Lazada, Shopee lead the pack in e-commerce race

Krungthep Turakij newspaper reported that Lazada and Shopee have now gained a combined share of between 80 and 90 per cent of the e-market  in Thailand.
According to the Electronic Transactions Development Agency (ETDA), under the Ministry of Digital Economy and Society, the market value of Thailand's e-commerce is worth more than Bt3 trillion a year and expected to see a significant growth of 20 per cent this year.
Thanawat Malabuppha, president of Thailand e-Commerce Association, and CEO & co-founder at Priceza, said there were more than 20 million online shoppers in Thailand in the first six months of this year with more than 50 million products on sales on online platforms. It will increase to  about 62 million products by the end of this year.
"This reflects the fact that the number of individual on-line sellers have been increasing  continuously. For this year, the number of online product sellers is expected to increase by 29 per cent," said Thanawat.
Pawoot Pongvitayapanu, director of Thai e-Commerce Association, also said that Lazada and Shopee have taken a combined market share of between 80 per cent and 90 per cent in Thailand's e-commerce market, using Thailand as their strategic battlefield".
 He said that the e-commerce market will become even more competitive as all social networks, especially Facebook, become channels for selling products online.
 "Based on the association's market information, we can say that social media has become the platform for online trading, enjoying significant growth and now accounting for nearly 50 per cent of Thailand's e-commerce market," said Pawoot.
Lazada was registered as a company involved in e-commerce business in Thailand in 2012. The company posted total sales revenue of about Bt1.62 billion in 2014.  Last year, the company earned Bt8.16 billion in sales revenue in the first quarter, up from Bt1.75 billion for the first quarter of the previous year. The company also posted accumulated losses of  more than Bt2.6 billion in the first quarter of 2018.
Lazada is now the number one e-commerce player in Thailand and Southeast Asia, having about 44.1 million users per month  in Thailand alone. The company aims to increase the number of users on its e-commerce platform in the region to about 300 million by 2030. It recently changed its logo to be more colorful, as well as launched a  brand campaign entitled "Go Where Your Heart Beats" as a starting point to begin a new round in the e-commerce battlefield.
Pierre Poignant, chief executive officer at Lazada Group, said during  an  interview with Krungthep Turakij newspaper that the e-commerce market in the Southeast Asia , including Thailand, is changing continuously, driven by individual consumers spending more time on their smart phones.
"In the past, consumers usually focused on promotions and discount campaigns in buying products online. Today, consumers focus on product quality as well as the experience in the buying process and the  post-sales service," said Poignant.
"We have seen plenty of opportunities  in Southeast Asia, which will see a skyrocketing  growth in the next five years. According to researches  by Google and Temasek, the digital economy market in Southeast Asia will reach US$240 billion in total value in 2025.
"We (Lazada) don't want to be just an online shopping platform, but a lifestyle destination for individual consumers in the digital era, relying on the company's strengths in infrastructure, logistics network, technology, service, and a world-class online platform," said Poignant.
He said that Lazada has a policy to continuously invest in its infrastructure to maintain market leadership. We will add more investment allocated to all dimensions of the online shopping business, including new services and solutions both for sellers and buyers. As the provider of online platform service, we need to provide the best shopping experience, not only online, but also offline concurrently.
"We also bring the know-how and technology of Alibaba for adjustment to the development of new services in the market, such as data analytics and information management, so that all traders will have a better understanding of customers' behaviour. It also include analysis works for demand, market trend and supply chain. The company has also accelerated  the development of turnkey e-payment service to support its Lazada Wallet online payment platform, which is being launched into the market.
"One of our key strategies is 'Shoppertainment', which is a mixture of entertainment and lifestyle to raise good shopping experience to individual buyers, together with the increase of capability to individual traders to help promote their brand and online store ," said Poignant.
Meanwhile, Shopee, a online shopping company under SEA Limited, which is registered in the New York stock market, and the owner of ROV online game, is engaged in a  neck-to-neck competition with Lazada in the Thailand's E-commerce market.
However, the total sales revenue of Shopee is still below Bt1 billion level as the company applied the loss-leader strategy to attract greater number of shoppers, which has reached about 31.19 million.    More than 95 per cent of shopping transactions at Shopee are made on smart phones. There are more than 100,000 online stores selling over 10 million products available on Shopee E-marketplace.
Maneerat Anulomsombat, CEO of SEA (Thailand), said that Shopee enjoyed strong growth last year, which is expected to continue this year. 

"We want Shopee to be among the top two players in Thailand's E-commerce market and to become an integrated online shopping application, focusing on good experience for both sellers and buyers who are not just making a shopping transaction, but participate in providing products and services along the way, together with e-payment service for customers," she said.
Maneerat said that based on the analysis by Google and Temasek, the e-commerce market in Southeast Asia region showed an average growth of 62 per cent over the past three years, creating more than $100 billion or about Bt3.1 trillion in total sales. Growth is expected to continue in the next the next five years.
"Currently, the proportion of e-commerce to total retail sales in Thailand stands at only 3-5 per cent. In other growth markets, such as the US, the proportion of e-commerce to total retail sales is between 15 per cent and 20 per cent. This means that the online shopping market in Thailand has much room for  growth," she said.
"We believe that Shopee now understands the shopping behaviour of Thai consumers. We would like both sellers and buyers at Shopee to have a 'sense of belonging', and to be part of our platform," said Maneerat.
 Maneerat said that one of the key strategies applied by Shopee is to speed up the expansion of its customers base, both vertically and horizontally.
"We will focus on 'integrated function' for our products and organisation, with the adding of lifestyle and entertainment dimensions. We will cater to our individual customers beyond an ordinary e-commerce platform, bringing fun activities and mini-games to attract new customers into our eco-system platform," she said.
Maneerat said that Shopee recorded 158.5 million gross orders in the third quarter of last year.
Shopee will focus on the recruitment of new offline merchants into our e-commerce system via 'Shopee University', a programme to develop the capabilities of  online stores as well as small-scale businesses, being held annually by Shopee in particular markets, such as  Vietnam, Indonesia, Singapore, and Thailand, she said.
"The key factor to success in  the competitive market is to increase our capability to serve any requirement and lifestyle of today's consumers at 360-degree. We want to become a 'multi-purposed platform' that offers diversified one-stop-shopping services in one application, such as e-marketplace, e-wallet, as well as food search and delivery," said Maneerat.

Battle of online shopping giants promises fun times for consumers

Consumers value transparency in online purchases, study finds