E-commerce is disrupting trade in ways like no other. From the popularity of e-commerce platforms led by Amazon to the risky yet calculated bets of companies like Facebook on online marketplaces, e-commerce has single-handedly altered the game in cross-border trade.
Demand for e-commerce became even more pronounced at the height of the pandemic when many businesses were forced to shutter their physical stores and consumers cooped up in their homes to dodge the virus. In Singapore, the e-commerce market is projected to expand at a compound annual growth rate of 16.2% to S$14.2 billion by 2025 from $7.8 billion in 2021, according to analytics firm GlobalData.
This growth is supported by government incentives in one of the fastest-growing e-commerce markets across Southeast Asia. The Singapore government rolled out its E-Commerce Booster Package to encourage small businesses to diversify their operations and minimise the costs of going online. Qualified retailers were given subsidies worth up to 80% (maximum of S$8,000) of the costs of shifting to participating e-commerce marketplaces such as Shopee, Zalora, and Lazada.
If you are a business that has yet to embrace the digital economy and wants to have your share of the e-commerce pie, this guide will help you bring your goods to one of the leading online selling platforms in Singapore–Lazada.
Owned by e-commerce behemoth Alibaba, Lazada is one of Southeast Asia's largest online shopping sites. According to online shopping aggregator iPrice, Lazada is the second most-visited e-commerce site in the city-state, racking up 8.65 million monthly website visits. It also placed second in mobile app ranking, with its rival Shopee at the top.
Lazada primarily serves the Southeast Asian region, particularly Vietnam, Malaysia, Indonesia, Thailand, and the Philippines, using a hybrid model of business-to-business (B2B) and consumer to consumer (C2C). While the Singapore-based selling site has a long way to go to compete globally with Amazon, which is considered the king in e-commerce, its influence couldn't be understated. We list down the reasons why you should start a business in Lazada.
Creating an e-commerce site for your bricks-and-mortar business will cost money as you have to hire someone to build a website and maintain it. However, putting up your products on an e-commerce platform like Lazada comes at zero cost. You do not have to worry about building a site from scratch and going through the muddy process of paying someone to develop the site for you. Creating a seller account with Lazada is free. Microsellers can sign up and list their items within minutes.
Another benefit of Lazada, if you are a small business owner, is that there is no minimum number of products required. You can start by selling just one item with a few stocks and slowly add as your business expands.
A Lazada store lets you access millions of users on just a single platform. Unlike a physical store that only relies on foot traffic within a specific area, a Lazada store unlocks potential customers regardless of geographical constraints. Lazada's overall traffic has consistently increased over the recent years, with its active users a year at 110 million in 2020.
In the same year, about 40 million users in Southeast Asia joined the internet, meaning the total number of web users in the region now accounts for 70% of its overall population. This is expected to grow even bigger as more people begin to rely on the web for their day-to-day needs in a post-pandemic world.
Lazada has a dedicated seller centre to help stores facilitate smooth transactions. You can find answers to frequently asked questions, tips on maximising sales and improving product listings, and important policies that you have to comply with to avoid penalties.
Lazada also provides marketing insights into your store's performance to help you improve the strategies of your campaigns. It will let you in on which products have received the most views, as well as your best-selling items. Having these data will enable you to focus more on valuable products and sustain the demand from your customers.
Lazada also rewards its best-performing sellers through the Lazada Seller Ambassador Program. Their recipients are given a swathe of benefits such as access to product testing and early adopter scheme, opportunities for case study videos, a special LazSA badge, access to training certifications via the Lazada community, and an invitation to attend a trip to the Alibaba Campus.
Lazada has tied up with LEL Express (LEX) for its internal logistics requirements. It also has third-party partners for the delivery of parcels to different regions. Sellers can choose to either drop off their parcels at a designated Lazada logistics partner's branch or have the said parcels picked up.
