How did Shopee overtake Lazada as the leading ecommerce firm in SEA?

Previously, we talked about Shopee vs Tokopedia in Indonesia. Today, it’s time for Shopee vs Lazada. Prior to Shopee’s launch date, Shopee knew that they had to get their name out, and quickly. What did they do right? Well- Shopee had the foresight and ability to analyse the different needs of their various markets and adapt accordingly. Coupled with fast execution and innovative marketing tactics, Shopee eventually claimed dominance in Southeast Asia.

Live Streaming Functions

Lazada saw the success of in-app entertainment features by her parent company, Alibaba, and finally followed in her footsteps religiously. In June 2019 Lazada rolled out ‘Laz Live’, allowing sellers and invited hosts to conduct live streaming shows to engage with their users. This allowed the physical in-store experience to be replicated online, comfortably filling the shoes of what an e-commerce store lacks. Termed ‘Shoppertainment’ by Lazada (which ingeniously reminded me of their competitor- Shopee), it launched in Thailand, the Philippines, and Malaysia. 

Interestingly, in the same exact month, Shopee saw the opportunity to go head to head with Lazada and took it. They launched the same feature, Shopee Live, and covered the existing markets Lazada covered, but more. They also launched in Singapore. Based on countries covered alone, I was amazed at how a smaller e-commerce company can outpace a more established one. The launch of Shopee Live was extremely effective, as sellers and brands claimed to see a 75% surge in sales after they participated in the live streaming sessions.

Innovative Tactics

Shopee did not stop there. Taking it a step further, they launched ‘Shopee Quiz’ together with the live streaming. Incorporated as a section in ‘Shopee Live’, ‘Shopee Quiz’ is an interactive game show, hosted by familiar faces of local influencers. The grand winners will walk away with Shopee Coins, and multiple products from participating brands. (Did someone say free stuff? Sign me up!) To incentivise more traffic, they allowed people to participate in groups. Those who invited participants will also have a higher likelihood of winning. 

On top of that, Shopee Feed was subsequently introduced in Jan 2020. This replicated the ‘Instagram experience’ on Shopee, allowing brands to hold giveaways, and users to comment and like posts. Since Shopee took their time with the launch of this product, the user interface was pretty well-designed and user friendly. With specially curated posts by brands, it gave more credibility to the site.

On the other hand, Lazada launched a similar feed function, all the way back in early 2019. However, this feature did not gain much traction. The user interface was not as intuitive, and the posts seemed like they were AI generated. With lower credibility, users were further deterred from the app and left with one question- did Lazada pull up the function for the sake of it? 

Side by side comparison of the feed of Shopee (left) and Lazada (Right)

Shopee even has the function to post ‘stories’. This short video/photo sharing function is similar to what Snapchat, Instagram, and FaceBook offers.

Singapore Case Study: Market-Oriented

On live streams in Singapore, Lazada went into inviting both local and overseas artists, celebrities, and influencers as hosts. While this secured a high view count, they were simply leveraging on the hosts’ popularity. On the other hand, Shopee did the same, but also extended their coverage to approach local universities students and micro influencers as hosts. By engaging less ‘distant’ icons, it increased the familiarity of the app to users, and allowed them to associate the app as something closer to their hearts. In my opinion, Shopee’s more personal marketing tactic will see a more effective and long-term result.

What’s going to happen now?

The effectiveness of Shopee tailoring their marketing to each market saw success both locally and internationally. From Shopee’s experience, we can learn that continuous strategic planning and innovation is required to adapt to changing consumer patterns. Shopee reminded us that it should always be a continuous effort to not just acquire, but more importantly, to retain customers. Will Lazada continue to allow herself to be overtaken? Maybe Lazada was just getting complacent in Southeast Asia, and needed someone to come along to remind them what’s what. With Lazada’s recent restructuring efforts, we are looking forward to what they can bring to the table. We believe that nothing is ever too late!