Lazada is the leading eCommerce platform in South East Asia and the gateway to the world’s fastest growing eCommerce market. It’s also an open platform, that enables sellers from Hong Kong, Europe, Mainland China, and the United States to tap into a large and growing market in Vietnam, Thailand, Singapore, and Malaysia with very low upfront costs.
In this article, I explain why and how you can start selling products on Lazada, via their Hong Kong logistics center or from within South East Asia.
This is covered
- In which countries is Lazada available?
- Why should I sell products on Lazada?
- Why overseas Lazada sellers should register a company in Hong Kong or Singapore
- Lazada seller fees
- Order fulfillment options
- Cash on delivery (COD) and other payment options
In which countries is Lazada available?
Lazada operates in all major ASEAN countries, including:
- Vietnam (Lazada.vn)
- Singapore (Lazada.sg)
- Malaysia (Lazada.com.my)
- Thailand (Lazada.co.th)
- Philippines (Lazada.com.ph)
- Indonesia (Lazada.co.id)
Note that Lazada is not only open to sellers based in South East Asia but open to sellers worldwide, including Hong Kong, Mainland China, Europe, and the US.
Further, you only need one account to start selling across all Lazada platforms. Think of it as the Amazon or Taobao of South East Asia.
Why should I sell products on Lazada?
South East Asia is currently the fastest growing eCommerce market in the world. Yes, it’s actually growing faster than Mainland China. Thanks to Lazada, companies worldwide can start selling products all across the ASEAN nations, from one platform.
Companies selling on Amazon, or even on Tmall, may take that for granted. But, we shall not forget that ASEAN consists of several, very different, countries. Nor is it a single market comparable to the European Union.
The fact that Lazada sellers can offer cash on delivery as a payment option when selling cross-border into Vietnam, Malaysia, or other ASEAN nations, is amazing.
I even dare to say that Lazada is the first true cross-border eCommerce platform.
It’s also a market with plenty of room for new sellers. Compare that to China, where it’s expensive to break into the eCommerce market today. In addition, Lazada as a platform is far more open than, for example, Tmall Global or JD Worldwide.
If you’re looking to Asia and want to break in, Lazada is the place to be in 2019 and beyond.
Yet, Lazada is still barely on the radar for many eCommerce companies in the US, Europe and elsewhere.
Lazada is, as mentioned, open to sellers worldwide. Lazada serves cross-border sellers (which is any company based outside ASEAN) from their Hong Kong logistics hub, which I will cover in greater detail.
Note that you don’t necessarily need to set up a company in Hong Kong to use the Lazada fulfillment hub in the city – but it can make sense to set up a company to import and store bulk shipments into Hong Kong.
Another option is to register a subsidiary in Singapore, where Lazada itself is headquartered. Lazada has, in the past, temporarily suspended new cross-border seller registration. In case this would occur in the future, setting up a company entity in Singapore is a good alternative to a Hong Kong limited company.
In the end, both Hong Kong and Singapore are among the best and easiest places in the world to incorporate a limited company.
Seller Fees Overview
Believe it or not, but Lazada sellers don’t need to pay any fixed or monthly charges to create an account and start listings products on their platform. Instead, Lazada is only charging a 2% payment fee and a 1 – 4% cross-border order value commission*.
- No setup fees
- No monthly charges
- Low sales commission (2%)
- Low cross-border order value commission (1 – 4%)
By comparison, Tmall Global is charging well over US$10,000 for new sellers, upfront. Amazon.com, which has a different model, is charging professional sellers US$40 per month, and per-item selling fees.
Keep in mind that Lazada will likely charge sellers more in the future, as they grow their userbase. But for now, the upfront fees are very low.
Note: Different rates may apply depending on whether you are an overseas (non-ASEAN) seller or based in ASEAN.
*Different rates (up to 8%) apply when selling cross-border to Vietnam.
Lazada offers two primary delivery options for Lazada sellers:
- Option A: Lazada Global Shipping (LGS)
- Option B: Self-managed delivery
Option B is exactly what it sounds like. You manage the order fulfillment directly to customers, on your own, or via a 3PL partner.
But, what you’ll probably find really interesting is Option A.
a. Hong Kong Fulfilment
Lazada operates cross-border warehouses in Hong Kong, Mainland China, and Korea. Rather than shipping directly to a customer in ASEAN, you send your products directly to Lazada’s sorting center in Hong Kong.
