Lazada, the ecommerce website owned by Alibaba (BABA), is teaming up with ride hailing app Uber and streaming video service Netflix (NFLX) to create an online rewards program for users in Singapore that could be expanded into other countries and markets.
Earlier Thursday Lazada announced the new program called “LiveUp” which rewards users who pay $20 a year with discounts on Netflix streaming, Uber rides and free delivery of purchases on Lazada and Taobao, the other online marketplace owned by Alibaba. Last year Alibaba purchased a majority stake in Lazada for $1 billion.
Lazada plans on launching a mobile app to support the new program in the second half of this year. In an interview with Bloomberg, Lazada Chief Executive Maximilian Bittner said it’s the first time Uber and Netflix have come together to create an online rewards program. “Singapore is the market on the cutting edge of validating what we think consumers might want, so we will focus on Singapore first,” said Bittner, noting he expects “LiveUp” to add more partners in the future. (See more: Special Delivery: Alibaba Wants Faster Traffic to Europe)
The move on the part of Lazada to launch a loyalty program comes as Alibaba is betting there will be big growth in online commerce in Singapore. Citing data from Euromonitor, Bloomberg reported Singapore’s internet retail market accounted for 2.4% of total retail sales in 2013 with that jumping to 4.8% last year. It also comes at a time when Amazon (AMZN) is setting its sights on Southeast Asia as its next bastion of growth. Lazada has been coming up with ways to counter the impending entrance of Amazon and the loyalty program is the latest in that effort. For Alibaba, Southeast Asia represents a way for the ecommerce giant in China to diversify beyond its core market which is becoming saturated. (See more: Alibaba Diversification Earns Analysts' Approval.)
But it’s not only Alibaba and Lazada that stand to benefit from the new rewards program. It also enables Netflix to get a foothold in a region where many balk at paying for content and gives Uber an advantage over Grab, its ride hailing competition in Southeast Asia, which recently launched a loyalty program for riders in the region, reported TechCrunch.