Shopee, Lazada vs Shopify: Sell My Products on Marketplaces or Shopify?

For businesses aiming to capitalise on Southeast Asia’s burgeoning e-commerce landscape, set to double by 2030, shopping platforms like Shopee, Lazada Amazon, Tokopedia, Zalora, Carousell and Tiki present unparalleled opportunities. With a combined user base spanning millions across key markets like Singapore, Malaysia, the Philippines, Thailand, and Taiwan, these marketplaces' shopping apps are popular with ecommerce merchants in Southeast Asia. Targeting customers in different countries is crucial for expanding business reach and leveraging the full potential of these platforms. However, navigating the complexities of these platforms requires a thorough understanding of their advantages and disadvantages. Making an informed decision when selecting an e-commerce platform is essential for long-term success and adaptability in the dynamic Singapore market.

Introduction to E-Commerce

E-commerce, short for electronic commerce, refers to the buying and selling goods and services over the internet. It has become a crucial part of the global economy, with millions of businesses and individuals selling products online daily. E-commerce has led to the development of various e-commerce platforms, each with unique features and benefits. These platforms have revolutionised businesses' operations, providing them with the tools to reach a global audience and streamline their operations. In this section, we will explore the world of e-commerce and the different platforms available for businesses to sell products online.

Overview of E-Commerce Platforms

E-commerce platforms are software applications enabling businesses to create and manage online stores. These platforms provide a range of features, including inventory management, payment processing, and marketing tools, to help companies sell products online. Some popular e-commerce platforms include Shopify, Shopee, and Lazada. Each platform has its strengths and weaknesses, and companies must carefully evaluate their options to choose the right e-commerce platform for their needs. For instance, Shopify is known for its user-friendly interface and advanced features, making it a popular choice for businesses looking to create a unique online store. On the other hand, Shopee is renowned for its flash sales and local payment methods, making it an attractive option for businesses targeting the Southeast Asian market.

Setting Business Goals

Before choosing an e-commerce platform, businesses must set clear goals and objectives. This involves defining what they want to achieve through their online store and identifying their target audience. Setting business goals helps in aligning the choice of platform with the overall business strategy, ensuring that the platform supports the business’s growth and operational needs.

Defining Objectives

Defining objectives is crucial for businesses to determine the right e-commerce platform for their needs. For example, suppose a company wants to sell products online to Southeast Asian customers. In that case, it may choose Shopee due to its regional popularity. On the other hand, if a business wants to create a unique online store with advanced features, it may choose Shopify. Companies must also consider their budget, technical skills, and marketing strategies when defining their objectives. Understanding these factors will help businesses choose the right e-commerce platform that aligns with their goals and supports their growth.

Pros of selling on marketplaces

Unmatched market penetration & targeted audience access

• Digital shopping hubs: Shopping apps like Shopee, Lazada, Zalora function as vibrant online malls, drawing millions of daily active users who are actively searching for products. This provides sellers with immediate exposure to a ready-to-purchase audience.
• Regional dominance & granular targeting: Super apps like Shopee, Grab, capitalise on their established leadership, particularly within Southeast Asia's mobile-first e-commerce culture. Using platform-provided tools, they target specific demographics and geographic regions within Singapore, Malaysia, the Philippines, Thailand, and Taiwan.
• Seasonal campaigns & mega sales: Shopping platforms leverage platform-driven mega sales events (e.g., 11.11, 12.12) to experience significant sales spikes, attracting a surge of bargain-hunting consumers.

Building trust & enhancing credibility

• Established brand equity: Shopee and Lazada have invested heavily in building consumer trust through secure payment gateways, buyer protection policies, and reliable customer service.
• Seller ratings & reviews: Zalora and Carousell utilise the platform's rating and review system to build a positive reputation, fostering customer confidence and encouraging repeat purchases.
• Official stores and LazMall/Shopee Mall: Establishing official stores within LazMall or Shopee Mall grants established brands increased visibility and credibility, catering to consumers seeking authentic products.

Streamlined ecommerce operations & user-friendly interface

• Simplified onboarding: Benefit from a user-friendly seller centre, simplifying the process of creating product listings, managing inventory, and processing orders. Robust logistics are crucial for ensuring these operations run smoothly and efficiently.
• Mobile-first optimization: Leverage the platforms’ mobile-optimized interfaces, catering to Southeast Asian consumers’ predominantly mobile shopping habits. Logistics support plays a vital role in enhancing customer satisfaction and operational efficiency.
• Integrated chat functions: Utilise platform chat functions to answer customer questions and solve problems quickly.

