Shopee vs Lazada: it’s a pitched battle in Vietnam

By Vien Thong   May 19, 2019 | 05:31 pm PT
Shopee vs Lazada: it’s a pitched battle in Vietnam
Both Shopee and Lazada are using different strategies to attract customers in Vietnam. Photo by Reuters/Thomas White
Shopee and Lazada, locked in a race to be top dog in online retail, are pouring money and trying various strategies to attract customers.

In Q1 last year Lazada had the highest number of users per month among all online retailers in Vietnam. It had 42.4 million monthly active users, while Shopee had only 24.6 million, according to market research firm iPrice.

But Shopee’s numbers increased gradually, and by Q3 last year it finally surged past Lazada. In Q1 this year Shopee had 40.7 million users to just 29 million for Lazada.

Both have been receiving funding. In March this year Shopee’s parent company, Sea, raised $1.5 billion from a new share offering.

Forrest Li, Sea founder and CEO, said Shopee has climbed to the top in Southeast Asia in just three years, and Sea would continue to invest in the platform to maintain this position.

In March last year Chinese behemoth Alibaba poured another $2 billion in Lazada, bringing its total investment to $4 billion.

Both companies have been seeking to attract more customers in Vietnam. Shopee offers four-hour shipping and regular promotions.

Lazada has chosen a different path. Under its "shoppertainment" strategy, it uses celebrities and minigames to promote products, associating shopping with entertainment.

With technology from Alibaba, Lazada also allows users to search for a product with an image and claims to have 500,000 users a day using this feature in Southeast Asia.

Max Zahng, CEO of Lazada Vietnam, said the country remains an important market for the company in Southeast Asia with its large population and rapid economic growth.

Vietnam’s e-commerce market has seen robust growth in recent years, with sales rising by 30 percent last year to over $8 billion, according to the Ministry of Industry and Trade.

The internet economy accounted for 4 percent of GDP in terms of gross merchandise volume last year, the highest ratio in Southeast Asia, according to Google and Temasek.

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