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Lazada Calls for Online Retailers to Work Together, Not Build Walls

In a move that may astonish observers of the very competitive online retail market in the Asia-Pacific, Alibaba-owned Lazada called for closer cooperation between retailers rather than what the company described as “walled gardens”. The company also released survey results showing strong interest in online retail among Southeast Asian customers. Four out of five Vietnamese consumers said that it was a part of their everyday lives. The call comes as the online retailer turned 10 years old in March 2022.

laptop user black and white
Credit: Sergey Zolkin/Unsplash

Lazada briefed Nikkei Asia about this call for “tech interoperability” and other developments in Vietnam, where the company conceded that it was now second place in that market to Singapore-based Shopee. In a statement prepared by the company, they argued that “industry players should work together to drive sustainable progress by creating an open network in this digital economy” while acknowledging that these players should compete to provide better services and features. While the statement from Lazada did not give any specifics about how this would work, it is consistent with past statements from company executives.

For example, in a widely reported speech on 22 March 2022, Lazada Group CEO Chun Li criticised the creation of “walled garden super apps” by various regional players. These apps aim to keep a user dependent on only one provider for everything from e-commerce to ride-hailing. Examples of these include Grab Holdings Ltd and GoTo’s super apps. Also, the practice is particularly strong in China, where companies such as Tencent entice users to stay on their platform, protecting their valuable store of user data. Li’s call for a more open online ecosystem was based on his experience with the Chinese and U.S. markets.

In the same briefing, Lazada announced the results of a commissioned study by Milieu Insight to mark its 10th anniversary. The study showed that across the Southeast Asian regional market, 73% of those surveyed said that online shopping was now integral to their everyday life. Other interesting findings from this survey include the following:

  • Singaporean shoppers showed the highest preference levels for doorstep delivery.

  • Roughly half of those surveyed preferred to pay for their purchases with cash on delivery (COD).

  • Two out of three online shoppers asked said that large retail campaigns such as Lazada and Shopee’s signature 11.11 sales help shape their buying behaviours.

chat apps on phone
Tencent's chat app WeChat was the subject of a recent Chinese tech crackdown. (Credit: Adem AY/Unsplash)

In recent years, regulators and governments across the world have been working to take down such virtual walled gardens. In Lazada’s home country of China, President Xi Jinping has launched a campaign against the massive accumulation of user data by private entities as part of a wider crackdown against China’s tech sector and has ordered companies to open their platforms, including Tencent’s popular WeChat app. American tech giants have not been spared either. Around the same time as the Lazada executive spoke in Singapore, the European Union finally passed the European Digital Markets Act, which is meant to crack down on antitrust and anti-competitive practices by companies such as Google, Apple, Meta and Amazon.

  • In a briefing in Vietnam, Lazada repeated recent criticism of what it called “walled gardens” in the e-commerce sector, calling for cooperation among online retailers to develop common platforms while acknowledging the reality of competition.

  • The online retailer also released the results of a study that showed that seven out of 10 Southeast Asian consumers surveyed have made online shopping part of their everyday experience.

  • Lazada’s statement comes in the wake of recent moves by governments around the world to regulate tech company behaviours, especially around interoperability and platform access issues.

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