnerships!41

Appendix42Lazada Vocabulary and Acronyms RCM Regional Category ManagerLCM Local Category ManagerVM Vendor managementVA Vendor acquisition MP MarketplaceBI (Business Intelligence) Team within Lazada in charge of analytics and data managementBOB System managing the front end (i.e. the website)OWMS (Operations and Warehouse Management system) System managing the back end (i.e. the stock, the warehouse and operations)SC (Seller Center) System managing the interface between merchants and LazadaSalesforce System to manage vendors, used by all vendor managersWebtrekk System gathering data about traffic and sources (i.e. marketing channels performances)DSS Daily Sales summaryLH (Lighthouse SKUs) Particular items supposed to be potential best sellers (defined by: local GfK, regional best sellers list, and local best sellers list)ATP (Availability to Purchase) % of SKUs purchase on the website among total visible SKUsPI (Page impression) Number of views on the pageCR (Conversion Rate) Number of items sold/ Number of PICommissions Commissions charged to MP merchantsNMV Net Merchandise valueGM1 = RRP - COGSGM2 = GM1 - discountGM3 = GM2 - vouchersPC1 = GM3 + Basket fee + COD fee + installment feesPC1.5 = PC1 - delivery costsPC1.75 = PC1.5 - pick up costsPC2 = PC1.75 - PC2 salaries - Payment costs - Warehouse rent - Other PC2 costsPC3 = PC2 - Mkt costsPC4 = PC3 - overhead costs43Lazada Vocabulary and Acronyms Impressions: how often our ad is shownClicks: how often someone clicks on your adCosts: the total amount we paid for our adsCost Per Click (CPC): the average cost we paid for each click on our search ad(s)Click-Through-Rate (CTR): the percentage of ad impressions that resulted in a clickConversion Rate (CR): The percentage of visits that resulted in an e-commerce transactionOrders: the total number of completed purchases on LAZADA siteNew Customers (NC): the total number of completed purchases by new customersCost Per Order (CPO): the average cost we paid to generate an orderCustomer Acquisition Cost (CAC): the average cost we paid to acquire a new customer44Marketing metricsNet earnings and drivers45Approximate commissions (pls get latest from your country)46