According to the “E-commerce Rewind Southeast Asia” by iPrice, Lazada commands the biggest market share of online traffic in 2018 at 27%, followed by Tokopedia at 17%, Shopee at 15% and Bukalapak at 12%.
Lazada Group’s chief marketing officer Mary Zhou said the company’s strength lies in looking beyond discounts and one-off deals to create a fun and interactive shopping experience. Last year, Lazada stepped up on gamification by pioneering the “Shake It” game on its app to reward shoppers for participation, encourage engagement with brands on its marketplace, and build a sense of community.
“It is about how best to engage tech-savvy consumers and serve their constantly evolving habits. Today, we also offer more social functionalities such as in-app live streaming for brands to communicate with their customers; a more personalised shopping experience using data and technology; and convenient access to different products through our image search feature, which 500,000 customers use everyday,” added Zhou.
However, the regional success of Tokopedia and Bukalapak were worth noting according to the report, as they are only in a single market, Indonesia, while Lazada and Shopee are in six and seven respectively. Meanwhile, Shopee’s fast growth stood out as it was only set up in 2015, three years after Alibaba-backed Lazada.
In fact, Tokopedia almost overtook Lazada in July and August 2018. iPrice also underscored that Tokopedia’s success had received further validation when it raised US$1.1 billion from investors in December 2018, becoming Indonesia’s most valuable startup at about US$7 billion. In light of the trend, Marketing looks behind the successes of e-commerce shops to uncover winning formulas, with Tokopedia and Shopee as case studies.
Tokopedia: Infrastructure as a service
At the heart of Tokopedia’s business ethos is their mission to offer infrastructure as a service to empower both online and offline businesses. To be a holistic solution provider, Tokopedia’s CEO office manager Priscilla Anais said the company will be investing in more easy-to-use technologies ranging from logistics and fulfilment to payments and financial services. Some of those are already on its Mitra Tokopedia app. Leading into its 10th year, Tokopedia currently enables five million merchants in Indonesia.
“We think of Tokopedia as a ‘magic Doraemon pocket’ – through which you can get anything you want, anywhere you are, at an instant, with only a gesture,” added Soh. “Imagine if we can give this to offline businesses – small kiosks, mom-and-pop stores, farmers, fishermen, local makers – and enable them to improve their margins, restock their inventories faster, get access to financial services and capital, and increase their distribution efficiency. We ultimately can help these businesses serve their customers better.”
To support Tokopedia’s evolution into infrastructure-as-a-service, the company has been rapidly growing its product and engineering capability. Soh told Marketing Interactive that the team is now over 3,300-man strong, with 25% of them being added only in the last seven months.
Shopee: Localised and mobile-first approach
Meanwhile, Shopee’s secret to success lies in localisation, providing a different app for each country. Shopee’s head of regional marketing Agatha Soh said, “This allows for a hyper-localised user experience while launching nimble marketing campaigns that connect deeply with the locals by targeting directly at cultural nuances. We also focus on hiring locally for our local teams because it is important that we build a strong team who understands the local market and audience.”
Soh added that Shopee invests in market research to understand what users’ motivations and preferences in the region to come up with multi-pronged marketing campaigns. They range from in-app activities to using local celebrity ambassadors that resonates with users.
However, Soh expects to see greater competition between existing players, with offline brands and retailers expanding their business online and forging more partnerships with online platforms. To stay ahead, she said that the Shopee will continue to focus on identifying and addressing unmet or under-served consumer needs. It will also be actively reviewing feedback to helps to improve to platform’s features and services. Additionally, there are plans for more in-app features and social elements to keep users engaged on the platform for longer periods.
Bukalapak did not respond to Marketing‘s queries.