1This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

Introduction to Fulfillment by Lazada (FBL)Q4/2016

2This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

Introduction to Fulfillment by Lazada (FBL)

What is FBL

Why FBL will help you

How to join FBL

3This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

What is fulfillment by Lazada?

YOU SELL IT, WE SHIP IT

Fulfillment By Lazada (FBL) is a hassle free fulfillment solution

provided by Lazada to our local sellers

4This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

How does FBL work?

You send

products to the

Lazada

fulfillment

center

Lazada

stores your

products

Lazada takes

care of the

pick & pack

Lazada delivers

products to

customer

Customer

purchase

your products

Return

management

handled by

Lazada

End-to-end fulfillment solution

Lazada will be responsible for your order fulfillment

We store, pick, pack & deliver all orders for you

Full flexibility to only use FBL

for parts of your assortment

5This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

Introduction to Fulfillment by Lazada (FBL)

What is FBL

Why FBL will help you

How to join FBL

6This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

With FBL you will sell more while reducing your cost and

complexity of operations

Grow sales

Improve marketing

Save cost

Simplify operations

4

3

2

1 • Conversion rate is higher for products on FBL

• Benefit from combined shipping with other FBL and Lazada products

• Customer satisfaction is higher with FBL and leads to repeat purchases

• Improve shipping economics with “Buy More Save More” and Postal

• No fixed cost for rent and labour

• Only variable cost of RM1.99 (before GST) per item delivered

• SKUs are eligible for Express and Postal delivery and all related

promotions

• Better boosting increases visibility on the Lazada website

• Unlimited Order Volume Limit (OVL) for FBL SKUs

• No penalties (for cancellations, fake RTS or wrong/incomplete items)

• Faster payment

7This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

Customers are more likely to buy FBL items because they

value shorter lead time and higher reliability

1

FBL delivery is up to 1.5 days faster Conversion rate increases across categories

7.3%

6.1%

5.3%

2.6%3.2%

3.8%3.2%

2.0%

Home & Living Baby &Toddler

Computer &Laptops

Sports &Outdoors

3 months conversion rate

FBL Dropshipment

2x

3.2

2.7

3.22.8

3.1

2.3

4.3 4.3 4.3

3.63.9

3.4

Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16

End-to-End delivery lead time (days)

FBL Dropshipment

Customers see the faster

lead time promise on the

product page

1.5

8This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

On-site marketing exposure will be higher for your FBL

products

2

Boost your search ranking and participate in exclusive

campaigns, e.g. for Express Delivery!

9This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

FBL SKUs join our “Buy More Save More” shipping fee

program across all FBL and Lazada products

3

• For purchases below RM100 customers will

bear part of the shipping fees

• For purchases below RM100 the merchant will

only bear a maximum of RM2.00 to West and

RM5.00 to East Malaysia

• Above RM100 full shipping fees will be borne

by the merchant

• Customers are offered a cheap Postal shipping

option for small items

• Customers can pick from all products in the

warehouse, i.e. FBL and own Lazada products

Customers are encouraged to buy more

10This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

FBL SKUs is entitled for COD – Cash on Delivery 3

What is COD?

• COD stands for Cash On Delivery. With this

payment method, customer can pay in cash

to the delivery agent upon receipt of their

order.

How will COD benefit the merchants?

• Competitive Advantage & Increase Sales:

Offering the service as a differentiator with

respect to competition.

• Increase wider market: Reaching a wider

base of customers such as students,

housewives etc., who typically do not have

credit/debit card/online banking.

• Win trust and gain loyalty: Customer often

has higher level of trust for seller on COD

payment option and will to buy from them

over those that don't

11This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

FBL SKU is entitled for Express Shipping

Shipping option Delivery Time Fee Eligible areas

1-day / Express

Shipping

Peninsular Malaysia selected areas only

- Order before 1 p.m. delivery is same day

by 9 p.m. All orders after 1 p.m. will be

delivered on next working day before 9

p.m.

- Only valid from Monday to Saturday

excluding Public Holiday

Kuching selected areas

- Order before 12 noon delivery is same

day by 6 p.m. All orders after 12 noon will

be delivered on next working day before 6

p.m

- Only valid from Monday to Friday

excluding Public Holiday

Minimum shipping fee is

RM7.00 per item &

subject to parcel weight.