Having centralised logistics is one reason why Lazada offers a cheaper shipping cost than other e-commerce platforms, which is a great incentive for your prospective buyers. Lazada has also made it easy for your buyers to track their orders through an in-app feature.
Small sellers who do not have the capital to invest in brand marketing can greatly benefit from Lazada's campaign tools. The e-commerce giant regularly puts up various campaigns such as free shipping, discount vouchers, and flash sale to attract customers. It also conducts huge sale events like the infamous 11.11 in which big and small brands participate. Similar to Amazon and Shopee, Lazada offers an affiliate program to incentivise customers who recommend products from the site and allow sellers to customise bundles to boost sales.
These tools are accessible to sellers free of charge. However, there are also paid marketing strategies that you can use to gain an edge over your competitors. For example, you can sponsor display ads to reach more buyers or sponsor search ads to boost your products' visibility.
Lazada's website and mobile app interface are user-friendly. You do not have to be a tech expert to be able to navigate its features. There are also tutorials that you can refer to when there are updates to the app. In case you get lost, you can always tap the tech support available 24/7 for your queries.
Go to the Lazada Seller Centre and click "Create a new account." You will see three account options:
For this guide, we will choose Lazada Seller as the default option. You will be redirected to a page where you will provide information such as location and mobile number. An OTP will be sent to your registered mobile number. After keying in the OTP, complete the sign-up sheet with the rest of the required information. Then, click the Sign-up button.
Next, click "Upload SKU" to start listing your products. You have to identify the product name and category. This is very important as this will determine how your customers can find your store. A list of recommendations will pop out based on the keywords in your product name.
You can either choose from the existing list for the brand name or click "Create Brand" if the label has not been added yet.
For example, if you are selling a dress, you can supply specific features such as clothing material, collar type, dress length and type, and so on). While it is not mandatory, supplying these details will strengthen your product's searchability.
Then, fill out the rest of the fields such as video URL, return policy, package dimension, warranty details, and "What's in the Box," among others. "What's in the box" should contain information about what the customers can expect to find in the package upon receiving them. Use this format when filling out this field: 1 x (name of the item).
Once you have selected the variation, upload the images from your computer or phone's gallery, complete other details such as price and quantity, then click "Save."
Open the downloaded template, fill out the required fields, and hit save. Go back to the Import page, click "Upload Files", and choose the accomplished template. The status of your batch upload will be displayed on the same page. If there are problems, click the "Download Error Report" to resolve the issues.
The last step is connecting your Lazada account to your bank account, where you want to receive all proceeds from your sales. To do this, you must activate your Seller Wallet by going to the Seller Centre and providing the required documents.
This is a new feature introduced in 2021 to enable sellers to get an overview of their sales revenue and transfer their sales to their linked bank account. Keep in mind that corporate sellers and individual sellers have different requirements. Alipay SG, Lazada's partner, verified these requirements in transferring your revenue to your bank account.
For corporate sellers, the following details are needed:
For individual sellers, here are the requirements:
Once you are done with these three steps, you are now ready to sell your items on Lazada!
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Lazada regularly monitors sellers' accounts to ensure that they comply with its rules. One of its key priorities is policing the items sold on its site and penalising sellers who violate its prohibited products policy. Lazada.sg has an exhaustive list of items that are banned from its site, but as an overview, here are some of them:
A product that has been flagged will be taken down immediately, while the seller will incur non-compliance points. These points are dependent on what product category the seller violated and will determine the severity of the punishment. Penalties range from locking the product involved and restricting the seller's account to withholding the seller's sales and account deactivation.
Additionally, Lazada flags products with duplicate postings from the same seller. If your product comes in different sizes or colours, create a variation in the same listing. This makes it easy for customers to have a fair comparison between product postings and provide a smooth online shopping experience. Violation of this policy can lead to non-compliance points and the product being locked in your store.
Like other e-commerce platforms, Lazada earns a commission for every product that exchanged hands on its platform. These fees depend on which market in the ASEAN region your business is operating.
