The warehouse is one of five that Lazada has opened across Indonesia to cut costs and expand its reach in an archipelago whose 17,000 islands are sprinkled across an area bigger than the European Union.
Chinese tech firms, including Lazada’s top investor, Alibaba Group Holding, have poured at least $6bn into nearly every aspect of Indonesian e-commerce.
Lazada uses Alibaba’s inventory management systems and has tied up with ride-hailing companies, often using their motorbikes to deliver goods in a country with creaking infrastructure and traffic-clogged cities.
The payoff could be huge. It is a market forecast to grow from about $7bn last year to $63bn by 2027, according to Morgan Stanley.
“Indonesia, both in terms of the customers and behavior, is a very unique challenge and we need to adapt,” Florian Holm, co-chief executive at Lazada Indonesia, told Reuters.
Timely, incisive articles delivered directly to your inbox.