Singapore-based e-commerce giant the Lazada Group will boost its range of financial services products and expand into other more lucrative, but also riskier, offerings such as trade financing. A mobile payments system might also be in the offing.
Lazada's push to expand its financial products mirrors that of its owner, the Alibaba Group. Alibaba is also known outside China for its loans to small businesses and its mobile payments system Alipay. Operated by affiliate firm Ant Financial, Alipay is one of China's two major payments platforms.
Lazada already offers credit lines to small and medium business on its platform in partnership with small businesses financing platform, Finaxar. The next step for Lazada might be more financing products to make loans more efficient.
Lazada's new CEO Pierre Poignant said financial services could become a big part of the company's future, and the company is committing more resources to this new endeavor. Lazada operates an electronic wallet that allows people to buy and sell products on its online platform.
"The next steps are financing, more rewards to our wallets, so we will continue to invest in that direction," said Poignant.
He said that using its data, Lazada will be able more precisely assess the loans. The way forward here will be for Lazada to be more efficient, faster and bigger. Lazada will also venture into other financial products.
"For example, something which is very, I think, promising is trading financing across countries which we will also look into," according to Poignant.
Poignant pointed out trade financing is an expensive process, particularly for smaller businesses, "but it could be a multi-billion dollar opportunity for Lazada."
By offering more financial services to businesses, Lazada can keep these merchants inside its ecosystem through the data Lazada collects.
"I think, as part of the Alibaba economy, the vision of the group is to have an economy of 2 billion people and millions of SMEs (small and medium-sized enterprises)," noted Poignant.
"We have the data to understand both origin and local, so we can basically have a very accurate prediction of the demand and the supply chain, and therefore, we are able to provide super products when it comes to financing."
