The Southeast Asian E-Commerce market has transformed completely in the past years and will continue to grow in the coming decade. Previously, Lazada used to dominate most of the E-Commerce markets, but we’ve seen more contenders popping up over the years.
One of the biggest and fastest growing marketplaces is undoubtedly Shopee. Selling here is comparably easy and there are a number of benefits that follow.
Therefore, I’ve written this article where you’ll learn the following:
- What is Shopee?
- Shopee market share
- In which countries is Shopee available?
- Why should I sell on Shopee?
- Cash on delivery (COD) and other payment options
- Shopee seller fees
- Order fulfillment options
What is Shopee?
Shopee was founded in Singapore as late as 2015 and has grown very fast since. Currently, it’s one of the biggest E-Commerce marketplaces in Southeast Asia and fights head to head with Lazada to become Southeast Asia’s number one E-Commerce website.
In fact, it’s even surpassed Lazada in terms of active users and mobile app downloads in some Southeast Asian countries.
That’s not the easiest task on hand as Lazada is owned by Alibaba Group, backed by billions of dollars and started out several years earlier.
By excluding commissions and listing fees towards seller, Shopee managed to build one of the regions biggest brand names. Yet, this will inevitably change in the future and for Shopee to bring in more revenue.
Shopee started as a C2C website
Worth mentioning is that Shopee started as a C2C website and later evolved to become a hybrid between C2C and B2C. It’s an asset-light website by comparison, and as mentioned, they don’t charge any commissions to sellers.
Another major difference between Shopee and Lazada is that its mother company, Sea Group, is headquartered in Singapore. Lazada, on the other hand, is owned by Alibaba Group, which is headquartered in China.
As such, you’ll notice that Lazada is more China focused in the sense that a great majority of products are distributed directly from sellers within (Southern) China.
Still, Tencent, which is one of the biggest companies in China and has 20% of the shares in Jingdong (JD), also holds almost 40% of the shares in Shopee.
It’s evident that Alibaba and Tencent are not only waging an E-Commerce war within the borders of China, but do their utmost to grasp as many market shares in Southeast Asia as possible.
In which countries is Shopee available?
Shopee started out in a couple of countries, but is now available in most of the ASEAN countries, Taiwan and also in Korea:
- Singapore (Shopee.sg)
- Malaysia (Shopee.com.my)
- Thailand (Shopee.co.th)
- Vietnam (Shopee.vn)
- Indonesia (Shopee.co.id)
- Philippines (Shopee.ph)
- Taiwan (Shopee.tw)
- Korea (shopee.kr)
Selling cross-border on Shopee will give you access to some of the most developed but also some of the fastest growing countries in Asia.
How big is Shopee in Asia?
As mentioned, Lazada used to dominate the E-Commerce markets in Southeast Asia some years back, but there’s been major changes since. A number of new platforms have popped up and in the following platforms had the most visits by countries in Q1 2019:
- 11 Street
Why should I sell on Shopee?
Shopee is one of the biggest E-Commerce platforms in Southeast Asia, which is in turn one of the fastest growing markets in the world. The website has much financial backing and predicted to remain a top player in the coming years.
I also want to mention that selling on Shopee doesn’t mean that you can’t sell on Lazada, or any other websites for that matter. But it can make sense to start with one website at a time, in a controlled manner.
So what are the benefits of selling on Shopee?
First of all, it’s unique in the sense that sellers don’t pay any commissions to the platform, which is kind of amazing.
Compared that to Lazada, where you need to pay a commission of 2% – 8% for each sale made. In addition, sellers and buyers can enjoy free shipping, where the regulations differ by countries.
So does this mean that Shopee doesn’t claim any fees at all? No.
Shopee earns money from paid advertising that’s available among sellers on the website. In addition, they’ve started to charge a transaction fee which is generally 1.5%.
Yet this is minuscule compared to the fees charged on Lazada and other platforms.
How can I get paid on Shopee?
The payment options differ by countries. For example, buyers in Singapore and Thailand can only pay by debit card, credit card or by bank transfer. Cash on Delivery isn’t available in any of these countries.
In the Philippines and Taiwan, on the other hand, customers have the option to choose between the following payment options:
- Online banking transfer
- ATM transfer
- Credit card payment
- Debit card payment
- Over-the-counter payments
- Cash on Delivery (COD)
So how can sellers move funds out of these countries?
Cross-border sellers can withdraw money in two ways: by bank transfer or by integrating the Shopee store with Payoneer, which I’ve described in my separate article about payment methods on Lazada.
Payments are generally made bi-weekly from Shopee to Payoneer and in the beginning and the middle of each month.
