Shopee / Lazada Shops - The Cons Of Relying On Marketplace Sales

With the rise of marketplaces came the rise of marketplace sellers. There it is, a lower barrier to entry and an easy way to sell stuff to buyers across the country.

No doubt, a lot of sellers have benefitted completely by focusing their sales efforts on Shopee and Lazada. However, from my personal experience with my clients, I can see that this might have been a mistake.

The clients who continue to do well even during hard times are those who did not rely solely on Shopee or Lazada. They made efforts on social media and relied a lot on sales from their own website.

Companies that only had presence in marketplaces are currently suffering the most.

No Branding

Obviously, branding in marketplaces are minimum. People pick-up the product listing, not the brands that are selling them. It is only when you know the brand would you search for them.

• Don't know brand = Generic searches like "Sports shoes"
• Know a brand = More direct searches like "Adidas"

So how can a new brand become a keyword that is searched when even on Shopee, your ability to brand is limited?

Titles are all that you really see and now these are usually adjusted based on what is trending (SEO Optimisation).

The most you can really do is put your logo on the photos and videos.

And while you could always rely on making an amazing looking shop page with the decorations - but really - who visits these pages? I may do so 10% of the time!

Item Listing

So many sellers will go to the same places to buy products that are trending based on demand in Shopee. Generally - Alibaba, Ali Express, etc. What happens - everyone ends up selling the same / way too similar products.

Your feed for searches will filled with the same looking products. After a while, it's actually quite tiring to go through all the listings since it's all the same.

I blame drop shipping.

Price Comparison & Competition

So when you're tired of looking for products, a lot of your decisions will be based on the price. So, to win, you have to offer the cheapest product. Why? Because Shopee and Lazada are not avenues to increase that customer delight one would receive from great branding exercises.

Increasing the value of your product is down by increasing the value of your brand and what it stands for.

So how do you get the cheapest price? Buy larger bulk or take less profit. So the winner would be the one who makes a larger investment in product, or is willing to cut their margin to make less per item and rely on volume sales.

This is becoming difficult with the rise of competition from manufacturers who are selling directly on Shopee. They can offer the cheapest prices!

Marketing

So marketing strategies are focused on sales promotions. Flash sales, 1.1, 2.2 sales, pay day sales, etc. More focus is on keyword searches and product images. A big portion of your marketing will rely on good reviews and ratings.

And at the end, yes you might get that initial purchase, but will your customer return for another purchase?

It's true, depending on what I'm purchasing, I might go back to buy the same product, or if I liked their item so much, I'll search their store for more items, but it is very rare.

Most of the times, I will purchase that one product, and forget about where I bought it from.

Kevin O'Leary said it best

You don't have a brand, you have a product.

And Shopee and Lazada is about that. You can sell 1 product very well, but to sell more will be very hard

.If Shopee was a physical centre, it would be supermarket - a lot of undifferentiated products stacked on large and tall shelves, with a few brands who have paid for better spaces and little banners here and there.

Conclusion

It's not a bad thing to rely only on supermarkets. A lot of brands do well with this! I'm just saying that if you join the Shopee Supermarket and rely only on this, just know the limitations.