E-Commerce Trends How different is Shopee from Amazon?

Like Amazon in North America, Southeast Asia has Shopee. Shopee is a marketplace platform with Singapore IT company SEA group as it's parent company. Shopee, which opened its service in 2015, has grown into the No. 1 e-commerce platform in Southeast Asia, starting with Singapore with the explosive demand for online purchases due to the COVID-19 pandemic. It has now expanded its market to South America. Compared to the past, Southeast Asian markets have been attracting attention as Southeast Asian consumers' purchasing and Internet penetration rates rise and local demand for the K-brand increases. Shopee, Southeast Asia's largest e-commerce platform, is one of the most attractive options for sellers considering the expansion to global marketplaces.

Shopee, called "Amazon in Southeast Asia," has many similarities to Amazon, but it has differences in many ways. For example, Amazon has a higher proportion of consumers' purchases through PCs, but Shopee is focused on mobile. In fact, there are statistics that 74% of traffic generated by Shopee (based on Shopee SG) occurs on mobile.^[1] So what other differences are there? 1. Shopee is a platform that focuses on brand sellers and shops. Amazon gives badges such as 'Bestseller' and 'Amazon's Choice' for superior 'listings'. This is given individually only to the listing, and does not apply to other listings of the same brand. While Amazon operates a marketplace centered on listing and products, Shopee grants badges such as "Mall" and "Preferred Seller" to "Shops" corresponding to brand stores in Amazon's case. The listing of sellers who meet the requirements can have a high competitive advantage because customers are exposed to the top page when searching for products. In addition, the fact that it is exposed to a dedicated account on the main page and that many consumers search for filtering under the conditions also demonstrate the importance of obtaining "Mall Seller" and "Preferred Seller" badges.

Unlike Amazon's "Best Seller" or "Amazon's Choice" badges, which are selectively granted to only a small number of listings, Shopee's "Mall" and "Preferred Seller" badges can be granted if certain requirements are met. However, because the requirements are not difficult, without the badge, market competitiveness is greatly reduced, and it is not easy to secure meaningful sales volume.

There is a requirement to qualify for 'Preferred Seller' and 'Mall Seller'. In the case of 'Preferred Seller', the following qualification requirements must be met to be recognized as a 'reliable seller' authorized by Shopee. (Refer: Based on 'Preferred Seller' qualification requirements by market)^[2]

If a seller meets all of the above requirements, it can be registered as a Preferred Seller. You can check it at 'Seller Center' > 'Data' > 'Preferred Seller'. After meeting all requirements, the seller center let you know that you are now a Preferred Seller and allows you to take advantage of top exposure, dedicated advertising programs, and dedicated promotional tools. While "Preferred Seller" refers to a "seller" certified by Shopee, the "Official Mall" seller is a brand company recognized by Shopee. To become an 'Official Mall' seller, a seller firstly must register his brand. Unlike Amazon, which can register a brand only by applying for trademark rights to countries such as the U.S. and the U.K., Shopee can register a brand as soon as it proves that the brand exists nationally. Although brand registration and operation are free, in order to become an Official Mall for Malaysia, it is necessary to prove 'more than 100 sales per day for 90 days or an average of 15 orders per day or more than $1,000 per day'. (Note: Official Mall qualification by market)^[3] Additionally, the seller can become an Official Mall by following Shopee's listing regulations (do not upload logo/color background/promotion information to images). If you become an Official Mall, you will be given a red badge called "Mall" on your listing and can be certified as an official seller. It should be noted that only genuine products must be sold and additional obligations such as accepting 100% returns within 15 days must be observed.

2. Shopee is totally different from FBA. Is it better? The most obvious difference between Amazon and Shopee is the logistics system. In the case of Amazon FBA, inventory is pre-stocked in Amazon warehouse in the U.S. and Amazon delivers it directly whenever an order comes in. On the other hand, Shopee operates a method in which after ordering, when the seller ships the product to a domestic house located in Gimpo, Gyeonggi-do, where Shopee performs the remaining procedures. Like these two distinctly differences, their advantages and disadvantages are clear.

