I recently built a new computer and I’m the type of person who buys the components individually and assembles them myself (read: nerd). Due to the lockdown measures in Malaysia, I sourced all of my parts online, more specifically through the typical ecommerce platforms like Lazada and Shopee.
While I’m not a new ecommerce user by any means, I realized these platforms are trying to do so many (especially ineffective) things to capture the market when all they really need are a few simple ways to entice what the bulk of customers (like me) REALLY want.
Our team at Momentum Works recently did a Stop-Start-Continue feedback exercise and I thought it’d be interesting to share what I think Lazada and Shopee should stop, start and continue, from a real user’s perspective.
I have checked with a few people around me (not physically) across a few countries – and they agree on the points below. Might not be a scientific sample size, but definitely worth exploring:
- Developing more unnecessary features (Livestreaming, feed, games, etc.)
It seems like Shopee and Lazada are competing with each other to become a superapp of unnecessary features when it comes to ecommerce. While I do agree that livestreaming has become a new medium for selling (it’s just an upgraded QVC to be honest), Lazada and Shopee is just not the place to do it – the views in the picture below sums it up.
And as if we have not enough feeds to scroll in our day, there is a feed of totally irrelevant things for me to scroll through.
Wait a minute Brandon, it has 44k views and 4.1k comments, that surely means it’s working right? Wrong. The 4.1k comments are all from other sellers promoting their own stores – rendering the 44k views meaningless.
Gamification can be a good feature when done well; promoting brand loyalty and stickiness by providing the chance to users to win something tangible. But not when you have 11 games, Lazada. What’s the focus here?
And all these serve to just clutter the app more than it already does.
My point to this is not that these features are necessarily useless, but they are if the main parts that people actually care about like competitive pricing, good vouchers and free shipping aren’t done right. And from a business point of view, if the resources spent on all these features were instead channelled into giving customers free shipping, I’m certain that it would make way more impact.
- Giving fake shipping discounts
You know the feeling when you’ve spent an hour looking for a parking space and you finally thought you found one, only to be surprised by a Kancil (or whatever small-sized common hatchback in your country) parked in it? That’s how fake shipping discounts feel like.
Shipping discounts on ecommerce platforms has taken my trust issues to a whole new level.
Initially I thought maybe it’s just because of where I live (mind you, I’m in the Klang Valley, which is the most densely populated urban area in Malaysia) but after speaking to my Indonesian colleagues, this fake shipping discount tactic seems to be true over there as well (and she lives in Jakarta).
For those of you who do not know Bahasa, essentially Tokopedia said that the product was entitled for free shipping; but until you reach the checkout page is when you find out that “free” actually meant a mere 5000 IDR (0.36 USD) discount.
A study by WorldPay showed that 56% of consumers who abandoned their cart before checkout did so because they were presented with unexpected costs, ie: fake shipping discounts. Seems about right.
You might argue – but it is alright as a tactic no? The platform must have done some numbers to show that fake discounts work out better than genuine discounts or no info on discounts at all? True, but you are not a one page ecommerce scam from Shenzhen but a platform that is trying to build a reputation in the country.
- Giving customers what they ACTUALLY want
The path to a lover’s heart is complicated, but one to an ecommerce customer’s is not. The formula to a customer’s brain when choosing which ecommerce platform to go on is simple: Which gives me the most amount of value for the least amount of money? I’m pretty sure this statement has held true since mankind first discovered trade.
And in the context of ecommerce, it would be aspects like: competitive pricing, free shipping, REAL discounts/vouchers and easy return options, just to name a few. Especially when saving money is a big thing in Asian culture, any kind of cost related factor greatly moves the needle in a customer’s willingness to purchase.
In fact I would go as far as saying, just free shipping itself (on all products) would be enough to make customers use your platform significantly higher than your competitor’s. In fact, I switched from Lazada to Shopee because they seemed to have more free shipping options when using their wallet. We talked about How Shopee overtook Lazada as SEA’s leading ecommerce platform a few months ago.
- Improving core ecommerce functionality like logistics and payment
Ecommerce has come a long way since its inception in Southeast Asia. Delivery time has significantly reduced with players offering next day, and even some cases – same day delivery.
Closing the gap of receiving an item the moment you make a purchase would be a key advantage in the scene while also capturing the portion of ecommerce skeptics who prefer to shop in brick and mortar because they don’t like waiting.
By the way, Meituan in China is already offering 30minutes to 1 hour delivery (consider it on demand) for ecommerce in many cities, for a fee as low as CNY6 (less than US$1). Even if you like cheap stuff, the cost of going out (and searching, and maybe parking) is surely higher than that?
Payment options have also increased with the addition of digital wallets and Buy Now Pay Later options (SPayLater by Shopee) that would further increase the potential reach of customers, especially those without credit cards, or with credit cards that do not offer instalment plans.
While I am by no means an ecommerce expert, I do know what factors propel me (and most people) to tap on the checkout button, and it has definitely nothing to do with livestreaming, product feeds or fake shipping discounts.
As Confucius used to say, “Life is really simple, but we insist on making it complicated”（世上本无事，庸人自扰之）.
Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].