With eCommerce companies like Lazada and Shopee on the rise in South East Asia, I like to evaluate how these eCommerce marketplaces fit into a brand’s growth strategy. If a brand decides to join Lazada or Shopee, boosting visibility in the marketplace goes hand in hand with joining promotional events. The eCommerce marketplace will promote the brand for ‘free’ if the brand offers a special benefit or discount to its customers.
As promotional shopping festivals are organized frequently, many brands struggle to handle this price-sensitive demand from both the platform and their customers. In this article, I share five tips on what you can do as a brand to tackle the problem of price-sensitive demands of eCommerce marketplaces and customers.
5 Ecommerce Marketplaces Strategy Tips
Tip 1: Strategic Festival Selection
Remember your business goal Shopee and Lazada are the leading eCommerce platforms in South East Asia with Lazada having over 150,000 sellers and 560 million consumers (lazada.com). Ecommerce marketplaces offer therefore enormous opportunities for brands to reach new customers. Traffic acquisition is the foremost reason why brands decide to join these platforms. A good strategy to overcome price-sensitive demand from customers is to join only the biggest shopping festivals in the marketplace.
For example, Shopee’s Super Shopping Day 9.9 or 11.11 Shopping Festival. New customers can be acquired during these promotional events, which in turn boosts brand visibility and awareness in the marketplace. Keep in mind that normally, there is a certain traffic/sales level that a store needs to reach to enter the big shopping festivals. As a new brand, it is common to first join a few smaller promotions to boost revenue and brand visibility, which brings me to point 2.
Tip 2: Align Promotional Calendars
Follow your own calendar In order to join the biggest promotions of the eCommerce platforms, a good tactic is to align the product's life cycle and the brand’s internal promotional calendar with the platform’s calendar. Ideally, the promotional events from the platform follow the same cadence as your own (international) promotional calendar. This plays out in the following way: when your brand’s end-of-season sale is in summer, align your timing and price strategy with the promotional events of the platform from June till August.
For instance, Lazada organizes a June Shopping Festival, which fits well with (fashion) brands holding their end-of-season sale around this time. Nevertheless, the promotional calendar on Shopee and Lazada is packed with events and fast-paced, with new promotions starting every other week.
Tip 3: Smart Investment in Promotions
Limit the investment Even though it is not in line with their brand image, brands may find themselves obligated to join several promotional events in the marketplace. If you find yourself in this position, a good way to maintain control is by joining only those events that have low entry requirements. To do this, it is important to check all the shopping festival conditions beforehand, making sure you know all the platform vouchers, price requirements, and shipping conditions. After filtering for events that only require a small investment from your side, the investment stays low while obtaining more visibility inside the platform. Filter, for instance, for events that do not require brands to join the platform vouchers, or do not require the lowest price in the last 30 days.
Tip 4: Alternative Promotional Strategies
Play with your eCommerce store power Discounting products often may not be in line with a brand’s price strategy. Luckily, there are other ways brands can play with the rules and the requirements of the e-commerce platform. One strategy to avoid price reduction directly, is by creating store-wide benefits, ideally with a threshold or minimum spend. Meaning, customers can only receive a 10% discount if they spend 30 USD or more, or if they buy three items. The second option is letting the customer interact with your store.
This means asking customers to put three items in their basket, check in daily, or join your loyalty program. Only if they complete the tasks, do they unlock the store benefits. That way the store benefits as customer engagement increases and the investment is kept low.
Tip 5: Diversify Customer Touchpoints
Don’t put all your eggs in one basket In my view, the biggest mistake you can make is to become too dependent on one stream of new customers. Entering a new market through a local eCommerce marketplace is a great way to boost visibility in that market and grow your business online. However, marketplaces are great for converting customers. The shopping journey often starts on a shopping application, but learning more about the brand and social proof often cannot be found on the platform. Making new customers interested in your brand and convincing them to buy your brand requires a good content strategy.
With that, brands drive customers from social media or content channels to their own .com website or back to the e-commerce platform. Customers eventually become used to shopping through one of the shopping applications, but that does not mean that the Lazada store or Shopee store should be the only touch point with your customers.
Kelly Hezemans is an eCommerce marketplace consultant and managed successfully brands on Tmall and Alibaba.com that exceeded more than 50M USD in turnover.
This blog post expresses her personal views based on her experience in managing eCommerce stores in Asia.