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For Shopee, being ‘late’ to the ecommerce game has helped its rise in Southeast Asia

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There is some interesting lessons we can get from how Shopee manages its business. How it manages its late presence in the market, how to penetrate the market, and to get a better position ahead of its competitors, Lazada and Tokopedia, in terms of Monthly Active Users, Total Downloads and Websites with the Most Visits (According to iPrice's 21 2019 e-commerce report).

At least two things that we can take as a good lesson from Shopee. The first thing is Shopee understand well the market, and the second thing is Shopee understand well how to distinguish itself from the competitors.

Understanding well the market lead Shopee to provide customer value-driven service and implement effective approach to reach and get them. Understanding well how to distinguish itself from the competitors lead Shopee to implement an effective differentiation strategy to create a unique and outstanding value for customers.

Let’s see how Shopee provide customer value-driven service and effective approach to reach and get the market and how Shopee differentiate itself with the competitors.

Shopee is localizing and customizing the app to each specific market.Instead of having one common app for all users, Shopee has a stand-alone ecommerce app for each market. This allows the company to introduce market-specific features that appeal to users in each of its seven markets – Singapore, Indonesia, Malaysia, Thailand, Taiwan, Vietnam.

In Indonesia, for example, Shopee launched a dedicated section of Islamic products and services to cater to the majority Muslim market. In countries like Thailand and Vietnam, where celebrity endorsements hold sway over consumers’ buying habits, Shopee features online stores that sell items curated by top celebrities.

Shopee operates a customer-to-customer marketplace, as well as a marketplace for brands to sell directly to consumers called Shopee Mall. By joining this platforms, these sellers typically receive better support for their online businesses, especially in areas like payments and logistics, and enjoy a built-in user base. To differentiate itself, Shopee offers online shopping security through its own escrow service called "Shopee Guarantee", where it withholds payment to sellers until buyers have received their orders.

Shopee also differentiated itself when it firstly went to the market. At the time, most existing ecommerce players were focused on websites as their main platform. Shopee took a different strategy early on by launching as an app first to tap Southeast Asia’s high mobile penetration rate. The platform’s bet on a mobile-first approach has paid off: more than 90% of its transactions are on the app.

From business model perspective, Shopee first started as primarily a consumer-to-consumer (C2C) marketplace but has since moved into both a C2C and business-to-customer (B2C) hybrid model. Shopee partners with over 70 courier service providers across its markets to provide logistical support for its users.

In Singapore, it collaborated with logistics startup, NinjaVan, for item pickup and delivery. Other delivery partners in the region include Pos Malaysia and Pos Indonesia.

Reference:

  1. https://www.techinasia.com/shopee-late-ecommerce
  2. https://en.wikipedia.org/wiki/Shopee

Commentary by Said Haryadi

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