The Lazada Group Southeast Asias largest e-Commerce Company

101 on category management

Strictly confidential

Agenda

1. Introduction
2. People
3. Frameworks
4. Data
5. Processes

Congratulations! You have an awesome job! This

is what you need to do

Welcome to the category management role! You are embarking on

the most dynamic, challenging and (hopefully) fun job you will ever h
ave!
Your key duties are to meet target revenue and margins by:
Making the customer happy! Customer comes first
Setting the strategy for the category to meet targets
Managing the KAMs/buyers to ensure amazing deals, quality
assortment, sufficient inventory and competitive prices
Coordinating with merchandisers/marketing to ensure the
products KAMs/Buyers have gotten are pushed
Building relationships with key brands, merchants and suppliers
to grow revenue
Reporting performance and activities to management
3

Agenda

1. Introduction
2. People
3. Frameworks
4. Data
5. Processes

The regional team

CEO
CEO (Max)
Max

Chief Commercial
Commercial
Chief
Officer
Officer(Tim)
Tim

Chief
Finance/Marketing
Officer Stein

Chief Product
Officer Sohil

Chief Technology
Officer Eugene

This is your
team

Chief Information
Officer Klemen

The EL regional team

EL partnerships
Ming
Zyad & Arsianne

Head of EL category

EL1 Regional
Category Manager
Christabel

EL1 Merchandizer
Johann

EL1 Analyst
Louis
ID EL1 Category
Manager
Karthik/ Mikha
MY EL1 Category
Consultant
Amir
PH EL1 Category
Manager
Janet/Jan
TH EL1 Category
Manager
Pulkit
VN EL1 Category
Manager
Dong
SG EL1 Category
Manager
Carey

EL2 Regional
Category Manager
Justine

EL2 Merchandizer
Pia

EL2 Analyst
Febbry
ID EL2 Category
Manager
Fanya
MY EL2 Category
Consultant
TBD
PH EL2 Category
Manager
Michael
TH EL2 Category
Manager
Marie Sophie
VN EL2 Category
Manager
Steven/Harris
SG EL2 Category
Manager
Jaz
6

Your immediate team

Country CEO

Head of EL
category

CCO

EL category
director

MT category
manager

CL category
manager

Buyers / KAMs..

Buyers / KAMs..

Buyers / KAMs..

Buyers / KAMs..

Regional category
manager EL1/2

EL partnerships

EL Merchandizer

You will also need to work with other teams on

the ground!
>>
Get an introduction
to these local teams
Team
Responsibil
Sourcing

Ops

Partner
support
Content

Marketin
g

Marketing

Finance

Finance

Informat
ion

Business
Intelligence

Commer
cial

Vendor
acquisition/
manageme
nt

ities
Buying goods to ensure ATP (availability to purchase) is
stable
Answering questions/ concerns from merchants

Ensuring content on product page is good, multisourcing

Getting potential customers to view our products

Paying you, merchants and suppliers

Giving you the data you need to run your category

VA - gets and onboards new merchants, gets advice on

which merchant to source from category
VM manages smaller merchants
8

Agenda

1. Introduction
2. People
3. Frameworks
4. Data
5. Processes

Category management framework

>> Electronic categories are very much driven by
pricing and deals!
Deals

Assortment:
Do you have the
right products?

Price:
At the right
price?

Inventory:
In the right
quantities?

Merchandising:
And do people
know about it?

Brands: partnerships with key brands take us to the next level!

