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Lazada vs Shopee: Which One You Should Start First in Southeast Asia

Louis Lu
Lazada vs Shopee, Which One You Should Start First in Southeast Asia - Easy2Digital.com

A Single eCommerce channel strategy would not be your final strategy in your online selling journey, wherever you are focusing to sell. But the fact of the matter is that determining the better option involves more factors, such as budget, products, target users, etc. We like to talk about Southeast Asian opportunities (Singapore, Philippines, Malaysia, Vietnam, Indonesia, etc), and choose between the two Southeast Asian e-commerce giants. It is important to understand that there is a range of different factors to consider. It’s for determining which platform is more proper to start, such as:

By the end of this piece, you can learn the primary differences between Lazada vs Shopee. It can help you decide which one to start with better cost efficiency and more active potential buyers.

Lazada vs Shopee – The Type of Store You Can Create

Lazada

On the platform, there are 3 different types of sellers being:

a. Local seller

b. LazMall seller

c. LazGlobal seller

Shopee

1. Shopee Mall sellers

They are official shops that sell their own brand and/or an official distributor of a certain brand. Shopee might invite a seller as a Shopee Mall seller depending on the shop’s performance. Application to join as a Shopee Mall seller is openly provided that requirements are met:

2. Preferred Sellers

The program provides benefits to sellers exclusively selected by Shopee in recognition of their excellent sales and operational performance. A seller will get a Preferred badge shown on your shop and listings if you become a Preferred Seller. To become a Preferred Seller, you’ll have to fit the criteria of:

Shopee measures the seller’s performance in a fair and transparent manner. You’ll have to meet these performance targets to qualify for the Preferred Seller Program:

3. Overseas Sellers

They are sellers that sell from China and South Korea

4. No label Sellers

They are the customer-to-customer sellers. They can buy or sell in Shopee.

Conclusion of Lazada vs Shopee:

Both platforms provide C2C, local seller, brand seller, and global seller account options. But Shopee seller requirements look much lighter and easier. It’s because it starts the selling and testing the market water temperature without too many fees occurred. Although Shopee has a smaller market as opposed to that of Lazada’s, this is a weakness. So if you’re just starting a new eCommerce business in Southeast Asia, Shopee wins

Winner: Shopee

Store Fee Consists of the Following Payments:

Lazada

Shopee:

(*Note: Transaction fee is subjected to certain VAT (GST) charges.)

These are all the fees the marketplace will charge you. It is necessary to include these costs into product prices to avoid unnecessary spending on your part.

Conclusion of Lazada vs Shopee:

In terms of the order commission as a Brand seller, Lazada min., and max. (1% -4%) charge range looks more attractive than Shopee (3% – 5%).

Winner: Lazada

Lazada vs Shopee – Store Order Fulfillment

Fulfilled By Shopee (FBS)

Shopee has started to offer its in-house fulfillment services called Fulfillment By Shopee (FBS). Some of the benefits of using FBS are:

Take Malaysia for an example, and let’s look at the criteria to use FBS and how much it costs.

a. FBS requirements

Fulfilled By Shopee (FBS) is only available for certain overseas sellers. Due to Shopee’s lack of fulfillment capabilities, companies are only accepted through invitation.

And as far as I know, Shopee doesn’t have a centralized warehouse for cross-border sellers, as Lazada has in Hong Kong.

As mentioned on Shopee’s website, FBS is currently only available to top brand principals and distributors, as well as key sellers on Shopee with high sales volume and those who lack fulfillment capabilities.

Hopefully, this will change in the future as FBS has competitive rates and let Shopee take care of order inbound, quality inspection, storage, pick & pack, shipping, returns, and refunds.

b. FBS costs

Looking at FBS Malaysia, Shopee starts to charge RM1.85 (USD 0.44) per item excluding GST as a fulfillment fee, after the first three months. The withdrawal fee will remain free of charge.

If you keep stock for more than 30 days, they might charge you additional costs later. Yet, they will inform this 30 days in advance.

Another benefit of using FBS is that Shopee can give you discounts of up to 40% for the fulfillment cost, depending on how much you sell. To get the discount, you should discuss it with your account manager.

c. Delivery time

Shopee has appointed various local shipping companies in local markets. One of the biggest is NinjaVan, which Lazada also uses. The general shipping time is 2-8 days, while express delivery will reduce the shipping time to 1-3 days.

d. Packaging

Packaging materials and techniques differ depending on what products you sell. 

e. Storage

Shopee will store your products at a local warehouse. When you receive an order, the warehouse will process the order, manage to pick & pack and ship the product earliest possible. If you use FBS, Shopee will use its own appointed logistics companies, such as NinjaVan.

As mentioned above, the rates are competitive when using FBS and you pay RM 1.85 (USD 0.44) per item in Malaysia, at least. You can also enjoy discounts of up to 40% if you sell in high volumes.

Fulfilled by Lazada

Fulfillment by Lazada is Lazada’s supply chain management offering to online sellers. It basically means letting Lazada be the manager of your online fulfillment. By doing so, you will be able to focus more on marketing and sales
Now let’s look into what FBL can offer you overall. In terms of warehouse operations, Lazada logistics provide you with the following services:

Storage Capabilities

FBL offers three kinds of storage rooms namely: fenced zone, cold room, and bulky warehouse.

The fenced zone is where all high-value items are. It is a secured area that only authorized staff have access to. Meanwhile, items that need to stay below 25 degrees Celsius will be stored in the cold room. Large items have different requirement needs and will be kept at the bulky warehouse.

