Lazada CEO warns against ‘walled garden super app’ in tech

·3 min read
Lazada Group CEO Chun Li. (PHOTO: Bloomberg)
Lazada Group CEO Chun Li. (PHOTO: Bloomberg)

By Yoolim Lee

(Bloomberg) — Chun Li, who presides over Alibaba Group Holding Ltd.’s Southeast Asian unit Lazada, said digital companies in the region should steer away from creating walled-garden super apps in favour of more collaboration and differentiation.

“We should work together to build an open network in this digital economy, not a walled-garden super application or platform,” Li said in his keynote speech at Singapore Apex Business Summit on Tuesday, referring to lessons he learned from his experience in the U.S. and China. “All players should focus on what they do best.”

While Lazada has largely focused on online shopping, Southeast Asian peers such as Grab Holdings Ltd. and GoTo have expanded their apps to encompass everything from e-commerce and ride-hailing to banking. That resembles the approach of Chinese tech behemoths such as Tencent Holdings Ltd., many of which have built digital walls to protect their dominance and vast pools of user data. President Xi Jinping has over the past year launched a broad offensive against Big Tech, directing that platforms like Tencent’s WeChat open up to competition.

Lazada-parent Alibaba has long advocated for Tencent and other social media giants to open up their platforms or ecosystems, saying users should have more choices while craving access to the enormous traffic they generate. The social apps however have argued that such moves should be gradual to avoid marring the experience.

Li started his career in the U.S., holding senior management positions at PayPal Holdings Inc. and EBay Inc. He joined Alibaba in 2014 as chief technology officer for its business-to-business unit. In 2020, he was named Lazada’s group chief executive officer.

Lazada’s key focus areas are e-commerce, payments and logistics, the 55-year-old veteran technologist said.

Southeast Asia’s other big internet companies, meanwhile, are competing fiercely on fronts such as the region’s growing digital banking arena. Sea Ltd. — which operates online-shopping, mobile-gaming and financial-services businesses — has been expanding its food-delivery service in Southeast Asia, escalating competition with Grab, GoTo, Foodpanda and Deliveroo.

Grab, which claims to be Southeast Asia’s leading super app, is spending more to maintain its share in ride-hailing and food-delivery segments and to enter the grocery market. Its total spending on incentives more than doubled to US$583.5 million in the fourth quarter. For 2021 as a whole, incentive spending soared to US$1.78 billion from US$1.24 billion the previous year.

In the meantime, rival GoTo is pushing ahead with a stock-market debut in Indonesia valuing the ride-hailing, e-commerce and fintech company at as high as US$28.8 billion.

All the players “should not forget to collaborate while competing to give consumers and sellers the best choices in their focus areas,” Li said. Lazada, which was launched 10 years ago, now has more than 1 million active sellers and 150 million customers on its platform, he said.

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