For Lazada sellers in Singapore, there are three types of fees that you should know:
To illustrate, here's a sample computation using a product worth S$100.
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S$100 (product price) - S$5 (discount voucher) = S$95 S$95 (discounted product + S$1.49 shipping fee = S$96.49 S$96.49 (discounted product and shipping fee) x 2% (payment fee) = S$1.93 before GST or S$2.06 after GST< |
In the example above, the single transaction will incur a S$2.06 seller fee after GST, to be deducted from the seller's wallet once the purchase is completed.
Note that the 2% seller fee will still apply to the final purchase amount even if the buyer opted for a collection point delivery.
All orders handled via 3PL have a fixed shipping fee of S$2.49, inclusive of GST, regardless of weight and the product's shipping tiers. Note that the maximum weight for 3PL is 30 kilograms. If the item exceeds this threshold, delivery must be done by the seller using their own fleet or transport.
Lazada also offers other shipping options such as Fulfilment by Lazada and Instant Delivery by Grab, both of which are available by invitation only. The latter's parcel weight is only up to 4 kilograms.
Like having a physical outlet, running a Lazada store involves data-backed strategies and a lot of patience. Unless you are offering an extremely specialised product, chances are you would enter a crowded race and face tight competition among sellers who want their share of Lazada's millions of monthly traffic.
So, how do you make your store stand out in a sea of sellers offering nearly identical products? Thankfully, you can face this fierce competition by following these tried-and-tested basic principles.
Competition is an inevitable part of running a business and drives owners to innovate to give their customers the best experience possible. The first step to developing a strategy and gaining your competitive advantage is conducting research. Knowing who your competitors are and what they are up to will help you identify marketing tactics and strategies to boost your sales.
For Lazada sellers, part of competitor research is analysing your rivals' keywords in the product title and product description. Knowing these will help you tweak your own copy to boost visibility once a user searches for a product.
You can also observe your competitors' pricing strategy. Are their products cheaper than yours? Perhaps, you need to create bundles and vouchers to attract customers. The key here is to have a healthy competition that will ultimately benefit the customers by having different product choices.
The limitations of e-commerce businesses like Lazada or Taobao make it extra challenging to showcase the features of your product and convince buyers to buy them. Hence, it is important to upload high-quality images so your buyers can know what to expect once their order arrives. Images are a huge selling factor in an online business; they can make or break a sale.
Aside from ensuring that your images are clear and in high resolution, you should also take photos from different angles. Close-up pictures help buyers understand what the product would look like even if they are not familiar with the materials mentioned in the product description.
Apart from the main product images, it will also help to upload "lifestyle images," which show how the product is used in a real-life setting. This is a great way to connect to your buyers emotionally and let them know how your products look in an actual scenario.
Knowing the exact measurements is also a pain point in online shopping. To ease your buyers' burden, upload infographics or illustrations to help your prospective clients have an accurate idea of your product's measurements.
Identify whether you're using U.K., EU, or U.S. sizes for garments and apparel. The key is to be precise and accurate and think about what the buyer might want to know about the items you are selling.
Take advantage of Lazada's marketing tools to drive traffic toward your store. Product promotions like buy-one-take-one bundles, shipping vouchers, and discounts for a minimum amount spent are tried and tested ways to attract customers. If you are launching a product, create special coupons to add to your campaign to boost sales and encourage feedback from your customers. Having credible feedback is a great way to establish trust in your brand.
Now that you know the basics to starting an online business on Lazada, it's important to understand that most of what goes on in business happens outside the platform such as, coordinating with suppliers, filing your taxes and managing your business expenses. With all of these things in mind, you must take advantage of the many automation tools to help scale your business faster and avoid stretching yourself too thin.
Spenmo is a payments automation software that allows you to make seamless and timely payments to your suppliers while ensuring proper cash flow through its spend tracking feature. They also offer the cheapest overseas transfer rates with 0% FX markup, which is especially useful for importing your products into Singapore. Talk to us about payments automation, today!