4 Simple Reasons Why Lazada or Shopee Sellers Should Start Their Personal eCommerce Store

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There’s never been a better time to launch an eCommerce business, especially during this COVID-19 pandemic where it accelerated consumer shopping behavior, transitioning away from brick-and-mortar stores to online channels. Yet, when launching an eCommerce business, the first thing that came into every business owner mind would be the online marketplace, such as Lazada and Shoppee.

Lazada and Shopee are the most renowned marketplace in the ASEAN region, where they’ll do most of the heavy lifting for you. All you need to do is to source the right products, upload your listings, and then they’ll handle the rest by providing you with an endless stream of traffic to your listings.

All in all, it sounds like a perfect plan and perhaps the wisest things to do. However, when there is an increase in retailers abandoning their online stores and goes all-in on Lazada and Shopee, this is not necessarily good.

If you just started selling online, it is definitely a good idea to leverage both Lazada and Shopee to sell your physical products and generate revenue at the lowest cost and fastest speed possible. However, your long term plan will be at risk if you depend entirely on the marketplace alone as your major online sales channel.

In this article, you will learn the 4 key reasons on why having your own branded online store is a must in order to build your long-term competitive advantage.

If you already made up your mind to set up your own eCommerce store, you should probably check out another article featuring the comparison of the top 3 eCommerce platforms being used by most of the Malaysian SMEs that may give you a clearer perspective in helping you to choose the right platform to start with.

1. Build Your Brand Equity

Let’s be frank, how many of you remember the seller or shop that sells you the product? 9 times out of 10, most of us only remember the product we bought from Lazada or Shopee but not the seller or shop.

Buyers don't remember who they buy from Shopee or Lazada marketplace

Besides, the entire algorithm of the online marketplace is designed to expose hundreds of similar or related products to consumers such as you, as well as daily deals that are most likely to convert sales. We are sure you have the same experience where after you viewed one product from one seller on either Lazada or Shopee and after a short while, all of your pages will be full of similar or related products from other sellers.

Pop quiz, do you still remember who’s the seller or store that you viewed your first product from?

That is to say, when someone shop on your Lazada or Shopee store, you have near-to-zero brand equity unless you are one of those well-known brands which have already accumulated a reputation even before selling on the marketplace. Take Nestle, Dyson, and Nike for example, these are some of the household brands that are well known before even setting foot in the eCommerce platform.

Hard Truths:

  • Both Lazada and Shopee will be getting all the credits for your sales.
  • You will never build your own brand if rely solely on the online marketplace.
  • The customers don’t really care who are the sellers as long as they find the products they are looking for or they get a great deal out of the transaction.

2. Build Your Customer Base

According to geckoboard, the industry benchmark for the returning customers rate for most eCommerce businesses is about 25-30%. Yet based on our experience, well-established brands can even achieve up to 60% returning customers rate.

build your customer base

However, with limited access to customer information and zero access to customer demographics and purchasing behaviors data, it is highly unlikely you can achieve a returning rate anything closer to the benchmark. In other words, you are missing out on a huge chunk of revenue opportunities.

Whenever there is an order, the only information you can obtain is the customer name, contact number, and shipping address. You can’t even get your hands on their email addresses to build your email list. You may have thousands of followers on your store, but you won’t be able to know who they are. You will never know who viewed your products, who added your products to their wish list, or even those who added your products to their cart but did not checkout. All you can see are those numbers in the reports, and there is nothing much you can do about it. In short, you don’t have total control over your customer data. Worst of all, your customers will be bombarded with similar products by your competitors, suggested by the platform themselves.

On the other hand, with your own online store, it’s a very different perspective. Not only you can have total control over the data of every customer that ever visited or purchased from your online store, but you can also better understand your customer as a person. These customer data will be able to give you a holistic view of your customer, who they are, what they bought, what they like, how much they’ve spent, how frequently they purchased, their last purchase, and more.