How can I register with Payoneer on Shopee?
It’s easy to register with Payoneer and the steps are as follows:
- Log in to your Shopee store and click on “My Wallet”
- Click on “Register” and visit Payoneer’s website
- Fill in the Registration information
- Select “I have Payoneer”, if you have an existing account
- Check that your Shopee store shows Payoneer as “Activated”
- Log in to Payoneer and input your bank account details
Managing fulfillment and shipping on Shopee
Selling cross-border across continents requires that you have a robust fulfillment and shipping solution in place. When selling on Shopee, there are two different solutions available:
- Using Shopee’s own service – Fulfillment By Shopee (FBS)
- Work with a 3rd party fulfillment center
a. Fulfillment By Shopee
Fulfilled By Shopee (FBS) is only available to top brands, distributors and key sellers with high sales volumes and lack fulfillment capabilities. As such, not everyone can sign up for the program and you can be accepted by invitation only.
Using FBS is a preferred choice among many sellers as Shopee takes care of everything from order inbound, quality inspection, storage, pick & pack, shipping, returns and refunds.
Yet due to the mentioned restrictions, you often need to manage the fulfillment and shipping on your own, at least at the start.
This is different to Lazada, where you’re almost forced to use their own in-house fulfillment model nowadays, Fulfillment By Lazada (FBL).
b. ASEAN Fulfillment
If you can’t opt-on for Shopee’s own fulfillment services, you can manage your fulfillment operations with the help of a 3rd party. Easyship is one example, an established fulfillment company located in Hong Kong.
There are plenty of established fulfillment centers around Southeast Asia that can help you to successfully sell your products on various marketplaces, including Shopee.
Below I’ve listed some frequently asked questions and my replies. If you have any other questions, feel free to send us an email or drop a comment below!
How does Shopee make money?
As mentioned above, Shopee makes revenues from sellers advertising and transaction fees.
Is it free to sell on Shopee?
Selling on Shopee is free, unless you want to be listed on Shopee Mall. Then you need to pay a USD 315 fee to register your business with the ACRA (Accounting and Corporate Regulatory Authority) in Singapore.
How do you become a preferred seller on Shopee?
Sellers who sell genuine quality products with competitive prices and have great seller ratings and customer satisfaction can be become Preferred Sellers only.
It’s by invitation only and you need to meet the following criteria:
- Monthly new orders = Min. 75
- Unique buyers per month = Min. 35
- Chat response rate (cumulative) = Min. 70%
- Shop rating (cumulative) = Min. 4.6
- Penalty points = 0 in the current quarter
- Products = 100% authentic, no counterfeit products
- Ready stock = 95%
On top of the above mentioned requirements, you shall comply with Shopee’s requirements and follow the guidelines stipulated. Keep in mind that the Shopee teams select Preferred Sellers and make sure that you follow the guidelines strictly.
Can I dropship on Shopee?
Officially, Shopee doesn’t support or encourage drop shipping.
Still, you’re capable to dropship products with the help of different service providers.
Is Lazada and Shopee the same company?
No, Lazada is owned by Alibaba Group, which is headquartered in Hangzhou, China. Shopee, on the other hand, is owned by Sea Group, which is headquartered in Singapore.
Is Shopee C2C or B2C?
Shopee is a hybrid of C2C and B2C. Previously, it was only used for C2C but has evolved and become a B2C platform as well.
How do I get free shipping on Shopee?
You’re able to opt-in for free shipping by simply having a valid Pickup Address. You’ll then receive a notification in the application within 7 days showing how you can activate Free Shipping.
The clients then need to:
- Click on Free Shipping. Tap on ‘Get Voucher’ to get Free Shipping Vouchers
- Tap on ‘View Voucher’ to go to ‘My Vouchers’ where you can view the claimed Free Shipping Vouchers
- Under ‘My Vouchers’ you can view all your saved free shipping vouchers
What are the prohibited products on Shopee?
It differs, depending on in which country you sell the products.
Products that are in accordance with a country’s laws and governmental organizations can be sold. Generally, you cannot sell any of the following products in any of the countries:
- Animal and wildlife products (including, without limitation, wild animals)
- Artifacts and antiquities
- Used cosmetics
- Counterfeit currency and stamps
- Credit and debit cards
- Currency or credits including, without limitation, digital currency or credits, and stored value cards
- Drugs, medicines (prescribed or non-prescribed) and drug-like substances
- Embargoed goods
- Firearms, weapons, replicas, and stun guns, and more
- Alcohol [Valid license to be submitted and approved by Shopee]
I recommend you to visit this article which explains more about the prohibited products on Shopee Singapore.