Previously, Momentum Works introduced e-commerce in Southeast Asia from the macro perspective such as infrastructure and consumer habits. But, how do the sellers, an important link in the e-commerce chain, see future development?
The author Maoayang, born in the 1980s, has lived in Singapore for more than a decade. H received his bachelor and master degree from Nanyang Technological University (NTU). After graduation, he worked as a network engineer in Hua XX for two years, and is now a project manager of mobile payment product in Sixxtel. He also owns an online shop by avocation.
When I decided to open an online store in early 2016, I basically knew nothing about e-commerce in Singapore. As I had been overseas for years, I also knew little about Taobao.
I started my online e-commerce venture with Shopee. I picked Shopee after hearing from a friend that this platform was owned by Garena.
Admittedly, Shopee, both on the mobile terminal and the web terminal, is very friendly to e-commerce green hands like me. 1) Completely free of charge; 2) Easy to understand its functions; 3) Smooth and beautiful interface, etc.
So, it only took us a very, very short time to get the product list up. In the days that followed, we used the Shopee app to see how many people viewed our products every day and pushed our products up every four hours by using the free boost function.
Do you think we became the best sellers on Shopee?
Sorry to let you down. In 2018, we closed our Shopee stores because we only completed one order in the past two years, and the buyer was introduced by my friends.
The disadvantages of Shopee platform are summarized as follows:
1) Low flow rate and low purchase conversion rate. This is almost fatal for small e-commerce companies
2) In the beginning, Shopee did not have its own payment and logistics system, which I think not only brought a lot of inconvenience and risks to buyers and sellers but also reduced the source of revenue
3) Too low entry threshold results in all kinds of sellers, some good but others bad. For example, in 2016, it was still easy finding imitations of various sports brands on Shopee, sometimes even on the home page.
Although I had 40 followers, the conversion rate was qui7te low.
As a seller, I don’t think Shopee invests much in its business in Singapore, and it mainly focuses on other Southeast Asian countries.
Even so, I am sincerely grateful to Shopee for it provided me with an opportunity to easily pursue the dream of e-commerce. Besides, as a practitioner of APP development and operations, I realize that Shopee has a group of excellent product and development engineers behind it. I hope Shopee can retain these talents, and perform better after launching its own payment system.
After our failure on Shopee, we did not stop but turned to the then-popular Qoo10 platform. Qoo10 is the shopping website under Giosis Group, which is invested by eBay. It now operates in Japan, Singapore, Malaysia, Indonesia, Hong Kong, South Korea, and China.
The process of opening the store was also a bumpy one. After pondering for several days, two NTU graduates only mastered some simple functions. We finally opened the store by referring to an instructional post on Lion City BBS and by turning to two Qoo10 e-commerce friends.
It was very painful every time I launched a new product there. Because the useless product audit was so time-consuming, and the website was very unfriendly in design.
Though Qoo10 has abundant features and options, its value cannot be realized unless they are truly explored and enjoyed by users. As a result, every time we dined with our e-commerce friends, the most popular topics were teasing Qoo10 web design and the puzzling thoughts of its developers.
For example, I once uploaded 11 images of the newly launched products, and suddenly I realised that I needed to rearrange the order. This required me to re-upload all the 11 images in the right order to amend it. It was very slow to upload the data, and you might fail frequently.
In contrast, on Shopee, you can adjust the order of pictures by simply dragging and dropping the mouse, which makes the experience very smooth.
Even though it is difficult to use the Qoo10 platform, its traffic is still considerably high due to the advantages of being an early establishment, more accumulated users, and big discounts. We finally sold some products without having to use click farms or spend on advertisements.
Up until now, Qoo10 could still bring us orders stably, and during shopping festivals like Double 11, the number of orders increased greatly. Based on my knowledge of the shopping habits of my Singaporean friends, Qoo10 is indeed the most popular local shopping platform. Thanks to huge discounts and promotions, Qoo10 has a firm grasp on local users.
For logistics, what we mainly choose on Qoo10 are Singpost Normal Mail and registered mail. The main reason is that the unit price is relatively low, and we cannot afford the cost of high-end logistics. But the drawback is the service quality of Singpost, for which it has received criticisms from many.
Qoo10 evaluates and grades the speed of every single delivery. If the grades are low, sellers will have no access to some functions. And sellers assume the responsibilities of unfavourable factors, including late delivery, and lack of confirmation from the buyer upon receiving the goods. As a result, we and other sellers have to unwillingly confirm late orders to earn more time for the delivery and to cope with the unreasonable system of Qoo10.
