Building a Fashion Empire: Zalora is Asia’s largest fashion e-commerce site
The company specialises in everything from clothing and accessories to footwear and beauty products. But it takes more than a wide reach and product selection to make a successful e-commerce site, according to Magnus Grimeland, co-founder of Zalora and managing director of Global Fashion Group, the company which acquired Zalora a little over a year ago.
“I think what differentiates us from a lot of other fashion e-commerce sites in Southeast Asia is that we have invested a lot into the customer experience,” Magnus Grimeland explains. “For example if you are in Bangkok, Jakarta or Singapore, you can get your orders delivered the same or the next day, and in the rest of the countries we deliver very quickly and reliably. When we tell you when we will deliver, we deliver at that time. In general, we make it very easy for the customer to return their purchase, which is very important to us because with online shopping it is very difficult to get the right sizing the first time around.”
“Our strong local reach also allows us to do things like cash on delivery. In most of our markets in Southeast Asia you can purchase a product and only pay when it arrives on your doorstep. So you don’t have to bother with entering in credit card info. A lot of our customers also don’t have a credit card so it is a good solution for people without a bank account.”
According to Magnus Grimeland, it is this combination of great customer experience and a huge and ever growing selection of products that have enabled the company to expand so rapidly. “Our expansion strategy is to focus on the countries where we believe we can deliver a good customer experience. That means all of the Southeast Asian countries where we believe the infrastructure is in place,” he says. “Sometimes we work together with local partners to create that infrastructure but of course one of the main criteria is that there are a certain amount of people on the internet and that it is possible for us to build the infrastructure to deliver quickly and reliably. Secondly, we try to ensure that we expand as quickly as possible because in e-commerce both you and the customer benefit from scale. The bigger you are, the more products you can offer and the lower shipping costs you have, so you can deliver better prices to your customers. Also, with scale you can to do everything better and more effectively.”
A little more than a year ago, Zalora was merged into Global Fashion Group and Magnus Grimeland went from being one of the founders and managing director of Zalora to becoming managing director of Global Fashion Group, The group operates in 27 countries, including countries in South America and the Middle East as well as Russia and India, amongst others.
“We operate in very varied countries,” says Magnus Grimeland. “Some core characteristics are the same, however. What is very important in e-commerce is delivering a very good
“Central Group is a very strong group and a great new owner of the business in Thailand and Vietnam,” says Magnus Grimeland, managing director of Global Fashion Group, which acquired Zalora just over a year ago. “There are a lot of synergies between what Central Group and Zalora was doing there, so hopefully they can deliver an even stronger product in the years to come.”
According to Magnus Grimeland, who co-founded Zalora, there are huge benefits to new group that Zalora now is part of – the Global Fashion Group.
“We have gone from almost nothing to being part of a global group with access to 27 markets and we continue to see very healthy growth. There is a lot more value we can create both to our customers but also to the company as a whole and this is where partnerships are important. When we were running and building Zalora, we were learning from anyone we could learn from. Now we have six amazing e-commerce companies in the portfolio. Some things one company does really well and other things another company does really well. You can take the best of the best practices and experiences and learn from them and deploy them in other parts of the region.
“It is rare to have an e-commerce group that has a global presence across all these markets, especially for fashion, so we have a unique value preposition that we can offer to our suppliers and partners that again will benefit the customers. What I’m focussing on now is realising all that value and ensuring that we reap the rewards from all this potential that we have. Most of our markets are in are in the same situation as Southeast Asia: e-commerce penetration is low and growing and the fashion market is growing. We are in the middle of this, having already built a very good platform and a good customer experience that we can only make better. So I’m very positive about the future and I think we will just continue doing more of what we do today.”