TOPIC IMPROVING PRODUCT WARRATY SERVICE IN LAZADA

TOPIC: IMPROVING PRODUCT WARRATY SERVICE IN LAZADA I INTRODUCTION: Overview of e-commerce market: - Online retailing (E-retailing) is a form of electronic commerce (E-commerce) that allows users to directly purchase products or services from suppliers, organizations and enterprises on the Internet (through the Web browser) The advantage in the market have helped online retailers become increasingly popular and growing - Specifically, in early 2014, according to the Ministry of Industry and Trade, there was more than 92 million people of which 39% of the population access the Internet and 57% of them make a purchase online And the number of Internet users is expected to increase from 28 million in 2011 to 43 million in 2016 (according to Euromonitor), along with the rapid development of high-speed Internet connection to help consumers easily access form of online shopping, and bring to market a prominent advantage In addition, changes in lifestyle such as time-saving & cost-saving has increased demand for convenience and made online shopping channels increasingly attracted much interest of consumers By Vecita’s estimates, the e-commerce market is currently worth $700 million and will grow to $1.3 billion by 2015 Overview of Lazada: - Establishment of Lazada: Lazada is an online sales website of Rocket Internet GmbH, which is a business incubator founded in Berlin, Germany in 2007 by Samwer brothers including Aexander, Mac and Oliver This is a group that specialize in online sales segment and owns big brands of online sales such as: Zalora, Zalando, Jabong, Lamora, Iconic - Awards of Lazada: According to Alexa Information Website’s Company, Lazada in the top 20,000 websites worldwide Just only a year after its launch, Lazada was selected as 2013’s Best Online Shopping Centres at the reputation Golden Globe Awards Annual - Establishment of Lazada VN: Lazada VN is in the 2nd postion in the top of online sales site in VN, it belong to one-member limited liability breaks time company with the B2C model (Business to Customer) & C2C (Customer to Customer) Besides, the Logistic System and the Seller Center system enables providers to participate in the direct sales website It is a member of the retail system Lazada Southeast Asia, along with Malaysia, Indonesia, Philippines and Thailand Lazada.vn offers more than 10,000 products in 12 different industries to meet most of the needs of consumers in Vietnam - Revenue: According to 2013’s E-Commerce Report of the Ministry of Industry and Trade, the website Lazada.vn’s current revenue (71.06 billion VND) accounted for nearly one quarter of total sales revenue of online market - Some basic information of Lazada VN: Website: www.lazada.vn Slogan: "One Click, thousands of utility" Mission: Giving directly to Vietnamese consumers plentiful supplies of goods with best competitive price Vision: To become leading reputable sales websites in Vietnam Awards: Lazada has been Synthesis Online Shopping Center solely voted to be Trustful Vietnamese Brand in 2014 3 Business Process of Lazada VN: Lazada.vn is business-to-consumer (B2C) electronic commerce involves retailing products and services to individuals shoppers Lazada.vn is an online retailer with online shopping website and several offline stores in Hanoi and other cities There are phases in online business model including pre purchase, during purchase and post purchase Pre-purchase • Customers search key words of products they want to buy on Google then choose Lazada.vn or customers are attracted by ads on other website and click to it • Register an account on Lazada.vn and get confirmation email by Lazada • Compare products that customers want to buy including price, quality During purchase • Choose products to buy, click ''Mua Ngay” Then choose information about quantity, color so you will see the total amount of money to pay • Choose payment method • Cash on delivery (COD) payment or online payment including ATM, credit card (Visa, Mastercard) Post Purchase • Confirm deal by SMS or email • Provide free delivery in Hanoi and HCM in 1-3 days, other cities in 2-8 days • Contact Lazada’s warranty center when products has problems II PROBLEM: As a retailer, the customer service after the customers purchase a products also plays an important role to keep their loyalty for the company’s brand name So, what’s the customer care service? Customer care services concepts: Customer care services is always needed, require the company must anything to meet the customer’ needs and expectations to keep their loyalty for the company’s brand name Therefore, building up a professional system for customer care center is one of the most plans that a company need to consider Firstespecially for the e-commerce businesses like Lazada Key importance of good customer services: Customer care to help businesses retain customers and create customer loyalty - Measure advertisement effectiveness and attract potential customers - To help businesses reduce the cost of doing business - Weapons important competition of enterprises in the current