Zalora Offers Bigger, Better Retail Choices with SAP on AWS

If you’ve shopped online in Southeast Asia, you’re likely familiar with Zalora. With more than 50 million visits per month, it is the region’s largest online fashion retailer, carrying brands such as Nike and Mango as well as its own in-house brands. Zalora is focused on continuously improving the customer experience with a strong technology backbone. These elements have become a key differentiator for the site as it expands its offering and geographic footprint. Zalora currently operates in eight markets in Southeast Asia and has experienced annual double-digit growth since launching its site in 2012.

In 2017, Zalora decided to implement SAP S/4HANA to increase automation and improve data flows. “SAP gives us one source of truth for all our master and transaction data,” says Raymond Leong, director of Enterprise Technology at Zalora Group. All orders now flow automatically into SAP, integrated with Zalora’s internal operation systems and external logistics partners. Inventory movements are synced to SAP, and then products are mass-created and updated in the system. The order process is synchronized from the front end through to execution and delivery, with a strong level of harmonization that includes partner entities. This ultimately supports the sustainable growth of the business.

The company was already running its ecommerce applications on Amazon Web Services (AWS) and chose to launch its SAP system on AWS because of the platform’s reliability and flexibility to start small and pay as you grow. Other providers would have required a multi-year contract with fixed payment terms, but AWS bills on an hourly basis by usage.

Within six months, Zalora had successfully implemented several SAP S/4HANA applications, including SAP PO, SAP Fiori, SAP Web Dispatcher, and SAP Solution Manager. For ease of setup, the IT team used the SAP HANA on AWS Quick Start, which includes an Amazon Virtual Private Cloud (Amazon VPC) preconfigured with public and private subnets to control inbound and outbound traffic. “With Quick Start, we had our first SAP HANA instance up and running in less than 45 minutes,” Leong says. “This is an amazing way to implement SAP HANA–based applications on AWS.”

The flexibility to scale on demand with AWS has also helped Zalora control costs. “Changing the instance size was as easy as starting and stopping. We shut down our non-production instances when we do not need them, and this helps us to save significantly,” Leong says. Zalora started with the smallest possible SAP HANA–certified instance size—244 GB—and was able to right-size Amazon Elastic Compute Cloud (Amazon EC2) instances to meet growing business demands. Within two years, Zalora had expanded its cloud consumption by nearly 900 percent to 2 TB instances on AWS.

With SAP on AWS, Zalora has better visibility into cash flow for improved accuracy, and its books are updated daily. “In the past, we spent weeks reconciling payments manually, but with SAP, payments are integrated to the bank portals, with no errors caused by manual data entry,” Leong says. Finance can close its books in just five days at month’s end, down from three weeks before SAP. Furthermore, backend processes are easier to manage with integration and automation on the AWS Cloud.

Zalora has also automated operational tasks including backups and system refreshes using serverless computing features such as AWS Lambda and AWS Step Functions. As a result, the company has reduced its SAP system refresh time from five to two days and has improved refresh quality. Zalora also benefits from AWS Backup, a fully managed, centralized backup service. In addition, it has implemented a disaster recovery strategy for SAP with its assigned technical account manager, a resource offered through the AWS Enterprise Support plan.

SAP is a core business application storing Zalora’s critical business data, so security was a leading concern during system configuration. The IT team uses several AWS services to ensure compliance with internal security standards and external regulations in the markets in which it operates.

The first priority is encryption for data at rest and in transit. “We use AWS Secrets Manager to rotate, manage, and retrieve our keys for file-level encryption, which eliminates the need to hard-code sensitive information in plain text,” Leong explains. His team also uses Amazon GuardDuty for intelligent threat protection. Internal security policies mandate the IT team track changes made to infrastructure, which they easily achieve using AWS CloudTrail. “We believe the capabilities that AWS provides to secure our SAP applications are beyond what we could have deployed in an on-premises or private cloud setup,” Leong says.

Having a dedicated AWS technical account manager has proven invaluable as a trusted advisor and single point of contact when issues arise or when Zalora is evaluating new services. Leong says, “Overall, we’ve had a wonderful experience with AWS. The AWS team has been with us at every stage of deployment and supported us on every step of the journey.”

In 2019, AWS started using the AWS Well-Architected Framework to offer suggestions on ways to optimize Zalora’s infrastructure. The company is now saving substantially on its monthly bill and has improved its SAP backups as well as Availability Zone failure recovery times, by implementing Amazon Elastic File System (Amazon EFS) to ensure a recovery SLA of 6 hours. “The well-architected review is an excellent value addition by AWS to help us avoid overlooking issues that could arise in the future,” Leong adds.

Through the integration of customers, internal teams, and external partners, SAP technology is powering real-time customer insights that allow Zalora’s management team to make more informed decisions. The team continues to implement new SAP modules such as Qualtrics to improve employee engagement and SAP Concur for simplified travel and expense reporting.

This digital transformation has led to improved workflows such as vendor onboarding. Zalora continues to look at ways to better manage the millions of SKUs in its inventory, with the help of AWS and a modern ERP solution on SAP.

To learn more, visit SAP on AWS.