Merchants/suppliers: do you have the right merchants and suppliers ? Are
your relationships with them awesome?
Team: is your EL team the best it can be?
10

Framework for keeping you sane: Short tail vs

long tail
>>you
have 1,000s ofAchieving
SKUs, heres
Topic
targets how to manage th
em all!
Ensuring lighthouse skus are available on the site
Assortme
nt

Short tail
Long tail
Short tail

Ensuring a quality assortment across a wide variety of subcats by having the

right merchants through working with VA

Negotiating on price through KAMs/buyers on top 200-500 skus

Ensuring competitive merchants

Negotiating on inventory through KAMs/buyers on top 200-500 skus

Ensuring merchants with good ATP

Merchandising IS short tail

Ensuring deal quality top 50-100 skus

Ensuring merchants upload storewide deals on their assortment

Suppliers should only supply short tail

Merchants which sell large portion of revenues managed by KAMs
Small merchants are dealt with Vendor Management

Price
Long tail
Short tail
Inventory
Long tail
Merchandising

Short tail
Short tail

Deals
Long tail
Merchants
/
Suppliers

Short tail
Long tail

11

Framework for increasing revenues

Short term

Medium
term

Campaigns and deals

Cutting prices - directly cutting prices on buying or telling
sellers to lower prices on MP
Vouchers and extra discounts
Push marketing e.g. Facebook and Line
Increasing assortment
Renegotiating margins and/or payment terms
Pull marketing channels e.g. SEM, SEO

Brand partnerships!
Long term

12

Framework for choosing deals

>> What kind of products should I push? 1/3

CR, PI and revenue are the main
variables

to select SKUs to push

A. Best sellers

View

1. Rank by revenues descending

(recommended to use NMV MTD or M-1)
2. Look at CR to make your choices

Easy fix?

Best
sellers

Kill it

Potential
best
sellers
Revenues

B. Potential best sellers

1. Filter for PI above a certain limit
(recommended to use PI last 7 days and
use a limit around 100/week)
2. Rank by PI ascending
3. Select SKUs making good revenues
already revenues among the lowest PI
ones

C. Easy fix?
1. Rank by PI descending
(recommended to use PI last 7 days)
2. Filter for boosting score below 90
3. Identify SKU making very little revenues
(validate that unit sold are low to avoid
accs)

13

Framework for choosing deals

>> What kind of products should I push? 2/3

Definitions
Falling stars
10%

High PI (after renego or content revamp)

20%

High CR low PI
20%

Best sellers
>> Top revenues generators

Potential best sellers

>> SKU selling well but not getting
Best sellers
enough traffic to make more
40%
revenues
>> Careful with niche products!
Easy fix?
>> Products getting a lot of PI but
not selling well in the current state
>> Need to check pricing and
content first
>> Careful with flagship
Rising or falling starts
>> Products selling a lot better than
Rising stars
before
10%
>> Best sellers not selling as good
as before
In the scorecard calculate the delta
between the RR of MTD NVM and
NMV M-1 to identify them
14

Framework for choosing deals

>> What kind of products should I push? 3/3

Check pricing and content

Push to increase PI

Falling stars

Rising stars

Rev going down

Rev going up

Easy fix

Potential best sellers

High PI but low rev

Low PI but good revenues

Bets
No high PI or high Rev, but should be
bestseller

Best sellers

15

Framework for vendor meetings

>> The 4 points below should always been discussed during

meeting
Inform vendors about their performances at Lazada
Current
>> Ranking at Lazada (per merchants, per brand, others)
>> Rev (+ trend), unit sold (+trend), assortment size (per subcat
performance
+ trend), their cancellation rate (% of orders cancelled by them)
s
>> Best sellers (top 10)
1. Discuss SKUs where we need more stock
>> No more than 10 products (cf. ATP and coverage)
2 Improving
2. Make pricing suggestion to vendors on specific items
their
>> No more 10 products with suggested price (cf.
competitiveness)
performance
3. Advise them on best performing terms and conditions
s
>> Example: If you would deliver in 1 day instead of 4, you
could x2 orders
Define with vendor the next steps in terms of assortment
3
development
Assortment
>> Subcategories, products, brands, price points, etc.
>> Blend priority categories with 2nd tier categories
development
>> Dont stop until we have full assortment
Inform
vendors
upcoming
campaigns
and ask for
>> Ask how
they about
will do that,
and maybe
offer support
deals and promotions
>> Give them insight of what is working
4
Campaigns
>> Ask for specific product that they have, and also what THEY
want to push
&
>> As much as possible avoid committing on pushing specific
Deals
products
>> To negotiate a partnership, request a dedicated meeting with
Note: If you want to address an
Opsmarketing
issues, better organize a separated meeting with 16
their