business environment - Will motivate the staff meet not only lots of opportunities, but also cope with a wide variety of competitive challenges created by the Internet and the World Wide Web, especially Business to customer (B2C) model in the modern day In Lazada, one of the most challenges when they enter to online selling in the market of Viet Nam is about products warranty services belonging to customer care service after the customers purchase products on their website Based on business value chain approach, the company encountered the vast of difficulties, from make a mistake in listing selling price, poor quality commodities originated from China, late delivery, to products warranty and customer services after purchasing their products These result to so many serious consequences affecting on not only business’ brand but also causing damage hurting in customer’s mind Unfortunately, almost e-commerce firms got entangled in the severe competitions to achieved dominance market position in this market At the beginning of the year 2013, Lazada also received lots of claims, rumours about product warranty policies’s company Those included very slow interaction with clients, working with unprofessional attitude, and so long time – consuming for products guaranteed III CAUSE: Organization factors: There are many reasons were responsible for these problems including organization, management, and technology factors One of the most factors affecting on products warranty existed in organization’s elements BUSINESS PROCESSES: First, products warranty policies in Lazada divided into three different packages services: Manufactures warranty: This warranty service contains sequentially in following processes: This is very common business processes for warranty services occurring in almost of retailers, product distributors, to Lazada, it’s the most feasible, also most convenient way in order to implement Lazada as a sales agent, just gives necessary information about the map and the address of a large number of service centers that the customers can also look up in their website: www.lazada.vn/trung-tam-bao-hanh 2 Even, products are not guaranteed by producers, customers can send their products directly to Lazada’s warranty center: Lazada also offers extended warranty programs beyond the original warranty periods from the manufacturer, guaranteed products will be added in a specified time periods, calculated from the original warranty date expires Extended warranty package is currently Lazada applied to the following product categories: Mobile Phones & Tablets, Computers & Laptops, TV, Video & Audio, Electrical Appliances and Equipment => Although these policies appear to be an understandable sign for the customer, but, in reality, these policies aren’t communicated to the clients, when the products need to be guaranteed, problems will arise ORGANIZATION HIERACHIES & GOALS: Second, retelling about Lazada’s organizational goals, in order to become the leading reputation website of e-taillers in Viet Nam, Lazada has exploited completely from a huge advantage of giant capital resources: 10 billion US dollars, to implement most of them for advertising, together with importing commodities from the manufactures, and selling them with the best goods with the most competive price levels Normally, product warranty policies are ignored According to customer care services’s Lazada, the customer service center is just only ready to serve customers from 7:00 to 21:00 daily BUSINESS CULTURE: Therefore, the problems hidden here is about unprofessional attitude of the assistants and it seems that Lazada don’t have enough people to serve customers Sincerely, Lazada almost allocated most of their human resources for hyperbolize their brand name, especially advertising their products through lots of different channels in order to achieve their organizational goals As well as Lazada’s CEO said that they will prove that Lazada will become the leading e-tailling position regardless of whatever barrier which is said that is very difficult for the company experienced in European and American markets with similar models In addition, their employee’s contracts allow high turnover rate from senior management positions to other lower positions, this overal has big effect on employee’s satisfaction as well as their attitudes devoted for their customers Solution: To organization’s dimension, Lazada should improve their comprehensive and professional training program for the staffs, especially for customer services center They need to continue to upgrading customer’s replies as well as to improving their employees commitment through increasing incentive programme such as bonuses, awards and promotion However, those require big changes for the organizational goals, this is switching to customerdriven goal Obviously, their vision and mission also need to improved for the huge changes in the overal organizational objectives In reality, these depends on lots of things in the current situation, it isn’t easy to implement In future time, we expect that Lazada will fix successful their organzational