Comprehensive logistics & fulfillment solutions

• Diverse shipping options: Offer flexible shipping options, including standard delivery, express shipping, and cash-on-delivery, catering to diverse customer preferences and supporting local sellers with efficient logistics solutions.
• Shopee/Lazada logistics: Utilise the platforms’ integrated logistics services for streamlined shipping and tracking, reducing logistical complexities. Choosing the right eCommerce platform is crucial for effective logistics and fulfilment, ensuring smooth operations and customer satisfaction.
• Fulfilment by Shopee/Lazada: Leverage the platforms’ fulfilment centres for storage, packing, and shipping, allowing you to focus on sales and marketing.

Data-driven marketing & promotional tools

• Sponsored ads & keyword targeting: Utilise platform-provided advertising tools to boost product visibility in search results and category pages, targeting specific keywords and demographics.
• Voucher & discount promotions: Implement targeted voucher and discount campaigns to incentivize purchases and drive sales.
• Live streaming & in-app engagement: Engage with customers through live streaming, flash sales, and in-app games, fostering interaction and brand awareness.
• Shopee/Lazada analytics: Use the platform's analytics tools to monitor sales, traffic, and customer behaviour, allowing for data-driven optimization of your marketing efforts.

Cons of selling on marketplaces

Hyper-competition & margin pressures

• Price wars & product differentiation: Ecommerce brands face intense competition, particularly in popular product categories, requiring strategic pricing and unique product offerings.
• Platform fees & commission structures: To ensure profitability, understand the complex fee structures, including commission fees, transaction fees, and advertising costs.
• Promotional costs: Budget for promotional spending to stay competitive, as visibility is often tied to paid advertising.

Brand identity limitations & customer relationship challenges

• Marketplace branding dominance: Operate within the platform's branding ecosystem, limiting your ability to establish a distinct brand identity.
• Restricted customer data access: You may face limitations in accessing customer data, hindering your ability to build direct relationships and implement personalised marketing strategies.
• Dependence on platform policies: Be prepared for frequent policy changes and algorithm updates, which can significantly impact your visibility and sales.

Algorithm dependency & visibility volatility

• Search algorithm fluctuations: Understand that product visibility relies heavily on the platform's search algorithm, which can change frequently.
• Paid advertising reliance: Recognize that achieving consistent visibility often requires significant investment in paid advertising.

Customer service constraints

• Limited Direct Contact: While platform chat exists, some complex customer service issues can be more challenging than on a personal website.
• Platform Customer Service Influence: Accept that the platform's customer service policies will influence customer interactions.

Shopify for Southeast Asian e-commerce: Build your brand for long-term success

Shopify is a leading e-commerce platform that provides businesses with the tools to create and manage their own online stores. It offers a comprehensive solution for businesses of all sizes, from startups to large enterprises. In Southeast Asia's dynamic e-commerce landscape, Shopify is an increasingly popular choice for companies seeking to establish a strong online presence and build a lasting brand identity.

Pros of selling on Shopify

Full control over your brand

• Design with Freedom: Shopify offers a wide array of customizable themes and design tools, allowing you to create a unique online store that reflects your brand's personality and resonates with Southeast Asian aesthetics.
• Craft Compelling Content: Tailor your product descriptions, website copy, and marketing materials to engage your target audience and drive conversions. Utilise Shopify's blogging platform to share valuable content and build brand authority.
• Curate the Customer Experience: Control every aspect of the customer journey, from product discovery to checkout. Implement personalised recommendations, loyalty programs, and exceptional customer service to foster lasting relationships.

Cost-effective solution

• Transparent Pricing: Shopify's pricing plans are straightforward and predictable, starting with a basic plan at $39 per month. Choose a plan that aligns with your budget and business needs, scaling up as you grow.
• Competitive Transaction Fees: Enjoy lower payment processing fees compared to many marketplaces. Utilise Shopify Payments or integrate with a variety of local payment gateways popular in Southeast Asia.
• No Commission Fees: Unlike marketplaces that take a percentage of each sale, Shopify allows you to keep more revenue, boosting your profit margins.

Ownership of customer data

• Gather Valuable Insights: Collect customer data, including email addresses, purchase history, and browsing behaviour, to gain a deeper understanding of your audience.
• Fuel Personalised Marketing: Segment your customer base and create targeted email and advertising campaigns based on their preferences and purchase patterns.
• Cultivate Customer Loyalty: Leverage data to personalise product recommendations, offer exclusive deals and implement loyalty programs that encourage repeat purchases.
• Make Data-Driven Decisions: Analyze customer insights to optimize your product offerings, marketing strategies, and overall store performance.

Scalability and flexibility for growth

• Support for All Stages: Shopify is designed to accommodate businesses of all sizes, from startups taking their first steps in e-commerce to large enterprises expanding their reach. Scale your store effortlessly as your business grows in Southeast Asia.
• Seamless Integrations: Connect with a vast ecosystem of apps and services to enhance your store's functionality. Integrate with popular payment gateways, shipping providers, and marketing tools specific to the Southeast Asian market.
• Adapt and Evolve: With Shopify's flexible platform, you can easily adjust your store's features and functionality as your business needs change. Add new products, expand into new markets, and optimize your operations.

