In The Checkout this week, we look at Zaloraâs plans to become an ecommerce enabler and discuss what the ShopBack layoffs say about the ecosystem. [Read from your browser]( The Checkout ð
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--------------------------------------------------------------- Welcome to The Checkout! Delivered every fortnight, this free newsletter breaks down the biggest stories and trends in ecommerce. You can find past issues [here]( or [sign up here]( to receive future newsletters. Also, If youâre not a subscriber, get access by [registering here](. IN FOCUS In today's newsletter, we spotlight: - [Zaloraâs opportunity to become an ecommerce enabler for fashion brands](
- ShopBack layoffs a sign that the ecommerce hangover isnât over
- [Seaâs upbeat outlook for Shopee - and whether or not it can live up to the hype]( --------------------------------------------------------------- Hello {NAME} Iâve been accused of being an enabler. Nowadays, the term is used in the context of a person who supports someone elseâs bad behavior. This often comes from a place of good intentions but is not a positive trait. In business and tech, an enabler has a decidedly more positive meaning, referring to one that makes something possible. Zalora wants to be that for brands looking to sell more online. As my colleague Melissa notes in this weekâs featured story, its experience as a fashion-focused marketplace can be an asset in helping brands with digital sales, especially in areas such as logistics. The big pain point in fashion is returns - about 24% of online apparel orders are sent back - and Zalora has the specialized skills and infrastructure to manage this process. However, the market for ecommerce enablers in Southeast Asia is crowded, with players such as aCommerce and Synagie offering end-to-end solutions. While Zaloraâs background as a marketplace gives it certain advantages, it also leads to questions about whether it can support brands across all trade channels they want to sell on - even if this includes competitor platforms. Meanwhile, in this weekâs Hot Take, I look at ShopBackâs just-announced layoffs and what they tell us about the state of Southeast Asiaâs ecommerce sector. -- Simon
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--------------------------------------------------------------- THE BIG STORY [Zalora forges new identity as ecommerce enabler, seeks growth beyond marketplace]( Between 2022 and 2023, gross merchandise volume of third-party brands using its fulfillment and last-mile delivery solutions grew over 300%.
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THE HOT TAKE ShopBack layoffs a sign of sustained ecommerce weakness Hereâs what happened: - ShopBack [reduced its headcount by 24%]( with the job cuts affecting 195 people.
- Co-founder and CEO Henry Chan said the layoffs were an â[absolute last resort](
- The cashback platform is aiming to âbecome more focused and self-sustainable.â Hereâs our take:
Layoffs are difficult decisions, and ShopBackâs co-founder said it was âone of the hardestâ he had to make in the companyâs history. One out of every four employees has been affected, similar to the [job cuts]( at ecommerce platform Lazada earlier this year. However, ShopBackâs severance package is less likely to raise eyebrows compared to Lazadaâs panned [initial offer](. In addition to a minimum of [two months of pay in lieu of notice]( those affected will also receive one month of pay for every full year of service, as well as a bonus equivalent to one month of pay. An employee who has been with ShopBack for two years, for instance, would receive around five months of salary as severance pay. This may seem like cold comfort, but it would provide them with some buffer as they look for new opportunities. Chan told employees that he opted for âa more substantial reductionâ in order to âminimize the chances of us ever having to do this again.â While morale will definitely take a hit, this should assuage the concerns of those who remain with the company and is preferable to rolling layoffs. These job cuts are a hangover from the era of low interest rates and the pandemic, which supercharged ecommerce transactions. As Chan acknowledged, from 2021 to early 2022, âthe economy favored expansion over sustainability,â and he âmade the mistake of pursuing too many directionsâ and expanding too rapidly. The downsizing of the industry has affected all aspects of the ecommerce chain, from sales platforms to logistics providers, as well as companies like ShopBack that offer ancillary services to the sector. Ecommerce firms will have to find ways to double down on their strengths or explore new lines of business - hopefully ones that offer higher margins. There are tentative signs of a recovery. Both Shopee and Tokopedia have reported growing merchandise volumes in their most recent quarter - up by 15% and 5%, respectively, from the previous one. Yet, the environment remains uncertain, and both firms have become more cost-efficient by squeezing other players in the ecosystem. Unfortunately, we wouldnât be surprised to see more layoffs to come.
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NEWS YOU SHOULD KNOW Also check out Tech in Asiaâs coverage of the ecommerce scene [here](. 1ï¸â£Â [GoTo Group logs adjusted profit for Q4, plans to buy back $200m worth of shares]( The company expects to break even on a group-level adjusted EBITDA basis this year. 2ï¸â£Â [India-based Jumbotail nets $18m amid tough B2B ecommerce market]( The company aims to be âfully profitable on an operational basis across our entire network before the end of 2024,â said co-founder Ashish Jhina. 3ï¸â£Â [Alibabaâs Freshippo shifts leadership after shelved IPO]( The grocery firm will now be headed by Yan Xiaolei, who previously served as its CFO. 4ï¸â£Â [Lazada Logistics Indonesia CEO steps down]( Philippe Auberger had been with Lazada since 2015, previously serving as the country manager of Lazada Express in Indonesia. 5ï¸â£Â [Carsome appoints ex-Jardine exec to COO post as it eyes IPO]( Eric Chanâs career in the automotive industry spans three decades and includes leadership roles in Jardineâs Singapore and Malaysia units. ---------------------------------------------------------------
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FYI [Seaâs upbeat outlook on Shopee drives enthusiasm, but can it deliver?]( Sea Group ended 2023 with more than US$8 billion in cash, short-term investments, and other liquid securities. --------------------------------------------------------------- Thatâs it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your âedit profileâ page and choosing that option in our preference center. See you soon! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails?
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