Shopee present as 1 of TW’s leading EC platform
October 2015 was when Singaporean based e-commerce platform, Shopee, made its entrance into the Taiwan market, and quickly caused a storm in the market with its free transaction fee and free delivery strategy. This approach clearly worked, with Shopee growing tremendously in the two short years since it first entered Taiwan, and is now a presence that cannot be ignored by its fellow competitors, including Fubon Momo, Yahoo and PChome.
According to consumer’s shopping pattern…YES! Shopee is a threat!
According to the study of Kantar Worldpanel Taiwan, Shopee’s success is the result of both ‘gain’ and ‘growth’. Kantar Worldpanel Taiwan’s Account Manager, Ann Chang, points out that data has shown that 30% of Shopee’s growth can be attributed to gains from its fellow competitors, where consumers transferred their spending from other e-commerce platforms to Shopee instead, but the remaining 70% showcased Shopee’s success in expanding the e-commerce market, which came from consumers upping their existing spending online. In terms of threat to others, PChome was impacted by the most, followed by Yahoo, and Momo was relatively less affected.
Shopee’s here, beware PChome
While both Yahoo and PChome targets young consumers, things was never ugly between the two as their strength lies with different sectors. Yahoo is strong in personal care, while PChome place their focus on home care products (ie. tissue, detergent etc.) and baby goods, which is also Shopee’s strong territory, and coupled with their price competitiveness and free shipping strategy, it is no surprised why PChome took the hardest blow amid this e-commerce competition. With this precedent, if in the future Shopee decides to expand into personal care and even their consumer base to the older age groups, one can guess that the remaining two major competitors will definitely need to watch their back.
Easy shopping process opened the door of opportunity for Shopee
In the current Taiwan e-commerce market, the top 5 platforms share almost 50% of the total market’s sale, which Momo taking the lead, followed by Yahoo, and in just the two short years since its entry, Shopee was able to sit side-by-side with PChome in the 3rd place, surpassing Facebook which sits at 5th place.
Prior to Shopee’s entry, Facebook, with its strength in consumer appeal and interaction, combined with affordable pricing, was once the biggest e-commerce platform for baby goods. However, a major weakness in the shopping process design provided Shopee the opportunity to make a name for themselves, and soon shoppers are leaving comments on Facebook requesting for Shopee transaction, helping consolidate the e-commerce newbie’s first wave of shopper traffic flow.
‘Learn fast’ will be key to win sales
With the traffic flow secured, Shopee then further introduced the shopping mall concept to attract brand manufacturers to join the party, some are quick to embrace the Shopee opportunity, but there are still many that are contemplating whether they should join the game or not. Obviously there are several ways brand manufacturers can approach this matter, Kantar Worldpanel recommend that one should always consider the profile of target audience, as while it may be nice to have an extra selling point online, Shopee’s current buyer profile is concentrated on the 35 year-olds or younger, and ‘does this age group fit your target audience’ is something for the brand manufacturers to think about before take the leap with Shopee. Also, compare to the other platforms, Shopee buyers have a higher purchase frequency, but lower basket spending, and this is something to be taken into consideration when designing product portfolio or marketing promotions for this platform.
Lastly, knowing your customer is always vital to a brand’s sales and growth, and with e-commerce’s fast evolving nature, it is not only just about how well you learn, but also how ‘fast’, if one wish to stay competitive in the online market.