Ops from vendor

Framework for campaign preparation 1/3

>> Managing process is key to get good quality and enough

deals
1

Define targets products

>> Subcategories, price points, specs, brands, colors, etc

Identify with the team the best merchants to get deals

>> At least 5 merchants per vendor managements

>> Send standard email to tier 2 and 3 merchants with target products and prices

3
a

Collect input in a
Google Doc

>> Should only be the very

good deals
>> Push team to fill the
required fields

4>> Start with HOT DEAL

3
Monitor team activity
b >>
Use a funnel approach to
create a small competition (cf.
slide 2/3)
>> redefine action plan if
needed

3
c

Assess deal pipeline

with formulas
>> Should be very
transparent (cf. slide 3/3)
>> Communicate situation
with team and management

Select the best deals

>> Challenge team on Not a deal and No data, there are usually some good
products
>> Complete with Bet deals and best sellers

17

Framework for campaign preparation 2/3

>> Funnel vision will help you create emulation in you team
and get deals
1

2
Targeting
vendors to
contact

Contacting
vendors to
schedule
meetings

Meeting
vendors to
introduce
campaign and
negotiate deals

4
Collecting list
of feedbacks
form vendors

18

Framework for campaign preparation 3/3

>> Simple and clear assessment helps communication

1

Short tail

Long tail

>> Ensuring quality products, price and stock for short tail
>> Ensure total short tail deal value is approx. 50-80% of target

>> Ensuring good no.s of deals

>> Ensure average discount is good

19

Marketing and Merchandising

>> Letting the world know of the awesome deals we

have at Lazada
Main Marketing Channels

Conversion x traffic = revenue

Better deals bring in more traffic focus on getting hot killer deals on key
selling SKUs
Greater traffic Greater clicks More Orders More Revenue
More interaction with the regional marketing team = better optimization of
marketing spend
Source : Google Analytics (Lazada Thailand)
20
Bi-weekly update on performance with every LCM + Weekly touch
point with

Agenda

1. Introduction
2. People
3. Frameworks
4. Data
5. Processes

21

Lazada is run with 4 interfaces; the data which

you use is typically from BOB or OMS

ALICE
Alice is the front end of the site. The
pretty face (developers are sexist)

BOB
Bob is the back end of the site . The
brains

Lazad
a
OMS
Ordering management system which
reflects warehouse data

Seller center
The software sellers use to control
their online shops

22

Data will provide an in-depth view of your

category

>>
Reports currently available to steer your category
Local price, inventory and
PI
Daily email + excel
EL daily sales trend
Daily email + excel
Weekly KPI
1x per week email + excel
Weekly performance and
charts
1x per week email + excel
SKU level analysis
Ad hoc analysis
Outright report
Weekly by email

Assortment analysis
Bi weekly email + excel
Lazada Vs GFK
Quarterly analysis against
market

Daily revenues vs targets

Top 10 SKUs sold

Daily revenues vs targets

Top 10 SKUs sold
Revenues
Margin
Share of MP
Contribution to country
ATP week vs last last week NMV
Last
Bad
Last stock
week top 20 SKUs by NMV
Last week top 20 SKUs by biggest decline
Last week top 10 Brands by NMV
Last
week and
top 10
merchants by NMV
Revenues
evolution
Units sold
Margins
Bad stock
Outright stock by SKU
Summary of stock by color coding (Green, Yellow, Red, Black 1, Black
2
Assortment
Summary ofsize
coverage days
# of vendors per sub cat
Regional top sellers (top 20 per cat)
Local top sellers (top 20 per cat)
Local top merchants (top 10 per country)
Brand analysis
Price point analysis
Market share by subcategory
Brand share
23

Local price, inventory and PI

>> Daily report to manage price, inventory and deals for short tail

Purpose of the report

Check price of short tail
Check inventory of short tail
Monitor page impressions/ views and decide which deals to push

