Zalora Supply Chain Case Study

Executive Summary

Zalora is a fashion retail e-commerce shop that started operations in 2012. It’s first major investor, Rocket Internet (Berlin), Kinnevik (Switzerland), Telgamenn Group (Berlin), gave Zalora its first major investment of US$100 million in May of 2013. It was subsequently followed by another US$100 million from the American investment group, Access Industries in December of 2013. Armed with this sizable investment, Zalora sought out to cater to the emerging fashion market in Southeast Asia.

As Zaloras COO, Giulio Xiloyannis, would describe the business “At Zalora, the DNA of a tech company is blended with fashion. We are the fashion platform and the fashion destination in Southeast Asia and with our unique value proposition we differentiate ourselves from other e-commerce platforms in the region.” He would also go on to talk about their supply chain advantage “Along with our localization and logistics advantages, there is also the centralization benefit. Zalora is one localized player, so one team. That is, you have one set-up with us from a supply chain perspective, from a marketing collaboration perspective, and so on. This gets brands, as a resulting end, 6 tailored different market approaches.” Although Zalora has very different markets it must contend with, Zalora has figured out a way to supply merchandise to these markets through one centralized warehouse and has partnered with third party logistics companies to provide last-mile delivery service.

Zalora also strives to create a seamless online-offline omnichannel experience to inform and engage the customer. That's why physical pop-up stores have become such an effective tool for Zalora when it comes to engaging the customer in the real world while not being obligated with the overhead of owning and operating actual stores.

IT has a huge role to play in the operations of Zalora. From inventory control, ERP, SAP, third party plugins, and customer facing software, Zalora has built a well oiled technology company. With its large chashe of data, it can help forecast inventory demand, predict fashion, and help deliver new brands to customers on very short notice. Its an agile company who relies on software for its success.      

Today, Zalora serves markets such as Singapore, Indonesia, Malaysia, the Philippines, Taiwan, Hong Kong, and Brunei. It hopes to expand by creating an ecommerce business with as little overhead and operations as possible. In this report, the streamlined supply chain of Zalora will be explained in further detail. With its business partners, Zalora has become a model for ecommerce businesses, and has become a textbook strategy on how to penetrate the Southeast Asian market with a new brand.

1. General Background