We’re dropping some knowledge before you drop the $$$.
Lazada SG and affiliates of the Lazada Group have been quick to be dubbed as the Amazon of South East Asia. You know you’ve made it big when you become a seller on the platform. Why? Because you’ll be amongst the biggest competitor brands. The 2018 valuations of ASEAN marketplaces showed that the e-commerce giant dominated 43% of online shopping visitors in South East Asia. The Alibaba Group bought over the Singapore-based e-commerce platform in 2016 after investing USD $1 million. A year later, Alibaba invested a further USD $1 million. Lazada online shopping is anyone’s paradise but are sellers mirroring the sentiment? Lazada is currently dominating the e-commerce industry in six major ASEAN countries (Singapore, Malaysia, Indonesia, Vietnam, Indonesia, Philippines). But it has a long way to go before it can play with the grand-daddies of e-commerce (think: Amazon).
How to Become a Lazada Seller
If you’re a brand looking into becoming a seller on Lazada online, be mindful of the affordances on the platform. Lazada garners close to 184 million eyeballs across the region per month and it can be a profitable decision to sell on it. But Lazada also falls short when it comes to providing an attractive and fully comprehensive platform for sellers.
With that said, is Lazada Online right for you? It’s easy to get lost in the benefits of the platform, so we’ll dive straight into some of the limitations of having your brand on Lazada.
Sell on Lazada: Lazada Seller Center
There are only two ways to be approved on how to sell in Lazada (including any of the Lazada subdomains across the ASEAN). For any international player wanting to test out the South East Asian waters, the process gets convoluted. You must either have a physical offline presence in the country you intend to sell it or have your products stored at any one of their distribution hubs. These hubs are located in South Korea, China or Hong Kong. Essentially, if you’re a Lazada cross border seller looking to ship your product outside the aforementioned countries, you may have to think again.
Understandably, it makes the distribution process for Lazada more efficient. However, as a seller, you will inevitably incur costs. If you house your products with Lazada Seller Center Singapore, be prepared to pay USD $3 per cubic meter per day on top of a handling fee anywhere between $0.69 to $2.99 per item.
LazMall SG for Sellers
Lazada also has a premium feature available for brands with locally sourced products and with a country-specific presence called LazMall. So, if you’ve got an offline brand presence in the country, you can opt to sell on LazMall Singapore. Brands selling on LazMall will experience a higher search ranking, exclusive promotional campaigns and greater visibility. This puts brands just with an online presence at a disadvantage from the get-go. So, if you’re an international brand, you will inevitably have competition.
On a front-end perspective, sellers will also have to compete with China’s Taobao, the largest e-commerce store online. The platform offers a separate section to promote Lazada SG Taobao products that compete heavily on its pricing. This will create a greater level of competitiveness across brands selling on Lazada trying to measure up to TaoBao’s economies of scale.
Source: Lazada SG (top) vs LazMall Singapore (bottom)
Lazada Store Builder
Store-front uniformity is important in e-commerce market places. But having the creative freedom to be unique is just as vital. Unfortunately, when you sign up to be a seller on Lazada, you are limited to the templates offered on the platform’s store builder. There are five templates available for a Lazada seller:
- Daily template: A landing page with details about your brand and products
- Simple template: Similar to a daily template with the addition of a customisable banner at the top
- New Arrival template: A banner replacing the one on a Simple Template to promote new arrivals
- Best Seller template: Same as the New Arrival template with the banner showcasing the best sellers of your brand
- Marketing template: A banner at the top to promote recommendations alongside a customisable banner
Source: Lazada University
The lack of differentiation makes it difficult for your brand to stand out. This is true especially amongst sellers who have similar or identical products. Lazada also does not offer theme differentiation but just provide sellers with the store-front templates. It also severely restricts the possibility of adding curated content.
Content placed on store-front pages alongside product pages can improve your SEO ranking with the inclusion of strategic keywords. Without the ability to customise it as you see fit, you may struggle to promote an aesthetic look. Certain customisation options are available to sellers but they are limited to the developers approved by Lazada.
The Lazada builder also limits the type of multimedia content you can add to your store-front. Whilst e-commerce giants such as Amazon allow brands to create an aesthetic storefront with video content, Lazada brands are limited to either static or sliding banners.
Lazada Data & Analytics
The analytics provided on Lazada aren’t as detailed as if you were to plug in a Google Analytics pixel into your own independent online store. Your dashboard will provide you with general analytics consisting of your revenue, order numbers, page views, conversion rate, number of items sold and such. The analytics will help you segregate your data according to best sellers, top brands and top categories and the movement of product within those areas. However, viewing analytics such abandoned cart and browse rates, visitor fall off and such are not available on the platform. You can’t view user fall off and other granular information that could help you in testing out better formats to sell.
Ads on Lazada & Promotional Content
Advertising on Lazada isn’t as versatile or flexible. Lazada offers product advertising only on its mobile and desktop sites. This effectively removes any advertising and promotional capabilities on its mobile app. The inability to place ads on the app places sellers at a disadvantage because the Lazada mobile app is progressively becoming the most used platform to access Lazada. In fact, the growth has been monumental such that the Lazada was the fastest growing app in four out of the six Lazada present countries. The official Lazada website totals app downloads to over 200 million across all regions. Additionally, the app offers better product deals, lowest prices and first-to-know of product promotions. With such progressive growth, sellers are unable to capitalise on the platform.
Additionally, ad placements on the desktop site are not optimised for viewership. The ads placed on product pages are on the bottom right of the screen. Furthermore, they not visible unless a user scrolls further down on the page. The ads are not optimised for specific searches, either. In fact, the recommended product placements sometimes vary in categories (see below). This strategy lies in stark contrast to the advanced marketing strategies offered on platforms such as Amazon. For instance, the western online giant offers headline search ads to increase views and user click-throughs.
Source: Lazada Singapore
Should you Sell on Lazada SG?
Although Lazada Singapore offers a direct-to-consumer channel, it isn’t fully optimised for brands. Lazada has a long way to go before providing a fully dynamic and integrated site for sellers. The ASEAN region is quick to become one of the most e-commerce centric hubs. Users in the region are predominantly opting to shop online and brands need to jump on the opportunity. Lazada has certainly captured the market with traction than Amazon’s strategy for entering the region. However, it does not detract from the shortfalls of Lazada’s back-end offerings for sellers. So, if you’re thinking about becoming a brand on Lazada, browse through what you can bring to the table. Understand how you can optimise your store-front to leverage the market to get the best bang for your buck.