Lazada, the Southeast Asia-focused online retailer founded by Germany's Rocket Internet, plans to double the number of warehouses in the region over the next few years to keep up with a surge in e-commerce from customers outside big cities.
Lazada, which currently has 10 warehouses, expects to add up to three warehouses over the next year, and expects to further increase that to a total of 20 in the next three to four years, CEO Maximilian Bittner told Reuters. The Singapore-headquartered firm counts state investor Temasek among its investors.
"The demand is growing faster in the smaller cities than the capital cities," Bittner said. "You have a growing middle class (in the smaller cities), who has disposable income and they want to spend their money."
Online sales account for less than 1 percent of all retail in most markets in Southeast Asia, but is growing rapidly as the middle class expands and Internet-enabled mobile phones become more widespread.
Consultant AT Kearney estimates online shopping could grow an average 25 percent annually in the region over the next few years.
Lazada operates in Singapore, Malaysia, Indonesia, the Philippines, Thailand, and Vietnam and has no immediate plans to expand beyond those countries, Bittner said. The e-tailer, however, was keeping an eye on emerging markets like Bangladesh, Cambodia and Laos, he added.