5 Most Important Key Elements for Ecommerce Marketplace Success in 2023 – Especially for those managing Lazada and Shopee Storefront

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South East Asia Ecommerce has potential to grow another 4x in the coming 3 years. Of which, marketplaces like Lazada and Shopee will be the key platform drivers of this huge growth spurt.

South East Asia Ecommerce Market

 

In this post, we want to focus on Marketplace growth tactics. When it comes to success on these platforms, there are 5 key elements to focus on:

5 Key Elements for Ecommerce Marketplace Success

1. Pricing

The most important and biggest challenge in all of this is pricing. Most marketplaces for consumers are about value. They come to seek for variety, immediacy and value, which is often represented by price. Price puts a natural pressure on sellers and mall owners to chip in big discounts and throw promotions without a clear plan what they will do with the acquired customer after the 1st sale. Discounts, vouchers, bundles, shocking sales are all stackable which eats into margins.

It is no brainer that this is one of the make-or-break for Ecommerce marketplace success – it’s important to have a good overview how all these factors stack together. Add in platform fees, free shipping programs, cashback and the fees eat up margins by another 10%. To be competitive, is to have a good breakdown and price your items right. It is a long term game.

2. Assortment

What should my assortment be on Shopee vs Wholesale vs. my own Ecommerce site? Consumers are savvy enough to sniff out deals over time so if you carry the same items across all channels, chances are the one with the best promotions will win over time. If you have intent to build your own DTC Ecommerce site, then get ready to plan out an assortment that is different to cater. Also, be ready to introduce that to the 1st time buyers. Whether it is limited editions, special sizes, quantities or new products, assortment helps.

The other very important influence of assortment is average order values and repeat purchases. In order to achieve ecommerce marketplace sucess, one has to bear in mind that ecommerce marketplace is a great discovery engine and having an assortment means you get more shelf space in the search listings. Make full use of that.

3. Marketing, Advertising & SEO

On Marketplaces, you need to get found in search:

Lazada -> Sponsored Search
Shopee -> Search Ads

and next to your competitor products:

Lazada -> Sponsored Products
Shopee –> Discovery Ads.

If you are just starting to build up, allocate 20-25% of your gross margins or expected revenue to Ads. Spend across the marketplace discovery ads, search ads, affliate solutions, google shopping ads. Don’t over-invest. There should always be a threshold for individual and overall ads contribution to your revenue. Use a worksheet to track and assign each channel to the right funnel. If you are in a more mature stage, maintain at least 10% – 15% of your spends assuming your sales are stable and you can more accurately forecast sales revenue. Invest into Facebook and Google. Remember, without traffic, nothing matters.

Digital Media Buys helps create quick short term visitor gain. Content, Great Listings, well written descriptions builds up credibility and optimizes for search engine in the long term with compounding gains.

4. Customer Service

Ecommerce Customer Service can influence the purchase by up to 40-50% of sales. We believe that everything that can be purchased will eventually have a space online. Think Jewelery, Tyres, Cars, Properties, Services where the typical journey requires human interaction. This is already happening in Marketplaces as well. If a customer is willing to fork out $5000, $10,000 to purchase the latest gadgets, furniture, gym equipments, chances are there are many others who will warm up to this. The customer service plays an important part and will continue to grow in importance.

With the right people and team behind, a high response rate >99%, faster response time typically under 30mins, there are always opportunities to capture and move the customer towards the right product and convert them. We spoke about customer service at length in another thread.

5. The Product Itself, Of Course

Once people get to your listing, give them everything they want to know so they have the trust to put your product into the cart. The product listing is also an important reason how people find you in ecommerce marketplace, so the title plays a big part. If you are selling something that everyone else is selling, make sure your product listing, the cover photos, the description, the reviews stand out and constantly improve it. If you are selling your own brand, benchmark the top competitor and showcase the value of the product.

Everything starts and ends with the product itself. With a good listing and social proofs like reviews, photos, customer unboxing videos, those create the competitive moat for you to stand out in the ecommerce marketplace.

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