Zalora Philippines deal with Ayala ‘only the beginning’

Pureplay online retailer Zalora believes by partnering with Philippine shopping mall giant Ayala Group, it can transform the customer journey into a more connected experience, boosting sales both online and offline.

Ayala agreed to buy a strategic 49 per cent stake in the Zalora Philippines operation from parent Global Fashion Group earlier this year after both parties began exploring a strategic cooperation more than two years ago. That deal was signed off by regulatory authorities in August

At a formal launch of the partnership last week, Zalora Group CEO Parker Gunderson said by allowing customers to move between physical and digital channels seamlessly, both companies can better learn and adapt to customer needs by using shared data to study consumer behaviour and use that information to improve customer touch-points.

“This partnership creates a unique opportunity to align the country’s leading commercial mall operator, telecom provider (Globe)  and consumer bank (BPI) with the region’s leading online fashion retailer to create a first-of-its-kind retail partnership that focuses on the customer journey,” he said.

“We have very ambitious plans to connect our respective consumer-facing businesses to create some “seamless journeys” for customers in the Philippines and across our markets. The idea is simple – leverage our combined customer-facing business and our digital capabilities to create a far more connected shopping experience for Filipinos.”

Already, the fledgling partnership has resulted in a strong of initiatives aimed at streamlining customer service.

  • Click-and-connect allows online shoppers to redirect their purchases to Ayala Malls shopping centres. A pilot click-and-connect counter in Bonifacio High Street proved such a success, Zalora and Ayala have proceeded with extensions to Glorietta and Trinoma shopping malls to meet holiday demand, with more locations scheduled to open later this month and into next year.
  • ‘Click-and-mortar’ pop-up stores, described as “the forefront of the Store of the Future concept” by the two companies, marry click-and-mortar concept with experiential augmented reality, interactive booths and beacon technology. Each store will feature exclusive collections from top brands, as well as introducing world-class brands not yet available in the Philippines. One such high-profile international fashion brand, still under wraps, will be launched within weeks via pop-up stores.
  • Zalora Philippines will host an Ayala Malls digital Christmas gift guide online for customers who want to shop malls without mixing with the maddening crowds during the holiday season.  

Beyond the mall synergies, Ayala Group controls Globe Telecom and the Bank of the Philippine Islands, giving the partnership access to mobile expertise and a means of pursuing innovative payment solutions in a country where bank account ownership and credit card penetration is immature.

“Operating in a region where hard assets infrastructure is not as developed and distribution of goods is weaker, the smartphone becomes more than a communication tool. It is also a platform to procure goods.”

Zalora Philippines says data from Google’s Consumer Barometer study shows Asia has the highest use of smartphones for online research and in the purchase journey, and Asian countries have the highest rate of internet users who go online exclusively using a smartphone.

Since Zalora launched in the Philippines in 2014, its mobile shopping app has been downloaded 10 million times.

“The investment from Ayala provides Zalora with a powerful strategic partner in the country and funding to speed up growth plans in the region,” said Gunderson.

“The initiatives we will partner with Ayala on are only the beginning of Zalora’s plans in the larger region to broaden our range of offerings on our platform. In the coming months, Zalora will be rolling out several new value-added services for fashion brands looking to expand in the region through digital. This is a very exciting next step for Zalora and we are thrilled to have Ayala on board as a partner for our next exciting evolution in the Philippines and in the region.”

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