We set up stores in Lazada relatively late, and we chose it mainly because of Alibaba’s takeover.
In general, platform experience on Lazada is similar to that of Shopee’s: the interface is simple and beautiful, and the functions are easy to understand and use. There are not as many options as Qoo10, but it meets all our basic needs. Especially since Lucy Peng joined Lazada, it has been launching new functions and making improvements.
Here are two things that we love about Lazada:
1) Lazada and Ninja Van (it’s logistics partner) have sophisticated API interfaces that make it easy to print your express waybill. And there is a barcode on the waybill for Ninja Van stations to scan and confirm receipts;
2) The response speed and problem-solving ability of Lazada’s customer service are quite satisfactory. Basically, all my problems have been followed up and solved in a timely manner.
While there is still a gap between the traffic brought by Lazada and Qoo10, the gap is continuously narrowing. And as it is so easy to use Lazada’s platform, we sellers are willing to spend more time running stores on it.
IV. Comparison of payment
I am a practitioner in the field of payment, and I would like to talk about my understanding and views on the payment adopted by these platforms. Since we basically left Shopee before it launched its own payment, we won’t discuss Shopee here.
Qoo10 was the first to launch its own wallet and Q coin, and has been publicizing the concept ever since. As a seller, Qoo10 requires a mandatory deposit of SDG100, equivalent to 10,000 Q coins. And this sum of money will be deposited into the seller’s Qoo10 account and be used mainly for the purchase of advertisements on the platform.
Lazada, though owned by Alibaba, has done little to promote the idea of e-wallets. Personally, I think this is not a bad strategy. When the scale of the e-commerce platform is not large enough, especially when it has not tapped into the local retail payment field and formed a closed loop, it may be unnecessary to push the concept of wallet hastily. It is better to focus on what is in front and work step by step.
Another reason is that the local people generally have low acceptance of mobile payment, and they are very unwilling to pre-charge money in their e-wallets. Even many colleagues who work on mobile payment have never used GrabPay, not to mention some “novel” actions such as WeChat red packets, face-to-face red packets and rewarding codes.
When cleaners and cabbies all talk about mobile payment and smart city, it is more necessary for us to keep a clear head and think about the development of Alipay and WeChat payment. It is not hard to see that these payments are the inevitable result of user demand. And it really brings convenience to our life, solves some problems and promotes the development of society to a certain extent.
Many vendors in Singapore promote payment by scanning code, but how many people actually use it?
Under the policy promotion, e-payment has been blooming in Singapore, and each platform has been investing a lot in competing for users and the market by preferential means and cash backs. However, few focus on thinking about each user’s demands and how to provide real solutions that bring convenience to life. Isn’t it a bit like putting the cart before the horse?
V. Understanding the prospect of local e-commerce market
It won’t be an exaggeration to say that low price is the main reason for local users to shop online. It is partly due to Singapore being a small, accessible place. If I can buy something within an hour by subway, why should I shop online for a similar price? Besides, shopping on weekends is by far the most popular local pastime.
This greatly increases the threshold of e-commerce. Unless you have goods of excellent quality and a stable supply chain, it is difficult to distinguish yourself through price wars with standard, homogeneous products.
Does this sound familiar to Taobao in its initial stages? Exactly.
So, we expect that a wave of consumption upgrade will also come quietly with the development of local e-commerce, the cultivation of online shopping habits and trust of users. Popular businesses relying on selling low-end products need to seek transformation, and small players who have little chance can also try to grab a share of the market by providing high-quality products and services.
In addition, what we cannot ignore is that with the development of logistics in Southeast Asia, the continuous inflow of overseas sellers will inevitably intensify the competition in the local market.
In general, we are optimistic that Lazada will surpass Qoo10 as the largest e-commerce platform in the region in the near future. With the strong support of Taobao, Lazada could open up its logistics and bring in more high-quality goods that are difficult to buy locally.
As for sellers that have established or prepared to set up online shops, grasping the next consumption upgrade will be a chance for them to seek survival amidst the furious competition. I cannot help but feel a sense of optimism regarding the development of our store in the near future. Whether we succeed or are weeded out by competition, only time will tell.
Note: this article is submitted by the author and does not represent the views of Momentum Works.
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]