Marketing freedom and control

• Diverse Marketing Channels: Drive traffic to your Shopify store through a variety of channels, including:
  • Search Engine Optimization (SEO): Optimize your store's content, structure, and technical elements to rank higher in search engine results for relevant keywords in your target markets.
  • Targeted Advertising: Run Google Ads and social media advertising campaigns to reach specific customer segments in Southeast Asia. Utilise detailed targeting options to maximize your ad spend.
  • Content Marketing: Create valuable and engaging content, such as blog posts, articles, and videos, to attract and retain customers and establish your brand as a thought leader in your industry.
  • Influencer Marketing: Collaborate with local influencers to reach a wider audience and build brand awareness and trust in Southeast Asia.

App ecosystem and customization

• Enhance Your Store's Functionality: Access thousands of apps in the Shopify App Store to add features and improve your store's performance. Find solutions for everything from inventory management to customer support.
• Key Integrations with Apps:
  • Inventory Management: Automate stock control, manage suppliers, and prevent overselling.
  • Customer Loyalty Programs: Reward repeat customers with points, discounts, and exclusive benefits.
  • Email Marketing: Build your email list and automate email campaigns to nurture leads and drive sales.
  • Social Proof: Display customer reviews, testimonials, and social media feeds to build trust and credibility.
• Tailor-Made Solutions: Customize your store with apps that cater to the specific needs of your business and target audience in Southeast Asia. Integrate with local services and solutions to optimize your operations.

Cons of selling on Shopify

Requires marketing & traffic generation

• Proactive Marketing Essential: Unlike marketplaces with built-in traffic, you'll need to actively drive visitors to your Shopify store through various marketing channels.
• SEO Expertise Required: Invest time and effort in learning and implementing SEO best practices to improve your store's visibility in search results.
• Content Creation is Key: Develop engaging and informative content to attract and retain customers. This requires consistent effort and a content strategy aligned with your target audience's interests.

Technical setup & maintenance

• Store Design & Setup: While Shopify is user-friendly, setting up your store requires technical know-how or the willingness to learn. You may need to invest in professional design services or dedicate time to mastering Shopify's design tools.
• High-Quality Product Images: Professional product photography is crucial for showcasing your products effectively and enticing customers. Invest in quality visuals or learn basic product photography techniques.
• Website Updates & Maintenance: Regularly update your store's themes, plugins, and security to ensure optimal performance and protect against vulnerabilities. Stay informed about Shopify's updates and best practices.

Slower sales growth initially

• Building an Audience Takes Time: Attracting organic traffic and building a loyal customer base on Shopify requires consistent effort and patience. It may take time to see significant sales growth.
• Brand Awareness Requires Effort: Establishing your brand in the competitive Southeast Asian market requires ongoing marketing and brand-building activities. Be prepared to invest time and resources in creating a strong brand presence.

Streamlined E-commerce Operations & User-Friendly Interface

A good e-commerce platform should provide streamlined operations and a user-friendly interface. This means the platform should be easy to navigate for both the business owner and the customer. The platform should also provide inventory management, payment processing, and order fulfilment features to help businesses manage their online store efficiently. Additionally, the platform should offer marketing tools, such as email marketing and social media integration, to help businesses drive traffic to their online store. By choosing the right e-commerce platform, businesses can focus on growing their sales and expanding their customer base, rather than worrying about the technical aspects of their online store. For instance, Shopify offers a range of third-party apps and integrations with other sales channels, making it an ideal choice for businesses that want to expand their reach. In contrast, Shopee is a popular choice for individual sellers and small businesses that want to tap into the local market in Southeast Asia. Ultimately, the choice of e-commerce platform depends on the business’s goals, target audience, and operational efficiency.

The hybrid approach: Best of both worlds?

Many successful e-commerce businesses in Southeast Asia adopt a hybrid approach, leveraging both Shopify and popular marketplaces like Shopee and Lazada. This strategy allows them to:

• Maximize reach: Tap into the massive audience of marketplaces while building a strong, independent brand on their Shopify store.
• Diversify sales channels: Reduce reliance on a single platform and mitigate risks associated with marketplace policy changes or algorithm updates.
• Test new products: Use marketplaces to gauge market demand for new products before investing in inventory for your Shopify store.
• Drive traffic: Utilise marketplace listings to introduce customers to your brand and direct them to your Shopify store for exclusive offers and a more personalised experience.

By combining the strengths of both platforms, businesses can achieve greater visibility, accelerate sales growth, and cultivate stronger customer relationships.