problems to sooner overcome difficult challenges when entering to Viet Nam market Management factors: There are some reasons from management dimension that make warranty services of Lazada not be appreciated Specifically, there are kinds of product sold on Lazada.vn: sold by and shipped by Lazada, sold by other sellers but shipped by Lazada, sold and shipped by seller In Type 1, Lazada is the seller and they absolutely make products warranty, but with Type 2, 3, Lazada is just a middleman In other words, they provide a place for buyer to meet seller and don’t have any responsibility for product warranty Management information system: However, customers usually misunderstand about this technique They think that when they shop on Lazada, which mean the company has to provide all service before and after selling product Managers of Lazada should have known this issue because e-commerce website is not popular in Vietnam yet, therefore, a lot of customers want to buy but don’t know exactly how it works Allocation resources: Second problem is the way Lazada distributes resources The company has entered Vietnamese market for years and has desire to acquire market share from other competitors as much as possible They make impression with customers by spending money on costly advertising channels like Google Adwords or Facebook Ad However, spending abundant capital on advertising make them lose attention on customer and seller relationship management So the problem here is that Lazada’s managers is underestimating the importance of warranty services, which has a lot of impact on the reputation of the company Solution:management: Defects sometimes are not apparent until you are using the product A warranty is a sign that the company has confidence in its products and that will last longer Management information system: The first thing Lazada can now is explaining the warranty policy clearer to the customers As mentioned above, some products are warranted by Lazada, some products are not, thus, the company can more give explanation for specific type of product They can provide more information on the section “Warranty Policies” or next to the name of specific product on their website This way is simple, don’t take a lot of effort and money, but will be effective Allocation resources: To solve the second problem, Lazada has to change their strategy a little bit Through their intensive advertising strategy, Lazada has acquired over 20% market share only after years However, problems are appearing in customer services management, or warranty services, in particular Therefore, the company now should share the resources of advertisement campaigns with service activities By abundant capital, they can hire more staff and open more warranty centers In the meantime, even in the biggest cities in Vietnam like Hanoi and Ho Chi Minh city, Lazada has only warranty centers, which may be overloaded sometimes Besides, managers of Lazada should create some training programs for their employees because professional staff will make the job done more quickly and precisely On the other hand, to make warranty services better, Lazada should spend money and time for building strong relationship with seller Lazada is the middleman, but, if there are any problem with product sold on their website, to some extent they also have responsibility for that The good relationship between Lazada and seller firstly can increase the quality of the product and reduce cases which customer needs warranty In the situation if some products need to be warranted, based on the relationship with seller or manufacturer, they can easily provide warranty or even further services APPENDIX: Overview of e-commerce in Viet Nam: Vietnam: 2014 Snapshot – source: We Are Social Internet User SEA 2011 – source: Euromonitor Internet User SEA 2016 – source: Euromonitor Popular goos– source: VECITA Overview of LAZADA VN: Mission of Lazada- source: Lazada.com Slogan of Lazada- source: Lazada.com Payment methods- source: Lazada.com Promise of Lazada- source: Lazada.com References: http://www.lazada.vn/huong-dan-bao-hanh/ http://www.lazada.vn/chinh-sach-bao-hanh/ http://genk.vn/blog/5-thach-thuc-lon-lazada-se-phai-doi-mat-tai-thi-truong-viet-nam20130630082550935.chn http://dantri.com.vn/thi-truong/lazadavn-tiep-tuc-dan-dau-ve-thuong-mai-dien-tu-tai-vietnam-852190.htm http://trungnamphuong.com/tham-vong-cua-lazada-tai-thi-truong-viet-nam-bid12.html http://lazadavietnamfishing.blogspot.com/2013/04/khach-to-gioi-mua-sam-lazada-lambat.html ... business-to-consumer (B2C) electronic commerce involves retailing products and services to individuals shoppers Lazada. vn is an online retailer with online shopping website and several offline... warranty service contains sequentially in following processes: This is very common business processes for warranty services occurring in almost of retailers, product distributors, to Lazada, it’s... from make a mistake in listing selling price, poor quality commodities originated from China, late delivery, to products warranty and customer services after purchasing their products These result