Zalora aims for profits in ’19

Conglomerate Ayala Corp. sees e-shopping mall Zalora Philippines, where the group has a 49 percent stake, turning profitable by 2019 and offering a burgeoning logistics capability beyond its online retailing platform.

“There is a trend beginning to take place. We have a country with many young people and the usage of internet and mobile internet in our country is among the highest in the world. Yet our use of e-commerce space is very, very low,” Ayala Corp. chair and CEO Jaime Augusto Zobel de Ayala said in a press briefing after the conglomerate’s stockholders meeting on Friday.

But Zobel sees e-commerce gaining ground in the Philippines, adding that the Ayala group’s investment in Zalora and Mynt, a digital payment solutions provider which operates GCash and Fuse Lending, was one way of facing head on an inevitable trend.

In an archipelagic country of 7,641 islands, Zobel said moving goods from one point to another would be a key component of growing the economy.

Based on how Zalora was operating at present, this platform could be profitable by 2019, Ayala chief finance officer Teodoro Limcaoco said. He also elaborated on how Zalora could be more than just an e-commerce pioneer.

“Underneath that, what we’ve found is that this Zalora Philippines organization delivers 80 percent of their own goods to the last mile, which means that they make 3,800 deliveries of two packages each or around 6,000 deliveries a day. And it’s a two-way delivery because most of our product payments are [paid via] COD (cash on delivery),” Limcaoco said.

“It’s a very efficient organization that they have built from scratch. Today it serves Zalora only, but obviously, there are potential businesses that you can get into. We’re not sure where it leads to but … it’s a very interesting idea to look into,” he added.

Ayala Corp. acquired 43.3 percent of BF Jade E-Service Philippines, the company that owns and operates Zalora Philippines. Separately, Ayala Land Inc., BPI Capital Corp. (a unit of Bank of the Philippine Islands) and Kickstart Ventures Inc. (a unit of Globe Telecom) also acquired minority ownership stakes in BF Jade. All in all, the group owns a total of 49 percent.