Sunway University’s Gan Chin Chuan said Southeast Asia’s largest e-commerce operator is now moving towards a more mature stage with a stable and scalable growth trajectory.

Gan, the assistant head of Sunway Business School’s marketing strategy and innovation department, said Lazada’s performance indicates that the industry as a whole is evolving, moving past initial hurdles and beginning to achieve sustainable profitability.

It also reflects broader economic trends within the region and suggests growing consumer confidence in the digital economy, with more people embracing online shopping as a reliable and preferred option, he said.

“Lazada’s success can also inspire greater confidence among investors and other digital businesses, potentially leading to further innovation and investment in the region,” Gan told FMT.

He was commenting on news reports last week that Lazada saw its Ebitda turn positive for the first time in July, with CEO James Dong attributing it to the company’s business strategy.

In a meeting that was “live” streamed to all employees, Dong was reported as saying the Ebitda-positive status proves the effectiveness of Lazada’s business strategy, and that Lazada will continue to increase active investment in the Southeast Asian market under a sustainable operating model.

A Lazada insider who spoke on condition of anonymity credited its positive Ebitda to some initiatives the company has taken since last year to improve efficiency.

These include enhancements to its supply chain and user experience through optimised logistics, user incentives and utilising artificial intelligence-enabled tools in its operations.

Locally, the company has also launched several initiatives, including a Lowest Price Guarantee and its Choice business aimed at value-seeking consumers in Malaysia.

Improvements have also been made for LazMall, which has achieved double-digit year-on-year growth for Lazada, including enhanced returns and refunds as well as priority shipping.

Gan agreed that Lazada’s success can be attributed largely to initiatives introduced since 2023, such as LazzieChat, the first eCommerce AI chatbot of its kind in Southeast Asia.

“This innovation not only improves operational efficiency but also fits well with broader consumer trends,” he said.

He cited a recent survey by Harris Poll & Rokt which revealed that AI-powered shopping assistants, like chatbots and voice assistants, are gaining traction among online consumers, with 35% of respondents finding these tools useful for discovering new products or services.

On Lazada’s decision to focus on Southeast Asia and broaden its international sales as China’s growth slows, Gan said it is “strategically sound”.

The Southeast Asian market remains relatively underserved, he said, providing considerable growth potential compared to the more saturated Chinese market.

Gan said a 2023 survey by Google, Temasek Holdings, and Bain & Company showed that the region’s e-commerce market was worth about US$139 billion, with projections to hit US$186 billion by 2025.

While Indonesia leads in market size, and Vietnam and the Philippines are also expected to grow substantially, all markets in Southeast Asia are set to see impressive expansion in the coming years, he said.

“By increasing its investments in Southeast Asia, Lazada is expected to dominate a larger share of this rapidly growing market.”

However, Gan said, Lazada’s success will depend on its ability to enable its strategies to adapt to the diverse cultural, economic, and regulatory environments of each Southeast Asian country.

Meanwhile, an industry observer said one of the biggest contributors for Lazada’s Ebitda positive turn, despite intense competition from rival Shopee and newcomers like TikTok Shop, was its investments in building a comprehensive logistics network.

This includes cross-border shipping, warehousing and customs clearance to local last mile delivery.

“By managing the entire logistics fulfilment process, Lazada has improved the efficiency of delivery and controlled cost, minimising its impact to consumers,” said the source who declined to be named.