Lazada online grocery sales in Singapore rose due to coronavirus

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Lazada online grocery sales in Singapore rose due to coronavirus. The e-commerce giant saw its sales jumped four times from early April.

Since the city-state imposed movement restrictions to curb the spread of the coronavirus, the Alibaba-owned company experienced a rise in the sales of its online supermarket delivery business called RedMart.

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Lazada, which acquired RedMart in November 2016, currently caters to around 65 million active consumers on its platforms across six different markets in Southeast Asia.

James Chang, chief executive officer of Lazada Singapore, reported that RedMart’s unique visitors on daily have jumped more than 11 times.

The company experienced a “pretty tough time” trying to provide customers quality service during the peak period, Chang said during an interview with CNBC’s “Squawk Box” on Tuesday.

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To meet the increase in demand, Lazada hired full-time staff and part-timers.

″(RedMart’s) sales have increased about four times in this space and we hired about 500 staff here in Singapore over the course of a few weeks to be able to increase our capacity substantially,” Chang said.

New delivery system

Moreover, Lazada launched a new delivery system on April 4. This new system added 50% capacity and allowed the company to take on more orders as more consumers started utilizing e-commerce.

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Chang said their peak was when the coronaviru started spreading outside China in February. RedMart’s orders increased and surpassed its weekly average by 300% when people in Singapore hurried to buy items in bulk.

Lazada made “a huge investment” in information technology and logistics infrastructure, he noted.

West Fulfilment Centre

In Singapore, the company will operate a warehouse called the “West Fulfilment Centre.” The center that would place automated areas that can help meet customer needs. It may open in July or August, depending on how the country would be able to manage the coronavirus outbreak.

The company did not disclose any dollar-figure in terms of its investments in Singapore but said that it is “ongoing.”

Singapore’s economy

While online stores like Lazada are thriving, some businesses have been hit badly by the coronavirus outbreak.

The Ministry of Trade and Industry reported that the Singapore economy may fall by between 4.0% and 7.0% this 2020.

According to the ministry, since revealing its last economic prediction in March, “the disruptions to economic activity in major economies around the world have been more severe than expected.”

The ministry pointed out that coronavirus lockdown measures that aim to curb the coronavirus disease damaged major economies in countries such as the US, Europe, and China. The ministry also said the damage will linger even after countries gradually reopen economies since more waves of infections could take place.

This means that outward-oriented industries in Singapore such as wholesale trade, manufacturing, and transportation and storage would face difficulties. Moreover, consumer-facing companies in retail and food industry suffered from restrictions, the ministry noted.

“Notwithstanding the downgrade, there continues to be a significant degree of uncertainty over the length and severity of the COVID-19 outbreak, as well as the trajectory of the economic recovery, in both the global and Singapore economies,” it said.