By having access to all these customer data, there will be a lot of strategies you can play with, from customer acquisition, engagement, retention to development. Here are some simple examples:

  • Send email to the existing customers for a special promotion or new arrivals.
  • Cross-sell or upsell to those customers who purchased specific products.
  • Offer loyalty rewards to your customers, like birthday rewards.
  • Offer special rewards to those champion and loyal customers as a token of appreciation, or sending special discounts to win back those customers who are about to churn.

At this point, we are sure you’ve started to notice the limitless possibilities when you have customer data in your own hand. Without total control over your customer data, none of these strategies mentioned above can be possibly executed.

3. More Product Flexibility

If you have already started selling on Lazada and Shopee, we are pretty sure you have noticed some limitations on the product listings.

sell your product creatively

Let’s take Shopee for an example, yes, you can upload the product thumbnails and description, however, if you wish to make your product listing more compelling by adding banners or videos, there is no way you can do so, unfortunately. And if you like to offer some customization options for your customers to customize their product, we are sorry to say that is a no go either.

In brief, the online marketplace is designed uniformly to cater majority of the product listing, that is why any special customization won’t be possible. If you wish to sell on the marketplace, then you will have no choice but to follow their canned list of procedures and product attribute fields.

On the contrary, having your own online store means you have the freedom to do whatever you want: from content, to design, right down to where your “Buy Now” button sits. It is not just the display you have control over, but the overall management over how, when, and where you will be presenting your products to your customer.

4. Proactive Customers Acquisition & Retention

The best thing about online marketplaces, like Lazada and Shopee, is that most consumers don’t use the platform to search for a specific brand, but they are mainly looking for a specific product or item. This gives your business a better chance to attract new customers because the likelihood of them discovering your business is increased.

Then again, what if you want to take a more proactive approach towards acquiring new customers or engaging with your existing customers?
For Example:

  • Buying Facebook Ads with better interest and behavioral targeting to drive traffic to your online store and track its purchase conversion.
  • Retargeting those visitors who have added products into cart but never make a purchase for the past 28 days.
  • Create lookalike audiences to find your new best customers based on the most valuable customers in your data pool.
  • Using Facebook broad audience targeting to reach out to people who haven’t interacted with your business, but who are more likely to purchase your products.

If you’re running Facebook ads, you may check out our blog posts below. It’ll save you time and money by making sure everything is ready for success from day 1.

Promoting on marketplace

Unfortunately, all the above approaches are not possible if you’re only selling on the online marketplace. Imagine this, you want to promote your product on Shopee, and the most clear-cut way is to advertise on Facebook. So you did that and now you realize, not only you’re promoting your own product but also other competitor’s product that is similar to yours in Shopee (because of how Shopee algorithm work we mentioned above). You’re also spending your ads money promoting Shopee as a platform for Shopee, for free. The worst part is after all these efforts there is no concrete way of tracking conversion for further campaign optimization.

Having your own online store, on the other hand, is a totally opposite experience; it’s all about you, your eCommerce business, and your customer. You can have total control over customer acquisition and retention. You can even create your own affiliate marketing mechanism to engage with the social influencers or KOLs to promote your online business and attribute each sales conversion to the respective KOLs.

Final Thoughts

Both Lazada or Shopee is like a steroid that can provide you with instant result, but that result can be taken away anytime or deteriorate if you don’t keep up with the dosage. Don’t get us wrong, the online marketplace is definitely a great start for most businesses at any size to gain more exposure for their brands and products, but in the long run, they do more harm than good if you only selling solely on the online marketplace.

However, we have to be very clear that the online marketplace is just one of the online channels for us to generate sales, acquire new customers, and build social proof via positive product reviews and ratings.

In the long run, you need to think about building up your own brand, diverting your customers from the marketplace to your own online store, and creating an eCommerce business that is built to last.

With this in mind, you should consider using both Lazada and Shopee in conjunction with your own online store. Investing time and effort into both marketplace and your own online store will definitely keep your business stay competitive in the current eCommerce industry.

Need any help to kick start your eCommerce journey?

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