24

EL Daily Sales Trend

>> Daily dashboard to monitor overall performance

Purpose of the report

Follow key metrics

Revenues
Margin
Share from cross-border
Total venture visits vs EL revenue over the last 7 days

Top 10 SKUs daily

Daily changes in revenue

25

Weekly KPI

>> Your high level dashboard to monitor performances at a glance

Purpose of the report

Follow key metrics

Revenues
Margin
Share of MP
Bad stock value

Read Retail and MP performances independently

Deep dive at sub cat level to understand root causes

26

EL Weekly Charts & Performance

>> Last week performance and top/worst performers

Purpose of the report

Follow key weekly metrics and charts
Revenues
Week on week growth
Top 20 SKUs, Top 20 declining SKUs, Top 10 brands & Top 10 merchants

Understand and replicate other country weekly best sellers

Deep dive into worst performing SKUs to understand root causes

27

EL SKU analysis

>> Deep dive into SKUs level to understand root cause

Purpose of the report

Identify SKUs that are causing:
- Decline in revenue
- Decline in margin
Deep dive into these SKUs to understand possible root causes

28

Outright inventory report

>> Information on inventory age and coverage

Purpose of the report

Identify the value of your inventory that are ageing and having too high level of coverage

Definition of the
different color
codes:

29

Assortment and vendors analysis

>> More high level information about assortment and best sellers

Purpose of the report

Identify gaps in assortment by comparing with other countries
Check the needs for more vendors
Understand and replicate other country best sellers
30

EL Daily Sales Trend

>> Quarterly report to compare performance against market and

other ventures

Purpose of the report

Compare subcat and brand split between market and Lazada
Show evolution of subcat split, market share and brand share
Identify areas of potential where certain brands or sub cats may be under served

31

What you always need to know

>> Should be always to be woke up at night and give the

answer

Top 10
Supplier
s

Top 10
mercha
nts

Share of
LH
present
20
Bestseller
s items

Campaig
ns to
come

# of LH
competit
ive

Top
priorities

Revenues
and growth

Contribut
ion to
country
ATP

Margin

Share of
MP

32

Bad
stock

Agenda

1. Introduction
2. People
3. Frameworks
4. Data
5. Processes

33

Suggested weekly routine

Monday

Tuesday

Wednesday

Thursday

Friday

Daily Kick-of

Daily Kick-of

Daily Kick-of

Daily Kick-of

Daily Kick-of

10AM-11AM

Boosting and
banners check

Boosting and
banners check

Boosting and
banners check

Boosting and
banners check

Boosting and
banners check

11AM-12AM

Price/ATP check

Price/ATP check

Price/ATP check

Price/ATP check

Price/ATP check

9AM-10AM

12AM-1PM

Seller meetings
Ad hoc communication
Follow-ups

1PM-2PM
2PM-3PM

Revenues
Check

3PM-4PM

Revenues
Check
Marketing
gdocs

4PM-5PM

Revenues
Check

Marketing
gdocs
Revenues
Check

Revenues
Check

Marketing
gdocs

Seller meetings
Ad hoc communication
Follow-ups

PREPARE FOR
THE WEEKEND!

5PM-6PM
6PM-7PM

Daily Check-out

Daily Check-out

Daily Check-out

Daily Check-out

34

Daily Check-out

Monthly agenda

>> Excluding local specificities

Monthly priorities review
>> Between the 25th and 30th of each
month

Fr

Fr

id
ay

ay
Fr
id

Fr
id

Beginning
of the
month

ay

Last month priorities review

Definition of next month
priorities
Last month targets review
Next month targets definition
id
ay

Monthly and daily forecasts

>> First week of each month

Forecast sales for next month

on target categories
Forecast daily NMV
Support monthly negotiations
by leveraging our volumes
Validated with country CCO

Weekly call
>> Every Friday with RCM

Situation on priorities
Situation on performance
Key highlights of past week
Key focus of next week