Only available

for certain

areas in Klang

Valley &

Kuching

Next Day / Express

Shipping

Available for selected areas in Johor and

Penang

- Orders placed before 6 p.m. are

processed for next day delivery. Other

later than that will be processed the day

after

- Only valid from Monday to Saturday

excluding Public Holiday

Minimum shipping fee is

RM7.00 per item &

subject to parcel weight.

Only available

for certain

areas in Johor

& Penang

Express Delivery Logo

12This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

FBL only charges you an all inclusive fee per item and

eliminates all your fixed operations cost

3

Direct delivery from your supplier to the Lazada fulfillment center

can reduce cost even further

FBL charge

RM1.99

ex gst

per item

Includes manpower for pick & pack

Includes cost for packaging materials

Includes storage cost (rent, utilities, insurance)

13This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

FBL shipping and fulfillment rate card Subang warehouse (item weight and value)

14This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

FBL simplifies all of your operation processes to make your

life easier

4

Full flexibility to put only parts of your assortment on FBL

No penalties for cancellations, fake RTS or wrong product sent

Easier returns management as re-sellable items go directly back into stock

Unlimited Order Volume Limit (OVL) for FBL SKUs

Faster payments

15This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

FBL success stories range across local merchants and large

international brands

Local electronics merchant Small local merchant International sports retailer

FBL solved high cancellations

issue and boosted sales

FBL helped to grow sales with

limited operations resources

FBL managed the transition

from offline into e-commerce

70250

1,000

Week 1 Week 6 Week 12

Orders per week

• FBL as stepping stone into e-

commerce in Malaysia

• Growth to 4-digit orders per week

within 3 months

• Perfect operations performance

with 0% cancellations

• Small local merchant with limited

storage space and fulfilment

capacity; 200 orders per week

• Top 30-50 SKUs are on FBL

• Higher FBL commitment increased

seller rating

• Electronics seller had long lead

time and high cancellations

• Customer did not trust low seller

rating, despite high quality products

• Ramped up sales from 30 to 250

orders per week with FBL

10%

0%

Cancellation rate

Dropshipment FBL

40%60%

FBL share of total orders

Seller

rating

16This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

Introduction to Fulfillment by Lazada (FBL)

What is FBL

Why FBL will help you

How to join FBL

17This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

How to move to FBL?

• If you wish to join FBL, let us know and we firstly check if your contract

already covers FBL services; If not, a brief addendum needs to be signed

• Lazada will contact you and suggest you a first order of items to be sent

to the fulfilment center; If you agree with the items and the quantities, you

just need to approve the order on Seller Center

• Lazada will contact you on a regular basis and coordinate future

replenishment orders to make sure that your products are never out of

stock

• The management of FBL is quite easy for you! Seller Center provides full

control to issue replenishment orders, check stock levels, retrieve stock

back and manage your products

• Orders, shipments and returns will be fully managed by Lazada

Joining FBL is easy!

18This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

What changes?

Your life just got easier

Dropshipment

You

You

You

You

You

Upload products

Manage prices

Update stock

Process orders

Ensure 3PL pick-up

You

You

Focus on selling your products and let Lazada do the rest

19This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.

I have a question!

If I sell products through FBL, can I still sell other products through

drop-shipping?

Yes! You can sell your products through different fulfilment models

simultaneously

Are my FBL products covered by insurance?Yes! All FBL products are fully covered by Lazada’s insurance

(against loss, damage, fire, etc.)

How long does the inbound take?Generally, 24 hours, but if the documents are incorrect or the

packaging is faulty, it can take longer

Can I get my products back from Lazada’s fulfilment center? How

long does it take?

Yes, through Seller Center In 7 business day you are free to

collect the product from our fulfilment center

I need to match the product serial number with the Customer

order. Is it possible with FBL?

Yes! Lazada’s WH team can track this information and share it

with you

Can I monitor my stocks and my returns? Yes! You can monitor your stocks and returns directly on SC

Is FBL expensive?No! Actually, with FBL you avoid additional personnel, packaging

and WH costs for the fulfilment of your orders

Does FBL mean that I need more stock? No! With FBL, Lazada helps you to optimize your stocks and avoid

unnecessary inventory costs

Do I need to update the stock on SC? No! Stocks will be automatically updated by Lazada

Do I receive the Customer Returns? The returns policy remains untouched by FBL. However, if an item

is in good condition it will be stored back in the fulfilment center

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