Lazada restructuring in Thailand: the company optimizes costs and changes the management team

03.02.2024
Lazada restructuring in Thailand: the company optimizes costs and changes the management team

Lazada, one of Asia's leading e-commerce companies, is carrying out a major reorganization of its Thailand division to improve efficiency and reduce costs. According to local media reports, the company plans to lay off or reassign 30-50% of its Bangkok office staff, which now employs more than 1,100 people.

Lazada Thailand is expected to change its chief executive. Instead of current CEO Veerapong Gu, who is leaving on his own volition, the company will be headed by experienced top manager Varitha Kiatpiniochai. She has worked at Lazada for almost 8 years and is familiar with the business.

Experts note that cost optimization and profitability improvement have become a priority for Lazada amid increased competition. Its main rivals, Shopee and market newcomer TikTok Shop, are aggressively gaining share in Thailand's e-commerce market. To counter them, Lazada is forced to change its strategy.

"While previously the company was focused on expansion and fighting for customers, now cost optimization is coming to the forefront. This is also required by the parent structure of Alibaba Group, which considers Lazada as an independent business project," the analyst notes.

According to research company Momentum Works, Shopee's share of Thailand's e-commerce market reached 56% last year, Lazada's share reached 40%, and newcomer TikTok Shop's share was already 4%. This is forcing the "old-timers" of the market to change their approaches.

The restructuring is expected to help Lazada Thailand improve the profitability of its business after a period of aggressive growth. The company will be able to save money on marketing and hiring while maintaining a competitive position due to its strong brand and loyal audience. However, maintaining leadership in the fast-growing e-commerce market will not be easy.

Author of the article: Ekaterina Antonova