Shopee's method has the advantage of reducing the burden on sellers compared to Amazon's FBA method in shipping domestic logistics locally. In the case of Amazon FBA, the seller has to create and manage the Shipment himself, and there are cumbersome processes until the cargo is placed in the FBA warehouse in the U.S. In addition, a sufficient amount of inventory must be received at a time, resulting in an inventory storage fee. If the sale is not done well, it can cause a big loss. In other words, Shopee's product delivery method has a clear advantage in terms of simplicity of the procedure and minimizing the risk of forwarding.

However, there is a disadvantage that consumers feel that the delivery period is quite long because it is shipped from Korea after order confirmation. Based on Shopee Singapore, it takes about a week for local consumers to receive the product. This is a pretty big gap compared to Amazon Prime, which guarantees delivery within about two days. Since it has penalties compared to local sellers and offline distribution channels, sellers must secure competitiveness by providing differentiated values. In addition, since the product must be received in the collection area within five days including the order date after the order ^[4], the burden of carrying out the delivery work at all times must be borne. 3. Shopee's advertisement is a bit weak. Differences in advertising As the keypoint of Amazon's business is PPC advertising, the importance of advertising in Shopee is considerable. However, compared to Amazon, the current commercial means of Shopee are quite limited and the use of advertising data is weak due to external reasons. In the case of Amazon, there are various ways to expose advertisements, and various options such as video advertisements, product target advertisements, Amazon external target advertisements, and banner advertisements are provided. Shopee's ads, on the other hand, are limited to three types: 'Keyword', 'Shop' and 'Discovery', and Shop ads cannot be used unless they are Preferred Sellers.

Shopee composes the listing in the order of > Shop Information > Shop's Other Products > Product Information > Consumer Review > Other Product Listings (Advertising). Since internal advertising in the listing is exposed in the lowest area, the advertising effect tends to be lower than that of Amazon, where PT advertising is exposed directly below the bullet point.

In addition, Shopee does not provide enough advertising-related data for efficient advertising campaign operation. However, Shopee has been gradually upgrading advertising-related services, actively encouraging external marketing, and making various efforts such as supporting some costs. 4. Attractive Platform for Global Expansion – Shopee Shopee is a fairly seller-friendly platform considering its relatively easy sales procedures and low sales fees (3%), real-time chat inquiries, and a variety of support programs (cost support/training/incubating, etc.). Also, unlike Amazon, which requires strict internal regulations on images, bullet points, and detail pages, Shopee is freer to organize product pages and easier to enter.

Shopee, which has grown explosively enough to be nicknamed the Amazon of Southeast Asia in two years, is a platform with attractive elements in many ways. If Shopee's attractive characteristics are suitable for its brands and products, it is recommended to actively consider entering Shopee. Cello Square, a digital forwarding service that supports global expansion If you are preparing to expand beyond Amazon to the Southeast Asian market with Shopee, we recommend using Samsung SDS Cello Square, a logistics supporter that will ease logistics concerns.

Cello Square has been growing with excellent partners. First, it aims to connect with various platforms, and it is possible to easily connect logistics services through Open API. It also connects various shopping malls and platforms, and helps sellers in the shopping mall use logistics services easily and quickly.

Second, it provides logistics services in collaboration with partner companies as customized to customers who utilize various functions in fields such as international logistics, customs clearance, local logistics, and warehouses.

Finally, Cello Square studies a joint business model that creates and launches new independent services by combining the latest IT-based logistics services with services with partners' experiences.

Therefore, using Cello Square has the advantage of being able to use services exclusively for customers, which will enable Cello Square to enter the global market faster, easier and more efficiently. References [1] 『Shopee Introduction for New Sellers 』, Shopee Korea
[2] 『What is Preferred Seller?』, Shopee’s Seller Training Hub, https://shopee.kr/edu/courseDetail/533?lessonId=1715
[3] 『Official Mall』, Shopee Seller Training Hub, https://www.shopee.kr/edu/article/10211
[4] 『Next Asean Power Seller 2021 a 2nd round of education 』, Shopee Korea

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