Zalora Philippines: An interview with Co-Founder and CEO, Paulo Campos

Date of publishing: 28/09/2016 14:00

 

“At Zalora, your purpose is not just to collect your paycheck at the end of every month. Maybe that’s what your parents wanted you to do because that’s what they did,” begins Paulo Campos, CEO and co-founder of Zalora Philippines. “As for me, I’ve always blazed my own trail. Here, we have a sort of trinity wherein happy employees plus happy customers equals happy company. It’s the sense of community that makes our employees like working here. This is what makes us successful.”

 

 

Since launching back in 2012, Zalora has become synonymous with affordable online fashion throughout Asia. Garnering support and over US$100 million in investments during its early rounds of funding, the startup swiftly expanded into Malaysia, Thailand, Vietnam, Hong Kong, Brunei, and the Philippines.

 

Backed by Berlin-based Rocket Internet Group, Zalora consistently reports meteoric growth, experiencing more than double sales revenues between 2012 and 2013 and 100%-200% year-on-year growth since. This garnered major support and investments from JP Morgan and private equity firms. Zalora’s aggressive marketing has enabled them to become the top online fashion destination in Southeast Asia.

 

Before establishing the Philippine franchise of online fashion retail giant Zalora, Paulo worked as a consultant at The Boston Consulting Group (BCG), Singapore. Four years later, he’s transitioned from being an analyst to becoming a co-founder, market leader, and industry pioneer.


 

 

He recalls those moments in the beginning when he’d have to roll up his sleeves and hustle nonstop to launch the business. He would juggle priorities from setting up operations, meeting clients, solving day-to-day problems, down to writing web content and doing key analyses. He would stretch out in all directions to push for progressive change in what was just a burgeoning market back then. “At the end of the day, we’re not manufacturing anything. We’re creating a service that simply didn’t exist before, so it really comes down to the people to embrace this new concept.”


 

 

Nowadays, it’s no longer his job to make the company successful because everyone else shares in that responsibility. Paulo sees his current role as a motivational force for his team, aligning them toward a unified direction and sharing in the company’s vision together. With Zalora’s steady rise over the years, it isn’t difficult to see how its employees continue to achieve such a fervent passion for the kind of innovative work they do.

 

“People join a startup because they want to belong to something they believe in,” he explains. “We’re a community of people, so it’s very important to have that sense of community amongst each other. And it’s my job to keep the community strong.”

 

 

How would you characterize Zalora’s growth in the Philippines so far?

 

Astronomical! Considering back in 2011, when people were asking me how sure I was about wanting to start a B2C e-commerce company in the Philippines, there were only 2 outcomes to that decision. It was either going to be perfect timing or 5 years too soon. Luckily, it was perfect timing!

 

All the exogenous factors came into play sometime in between 2012 to 2013, and that resulted in the continued acceleration we see today. Internet penetration is now at 47%—we have 47 million Filipinos with access to the internet. The rate at which people are doing mobile data now is mind-boggling. We are the #1 country in the world in terms of time—the most number of hours in a day—spent on social media. And generally time spent on the internet. One could say that us Filipinos are the most intense internet users in the world. So all of those factors lined up over the last 5 years in our favor.

 

Has growth been consistent?

 

Yes, it’s been accelerating. That's why it’s been really exciting for us.

 

We had to build our own fleet. One of the big lessons you see in Zalora is that we in-source everything. We also do all of our own marketing, which means that we have no agency to deal with for anything. From sales to customer service, marketers, even the riders, we in-source all of them!

 

We had to make the strategic decision to have our own fleet to be able to offer COD (cash on delivery). We had to expand that network into 12 key cities nationwide… What's changed, in that sense, is that we were able to reach out and penetrate the rest of the Philippine market.

 

How has the Philippine market changed for Zalora; and where do you see the company heading?

 

In 2012, 60% of our orders were within Metro Manila, and 40% were from outside the capital. Now, it’s shifted to 35% within Metro Manila and 65% outside. There is an even bigger demand in the market outside of Metro Manila and it’s been growing exponentially faster than that of the capital. Our next biggest market is Cebu. It’s a long-tail distribution… And that’s the power of the internet. Just when you think you wouldn’t get orders from there, you get orders from there.

 

What are your predictions for the ecommerce industry?

 

I think we’re going to see very strong growth. There was a Google study released covering the online digital economy in Southeast Asia. They say the worth of the Philippine economy is currently at USD$500M, and it is expected to grow to $9.7B by 2025.

 

The reason there was no e-commerce before was that the whole ecosystem was not yet complete and efficient. Logistics and credit card payments were an issue so there was still behavioral changes and innovations that needed to happen. But that’s the nice thing about businesses like these. It’s that somehow, these changes will inevitably happen and that companies like us will have to continue to adapt to these new changes and trends.


 


 

Zalora recently relocated its office from Makati to The Fort, Bonifacio Global City. How has this change in workspace impacted your company?

 

It’s incredibly important to have an awesome office because everyone should enjoy their work and their surroundings! Our old office was a great 4-storey brick building on Jupiter Street. What I didn't like about the space was that we were physically divided across 2 floors, and within each floor, each team had their own room. You could literally go through months without seeing any of your coworkers. It was very constricted in terms of interaction.

 

The main issue was that people weren't interacting enough across departments. We were becoming very siloed in our approach to business, which is something we couldn't afford to happen.

 

 

With our new space, we’ve decided to open up the whole office. My first principle was to knock down every wall that we could, other than the meeting rooms of course. Some departments needed their own rooms, but everyone else got one big open area.

 

Another thing was the light. We wanted the lightness and airiness of the office to foster this collaboration and “team spirit” kind of environment, specifically for the common areas. When you think about it, you spend the most number of hours in a day at the office, so you necessarily have to love where you work and make it a source of added value. This will create a perception that going to work will be less of a hassle and more of a benefit.

 

In terms of the bottom line results, you can see it in the hard metrics: employee retention is up, attrition is down, and morale is at an all-time high. Steadily and noticeably so. When done properly, you can measure the impact office design has on productivity.

 

What defines Zalora’s office culture?

 

First, I would say it’s a sense of ownership. Everyone should feel that they own a piece of the company and so there won’t be a sense of agency. That entrepreneurial spirit is something we’ve been able to preserve.

 

Another thing that heavily defines our office culture is a Filipino term, written on our wall over there—you can’t easily translate, but it says “malasakit,” or a sense of deep, deep care. Going a little bit beyond yourself for the good of the community and the good of everyone. That’s an inherently Filipino trait that makes us who we are. It’s the opposite of being a routine worker, who’s there just to collect the paycheck. For us, we care about each other and we care about the wellbeing of our community.

 

If you combine the two—ownership of what the employees do in their day to day jobs, plus an emotional connection, a deep sense of care for the company—then you’ll have a pretty exciting platform to build your business.

 

 



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