Lazada Or Shopee? Which Platform Can Help You Sell More?

Written by Marc Adrian

If you’ve been attempting to make a name for yourself in Southeast Asia’s burgeoning e-commerce market, you’ve certainly heard the question: “Lazada or Shopee—which is better for me?”

One can argue that you’re free to sell on both platforms, but if you’re one who is just starting out and want to focus on learning the ropes, deciding between Lazada and Shopee as your launchpad can be essential in your initial steps. Having said that, both platforms are a good place to start your business, and choosing between the two is more complicated than it seems. 

It’s crucial to keep in mind that there are a number of aspects to consider, which would mostly revolve around the following:

• What kind of things do you want to sell?
• Fee structure for marketplace commissions that you’re most comfortable with
• The in-house logistics systems of each platform’s shipping rates
• The typical operation timeframe that each choice follows—and how you might change or work around it.

If you want to focus your efforts on one platform to achieve success, here’s the lowdown on the advantages and disadvantages of Lazada and Shopee:

Lazada

Because of its large user base, Lazada is frequently considered the best platform to start. This appeals to sellers since, in the world of e-commerce, a larger audience almost always equals more opportunities, which leads to greater success.

As a subsidiary of Alibaba, the world’s most successful e-commerce company, Lazada is well-equipped in providing the easiest, most convenient, and option-rich shopping experience in the region. Not to mention, they pioneered the e-commerce boom in Southeast Asia. They have an extensive range of benefits, advantages, functions, and features to both consumers and their sellers, which many actually have grown accustomed to. 

Here’s a quick rundown of the benefits and drawbacks that you’ll likely encounter when selling in Lazada.

Pros

Due to the years of development and the support of online retail giant – Alibaba, seller could benefit from the following:

1. A larger user-base

Given that Lazada has one of the largest user bases in the world, it’s no surprise that it offers a wide range of possible prospects for increasing sales and building brand awareness.

Sellers can easily leverage the potential that comes with the large customer base Lazada has. Coupled with a good strategy, reaping its benefits in a relatively short period of time is not impossible. 

2. Seller resources and tools

Lazada introduced some of the most effective selling tools on the market, allowing merchants to easily achieve higher levels of profit. Lazada Academy, for example, provides complete lessons and training on effective selling and paid advertising. Whether you’re a first-time seller or a seasoned pro, you’ll find the platform’s support invaluable.

3. Shipping and inventory assistance

Lazada eliminates the hassle of needing to arrange your own shipment because the platform handles everything for you. If you don’t have access to a warehouse, Lazada has their own storage facility where you can stock your inventory at an affordable price.

Cons

Despite being the pioneer in the eCommerce scene in the region and its efficient fulfillment process, there are some challenges that you might also face using its platform.

1. Fees and commissions

Over the years, Lazada’s commission structure has been viewed as a source of contention. This is due to the fact that it depletes a major portion of a store’s profit. The commission fees and fixed selling prices are a tiny price to pay given the opportunity to tap into its massive user base. To get over the point of breaking even, you’ll need to increase your sales volume.

2. Customer support

They don’t offer live customer support to sellers. Should you require their assistance, you’ll need to email them and wait for two to three business days for a response. 

Shopee

Shopee has become one of Lazada’s biggest competitors in the e-commerce space in Southeast Asia including the Philippines. With a strong and gimmicky marketing campaign, it’s become a household name in a short period of time. 

Pros

While Shopee faces tight competition from Lazada’s overwhelming presence and high market share claim. The latter, on the other hand, has been able to overcome these challenges thanks to a number of crucial features that help it stand apart.

1. Commission

Shopee does not take a commission from sellers. As a result, sellers can earn more money selling on the Shopee’s platform compared to Lazada, if based purely on the fees paid to each platform for the listing. 

2. Shipping

Another key advantage of selling with Shopee is that it provides free shipping for the first 5kg. This is a difference-maker for merchants who sell smaller goods. If your products are small and lightweight, you’re virtually shipping your products for free.

3. Easier onboarding process

From the get-go, Shopee targeted small and local businesses to join their platform. Because of that, the onboarding process was tailored to the mass market, making it easier to comply with and putting in place a more streamlined process more suited to the Philippine market. 

4. Customer base

As of late, Shopee Philippines has overtaken Lazada in terms of monthly traffic, with over 70 million visitors every month compared to Lazada’s 40 million.

5. Customer support

Unlike Lazada, Shopee has 24/7 customer service for sellers. 

Cons

Shopee also has its own set of potential drawbacks that every merchant needs to watch out for:

1. Local competitors

Shopee’s growing popularity is a double-edged sword. While more people does mean more potential customers, its growing seller base also meanw you’ll be competing with more people. 

2. Scam listings

Due to their growing popularity and easier onboarding process, it’s inevitable for them to attract just about anyone who wants to make money through their platform, and that includes scammers.. It won’t directly affect a seller, but customers are wary of new and verified sellers on Shopee. Especially if they don’t have many reviews of their products and services.

3. Payout processing

When a consumer buys something on Shopee, the money is held in escrow and only credited to the seller when the customer confirms they have received the item or the Shopee Guarantee period has expired.

The payment will appear on your seller balance once the consumer confirms receipt or when the Guarantee period has passed. You can then withdraw the money to your bank account. And from there, it will take another two to three business days to reach your bank account. 

While it’s a secure payment scheme for customers, it can pose a potential risk for sellers especially for failed deliveries that are solely the couriers’ fault or worse, a fraudulent claim initiated by a customer. 

Verdict

Shopee is attractive for sellers due to its large customer base and more seller-friendly system in place. However, it will take a lot more effort for you to stand out due to the ease of which new sellers can join the platform. 

Lazada may have a slightly smaller audience, but that’s not to say that nobody is using it. The logistical support and seller resources are extremely valuable for new entrepreneurs who need all the help they can get in setting up a shop.

Both platforms are promising and have the potential to grow your business, but you’ll have to deal with the trade-off you chose in exchange for getting listed in the platform of your choice. Which trade-offs are you comfortable dealing with? And is it something you can easily maneuver yourself? Ask yourself these questions and you’ll probably get your answer to the question “Lazada or Shopee?”.