eCommerce has taken the world by storm.
According to eMarketer, worldwide retail eCommerce sales grew by 27.6% to a total of $4.280 trillion in 2020 and is expected to hit $4.9 trillion in 2021. The COVID-19 pandemic has certainly played a part in accelerating this growth, as consumers turn to online stores for their shopping needs during the lockdown.
A similar scenario occurred during the SARS outbreak when Chinese eCommerce giant Alibaba was still finding its feet. Nowadays, we’ve got a whole range of eCommerce platforms to choose from - Amazon, Lazada, Qoo10, Taobao and of course, Shopee.
Shopee was founded in 2015, and despite being relatively late to the eCommerce game, it’s currently the top eCommerce platform in Singapore - with over 14 million monthly web visits (Q4 2020) and ranked at number one on both the Apple App Store and Google Play Store.
How has Shopee managed to outshine its competition? In this article, we’ll be analysing the various aspects of Shopee’s business and marketing strategy that has allowed it to flourish in today’s crowded eCommerce landscape.
When Shopee first launched, it shook the market by offering zero commission/listing fees - meaning that it was completely free for sellers to run their business on the platform.
At the time, Lazada was the top-performing eCommerce platform and charging both commission & listing fees - significantly raising the barrier to entry to the platform. This made it a no-brainer for small businesses, who all jumped on the Shopee bandwagon to cut costs and capitalise on the growing platform.
Shopee earns its revenue from selling ad placements on their mobile platform, which are offered to businesses that are listed on Shopee Mall.
Even when Shopee started charging a 1% transaction fee in August 2018 (which has since risen to 2%), it’s managed to maintain its number one position by focusing on giving users a good mobile experience.
According to a study by Google and Singapore’s Temasek Holdings, more than 90% of internet users in South East Asia (SEA) are accessing the internet through their smartphones.
Southeast Asians are the most engaged mobile internet users in the world, and when Shopee first came onto the scene in 2015, they immediately focused on giving users an optimised user experience (UX) and that caters to a younger audience who grew up with smartphones as an essential part of their daily lifestyle.
Buyers can enjoy an end-to-end online shopping experience directly on the mobile app - where browsing, ordering, payment and delivery tracking are all made easily available to the user through an intuitive user interface (UI).
The app also provides recommendations that elevate user experience by helping buyers to make quicker and better decisions. By using artificial intelligence and machine learning, the app can process user data, item information, and user-item interactions to determine what products a specific user is likely to be interested in. This helps cut through the noise and help users to filter through the millions of items listed on the platform.
Shopee recommends items based on their popularity, content category and collaborative filtering. Collaborative filtering is a process used to recommend products to users based on behaviours of other similar users. For example, if person A and B both purchase the same pair of shoes, and person A starts browsing for Nike socks, then Shopee may recommend Nike socks to person B, based on their similar behaviours. This is similar to the “lookalike audience” option on Facebook, which targets ads at users with similar behaviours/interests as other users who interact with the same Facebook page.
By combining these various approaches, Shopee is able to successfully recommend new products that are actually relevant and useful to the user, making them more likely to browse through the app and make a purchase on the platform.
Sellers also benefit from being able to chat with customers, create listings, track shop performance and receive payments through the mobile app. Shopee also lets merchants link their website and social media accounts to their Shopee page.
Lastly, we can’t talk about Shopee without addressing their back-to-back viral campaigns.
Their first viral campaign came during their 11.11 “Single’s Day” campaign in 2018, which combined a TikTok-style mass dance with the popular “Baby Shark” children’s song. Throughout the ad, new products constantly appear on-screen, and product appearances are always accompanied by the Shopee sound-byte, which plays when you get a notification from the Shopee mobile app (read more on the importance of audio here).
By combining a popular tune with simple dance moves and silly lyrics (“Go Shopee pi pi pi pi pi pi”), Shopee cemented themselves into the public consciousness, and has consistently produced one viral campaign after another - with the 9.9, 10.10, 11.11 and 12.12 campaigns acting almost like the “flavour of the month” in the online digital space.
Shopee also has a good track record of brand ambassadors, choosing celebrities that come from a diverse range of nationalities & entertainment categories.
Whether you love them or hate them, it’s hard to deny that Shopee has certainly set the standard for other platforms; despite being late to the game, it’s established itself as a viable competition and trendsetter in the eCommerce industry.
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