Transportation

Moving forward to the transportation process, you can expect Lazada logistics to take care of the following tasks:

On top of that, Lazada also takes care of inventory management as well as COD payment if there is any. Availing of the FBL services also comes with insurance or a financial guarantee at the end of it all.

There will also be a re-labeling of your products under FBL which provides additional branding benefits.

FBL gives you two leverage points: the logistics and the commercial edge.

Your products will have an FBL tag. FBL products have much faster delivery. Hence, it gives you a marketing advantage in attracting and converting viewers into customers.

In availing of FBL, FBL charges you with four kinds of fees: fulfillment, kitting, pick-up, and storage fees.

The storage fee includes all warehouse operations such as picking, packing, and inbounding orders. Kitting pertains to any preparation work your products need such as re-packing or adding an extra line of protection for your products by wrapping them with plastic films or bags. The FBL rate does not include GST. You need to consider this when re-calculating your billing.

1. Lazada Philippines

Here are the criteria for determining the size of your product package:

As for the kitting fee, it will only cost you 5 PHP per item. For the storage fee, if your products stay in the storage facility for less than 60 days, the storage fee will be waived. If it is longer than 60 days, the standard rate is 790 PHP per/month. Per cubic centimeter.

There is no standardized rate for the pick-up fee. It can vary per person and will be communicated separately.

2. Lazada Singapore

Lazada SG recently lifted the long-term storage for the meantime due to COVID-19. This will change upon the end of the pandemic. The rates to be discussed here are shipping rates depending on the shipping option of the customer (namely FBL Standard and FBL Priority).

< = 5 kg $0.99 5.01 kg – 10 kg $3.45 10.01 kg – 20 kg $5.59 20.01 kg to 30 kg $13.08

The customer will shoulder a shipping fee of $2.99 regardless of how much the package weighs.

< = 5 kg $2.49 5.01 kg – 10 kg $4.95 10.01 kg – 20 kg $7.09 20.01 kg to 30 kg $14.58

The shipment fee for the customer is only $1.49 for this one.

< = 5 kg $0.51 5.01 kg – 10 kg $0.66 10.01 kg – 20 kg $2.80 20.01 kg to 30 kg $10.29

The fee to be paid by the customer amounts to $5.99.

< = 5 kg $2.49 5.01 kg – 10 kg $3.66 10.01 kg – 20 kg $5.80 20.01 kg to 30 kg $13.29

The customer will pay $2.99 for the shipping fee for whatever weight of the item.

3. Lazada Malaysia

Similar to Lazada SG, the long-term storage fee has also been temporarily lifted due to COVID-19. Some factors that can affect the shipping fee would be the weight of the product, the shipping provider, and the location.

Klang Valley Johor and Penar West Malaysia East Malaysia In-Between Regions of East and West Malaysia

3.50 to 34.30 3.50 to 38 4.50 to 39 7 up to 312 9.50 to 340

The numerical values are written above are all under the MYR currency.

The maximum weight for the products is 30 kg. Packages that weigh more than 30 kg will incur an additional kg charge ranging from MYR 0.70 to MYR 10 per kilogram.

4. Lazada Indonesia

Lazada Indonesia does not charge for the pickup and return service as well as the storage and re-working fees. You are only charged for the shipment fee of the ordered items of the customer. 

Refer to the table below for the FBL rate for non LazMall items:

≥ 4,000 Items Shipped 2,250 to 3,999 Items Shipped 500 to 2,249 Items Shipped <500 Items Shipped 3000 3,500 4,000 7,000

The IDR currency applies to all the monetary values indicated in the table.

Meanwhile, LazMall items are charged with IDR 3,000 per item that is sold. The team will send you the billing report at the end of the month. The charges will be deducted from your total revenue.

Conclusion of Lazada vs Shopee:

In terms of the platform itself logistic service, both platforms are able to provide fulfillment, shipping, packing, and return handling services by charging a certain fee per order. The fee varies by product category, size, and weight. However, Lazada has its own warehouse in Hong Kong, which facilitates cross-border and global sellers to arrange good storage and delivery to every corner of the world.

Winner: Lazada

Lazada vs Shopee – Marketplace Buyers

Lazada

Given the sheer fact that Lazada has one of the largest user bases in the world to date. It’s no secret that it also holds a wide range of potential opportunities to acquire more sales and establish brand rapport. When you are doing this correctly, you can use any selling strategies to harness the potential that comes with the sheer number of customers. These customers who visit Lazada every day can see significant results in a relatively short time.

That said, should you decide to go stick with using Lazada for your e-commerce business strategy. I would recommend optimizing your product listings and clearly identifying your audience with Split Dragon’s tools without having to lose sales to your competition.

Lazada Marketing & Lazada Seller Promotion 101: 10 Things To Do & 1 Thing Not To Do

Shopee

Shopee does not give you as much exposure as Lazada. It offers sellers a lot of perks. However, the company is still figuring out how to weed bad sellers at the same time. This explains why Shopee has a smaller market compared to its Lazada counterpart. As you can see, Lazada is cheaper with the bigger electrical stuff, but when it comes to the smaller or more obscure stuff, Shopee wins. Perhaps this is because Shopee has wholesalers and not just resellers.

Conclusion of Lazada vs Shopee:

If you’re selling mainly the tiny and smaller items, with lower pricing, Shopee is your cup of tea. On the other hand, Lazada is for bigger electronics and stuff, and a place to build your brand, customer loyalty rather than just pricing, pricing, and pricing.

Winner: Tie

(Note: Regarding Lazada vs Shopee, I’m not going to deep dive into product listing, optimization, and marketing, because it’s quite similar to Amazon SEO and advertising strategy. Here are two articles regarding these aspects)

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