35

End of
the
month

Monthly forecasts

>> Defined daily and for whole month

Revenue targets are set monthly and daily

Revenue progress is tracked daily
36

Monthly priorities definition

>> Defined together with the RCM priorities are the key focus of the
month

Monthly priorities are set between LCM and RCM and agreed with CCO
Monthly priorities are shared with top management and discussed during commercial calls
Typical topics to be set as priorities
Assortment development needed
Specific deals needs (campaign preparations or events)
Partnerships
Process implementation
Recruitments topics
Stock commitments
Bad stock clearance

37

Multisource allows product which are the same

to be grouped together

Multisource is important! It helps customers

find products
Products currently which are exactly the same
are multisourced
We do not multisourced refurbished with non
refurbished, if there are differences in whats in
the box, warranty etc

38

Content uploads multisource relations and it is

the LCMs job to ensure multisource quality is g
ood

Multisource relations are uploaded for lighthouse SKUs chosen by RCM in

agreement with LCM
Content uploads multisource relations in a gdoc
This gdoc is audited every 2 weeks prior to assortment call

39

LCMs update new product launches to ensure

we have an up to date shop

This should be updated regularly

We regularly plan campaigns around new product launches

40

Partnerships are a key source of revenue and

are driven locally and regionally keep Ming in t
he loop of all partnerships!

41

Appendix

42

Lazada Vocabulary and Acronyms

RCM Regional Category Manager

LCM Local Category Manager
VM Vendor management
VA Vendor acquisition
MP Marketplace
BI (Business Intelligence) Team within Lazada in charge of analytics and data management
BOB System managing the front end (i.e. the website)
OWMS (Operations and Warehouse Management system) System managing the back end (i.e. the stock, the warehouse and
operations)
SC (Seller Center) System managing the interface between merchants and Lazada
Salesforce System to manage vendors, used by all vendor managers
Webtrekk System gathering data about traffic and sources (i.e. marketing channels performances)
DSS Daily Sales summary
LH (Lighthouse SKUs) Particular items supposed to be potential best sellers (defined by: local GfK, regional best sellers list, and local
best sellers list)
ATP (Availability to Purchase) % of SKUs purchase on the website among total visible SKUs
PI (Page impression) Number of views on the page
CR (Conversion Rate) Number of items sold/ Number of PI
Commissions Commissions charged to MP merchants
NMV Net Merchandise value
GM1 = RRP - COGS
GM2 = GM1 - discount
GM3 = GM2 - vouchers
PC1 = GM3 + Basket fee + COD fee + installment fees
PC1.5 = PC1 - delivery costs
PC1.75 = PC1.5 - pick up costs
PC2 = PC1.75 - PC2 salaries - Payment costs - Warehouse rent - Other PC2 costs
PC3 = PC2 - Mkt costs
PC4 = PC3 - overhead costs
43

Lazada Vocabulary and Acronyms

Marketing metrics

Impressions: how often our ad is shown

Clicks: how often someone clicks on your ad
Costs: the total amount we paid for our ads
Cost Per Click (CPC): the average cost we paid for each click on our search ad(s)
Click-Through-Rate (CTR): the percentage of ad impressions that resulted in a click
Conversion Rate (CR): The percentage of visits that resulted in an e-commerce transaction
Orders: the total number of completed purchases on LAZADA site
New Customers (NC): the total number of completed purchases by new customers
Cost Per Order (CPO): the average cost we paid to generate an order
Customer Acquisition Cost (CAC): the average cost we paid to acquire a new customer

44

Net earnings and drivers

Net Earnings defined here as the revenues minus the cost of good sold, excluding overhead costs

Conversion rate drivers

ATP
Competiveness (not only price competitiveness, but also service quality and trust factors)
Discount displayed
Content quality and customers reviews
Etc.
Views Drivers
Visibility on the website
Marketing Push
Content quality (SEO)
Basket size drivers
Recommendation relevancy
Bundles relevancy
Assortment size
45

Approximate commissions (pls get latest from your

country)

46