From here, Lazada takes care of the rest, including returns.
They do, as I mentioned, also have sorting centers in Mainland China and Korea, but these centers are only used for domestic sellers in these respective countries. Sellers in the United States, Europe or Australia are instructed to deliver products to Lazada’s center in Hong Kong.
The best option for western sellers is to simply send bulk shipments (e.g. 500 pcs) to a warehouse in Hong Kong and arrange delivery to Lazada’s sorting center. If you don’t want to arrange the delivery yourself, Lazada can pick up the item from your partner warehouse instead.
Further, you can also manage this operation by setting up a Hong Kong limited company and business bank account, which is made easy thanks to companies like Neat.hk.
This makes perfect sense, as Hong Kong is a free port, meaning that you don’t need to pay import duties when the goods go into Hong Kong.
b. ASEAN Fulfilment
Another option is to import the products into an ASEAN country, such as Vietnam. Companies such as Boxme.asia can help foreign ecommerce companies import and store products in Vietnam, for ASEAN-wide delivery, without the need for sellers to register a local company.
Once you receive an order, Boxme.asia can then arrange delivery to a domestic Lazada sorting center, for further delivery to the final customer.
c. Shipping labels
Upon receiving an order, you can print the shipping label directly from your Lazada account. This shipping label must be attached prior to handing over the package to Lazada.
Customers on Lazada have the right to return a product they don’t like. Luckily, Lazada takes care of cross-border return for you. Assuming you use the Lazada sorting center in Hong Kong, they’ll take it back to the origin sorting center.
Lazada shoppers can select from the following payment options:
- Credit Card
- ATM Card
- Cash on Delivery (COD)
Cash on Delivery may seem outdated in many parts of the world, but it’s by far the most popular payment option in South East Asia.
Lazada offers Cash on Delivery not only when buying from domestic sellers, but also when ordering from cross-border sellers in Hong Kong and other places outside of ASEAN.
As far as I know, Lazada is the first platform offering cross-border cash on delivery payments. Without their infrastructure, it would essentially be impossible for cross-border sellers to break into the South East Asian eCommerce market.
Can I sell on Lazada from outside ASEAN?
Yes, you can sell products from anywhere. There is already a large number of sellers based in Mainland China and Hong Kong. Sellers in Europe, the US, and Australia can ship products directly to the Lazada hub in Hong Kong, from where they take care of delivery to end customers in Vietnam, Thailand, Singapore, Malaysia, and the Philippines.
Do I need to register a company in an ASEAN country to sell on Lazada?
No, you can set up a company in Hong Kong, or use your existing entity. If you are serious about selling on Lazada, it makes sense to set up a company in Hong Kong, which can be managed online. Once you’re set up in Hong Kong, you can use this entity to register an account on Lazada and pay for all local warehousing and logistics costs.
Setting up a company in Hong Kong can be done in less than 2 weeks, and costs around US$1000. You don’t need to be a resident in Hong Kong or have any connection to the Chinese territory.
Can individuals sell on Lazada?
No, you need to have a registered company, and the documentation to prove that.
Do I need to set up one account for each country?
No, you can start selling on all Lazada platforms from one account.
How do I manage cross-border returns?
Lazada takes care of that for you. Assuming you intend to ship your products via the sorting center in Hong Kong, all returns will go back there. As mentioned, you don’t need to pay import duties in Hong Kong, making it an ideal corporate and logistics hub for all cross-border sellers.
Are any products prohibited for selling on Lazada?
Yes, there are several restricted items:
- Fake products
- Second-hand products
- Certain types of religious or political items
- Liquid items over 20 cl
- Items larger than 300 cm (L + W + H)
In short, Lazada wants you to sell brand new products, that fit inside a parcel. It’s not the right marketplace for vintage dresses or bedroom furniture.
Further, notice that products sold on Lazada are subject to laws concerning product safety and labeling in the target markets. Product compliance in Singapore is, for example, very different compared to Thailand or Vietnam.
Who owns Lazada?
Founded in 2012 by Rocket Internet in Singapore, Lazada is currently owned by Alibaba Group, based in Hangzhou, China. Alibaba Group also owns and operates China’s largest eCommerce platforms, including Taobao.com and Tmall.com.