Shopee pilots new policy extending customers’ order cancelation window

By Vien Thong   July 4, 2024 | 08:53 pm PT
Shopee pilots new policy extending customers’ order cancelation window
A signage of Shopee, the e-commerce arm of Sea Ltd, is pictured at its office in Singapore, March 5, 2021. Photo by Reuters/Edgar Su
Shopee is testing a new policy that allows customers to cancel orders later in the shipping process as part of efforts to win business, placing pressure on sellers.

After orders are placed on the platform, sellers pack their goods and send them to Shopee’s warehouses to be delivered to customers.

The new policy, introduced late last month, allows buyers to cancel orders even when the goods are en route to warehouses. Until now cancelations were only allowed until sellers dispatched items to warehouses.

The policy is being tested on selected sellers in HCMC and Hanoi who use Shopee’s standard shipping service, SPX Express.

The change allows the company to go one up on its rivals like Lazada and TikTok Shop in terms of user-friendliness since they only allow cancelations until the dispatch phase.

Buyers window for order cancellation on Shopee, Lazada, and TikTok Shop.. Chart by VnExpress/Vien Thong

Buyers' window for order cancellation on Shopee, Lazada, and TikTok Shop.. Chart by VnExpress/Vien Thong

But the change has met with mixed reactions. Buyers are, of course, pleased as they now have more agency over their shopping experience.

Thanh Tan, 36, who regularly shops online, said it saves him the trouble of receiving goods and then returning them.

"I find it easier to cancel while the order is still in transit. Sometimes I choose the wrong products, find a better seller, get the item through other means, or regret making the purchase."

But many sellers are concerned about the added pressure. Huyen Tran, a seller of household goods -- who has not had any orders canceled yet -- said vendors might need to invest more in inventory management.

"I understand that platforms are trying to attract and retain buyers, but these policy changes place pressure on us. "Returned or canceled orders can get lost if sellers do not have an efficient system."

Do Quang Huy, a university lecturer in e-commerce, agreed there might be pitfalls. When orders are canceled during transit, the goods might not be returned immediately to sellers with shippers waiting until there is a substantial volume to do so, he said.

This increases the risk of goods getting lost or being incorrectly returned, he said. "Therefore, sellers need additional management to check and handle such cases."

Responding to a VnExpress query, Shopee said the policy not only aims to improve the user experience but also benefits sellers.

It reduces the waiting period for returns to sellers as shipping is halted earlier, it explained. It also reduces the likelihood of returns and refunds after delivery, saving money for sellers, who have to bear the shipping costs in these cases, it said.

Sellers’ performance ratings are not affected by orders canceled during the extended window period, and they are not required to cover shipping costs either, it said.

"If a cancelation request is accepted but the item is still delivered to the buyer, Shopee will compensate the seller."

According to the first quarter report from e-commerce intelligence firm YouNet ECI, Shopee was the top e-commerce platform in Vietnam with a 67.9% market share.

But TikTok Shop is emerging as a strong contender thanks to its expertise in livestreaming. Its market share rose by 6.3 percentage points from the end of 2023 to 23.2% in the first quarter, the report said.

To maintain its lead, Shopee has been consistently adding policies to attract and retain customers, often at the cost of sellers.

In March it updated its refund policy, extending the return period for buyers from three to seven days to 15. Many sellers have complained that buyers return products after using.

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