Profit is not what e-commerce firms strive for at this time. They are spending big money to attract more customers and expand their market share through sale promotion programs and price discounts.

Profit is not what e-commerce want for now

Attracting sellers to marketplaces to diversify products and offering best prices for customers is a competition strategy followed by e-commerce firms.

Some analysts commented that those who spend the most will be the winners in the e-commerce battle.

Shopee began collecting fees from online sellers on April 1. Lazada has also applied the same policy, commencing April 15, 2019.

An online seller on Shopee said he is considering two options, either raising the selling prices, or leaving the marketplace for others where he can enjoy fee exemptions.

The moves by Shopee and Lazada indicate that competition among e-commerce firms to spend more money to get bigger market share is coming to an end.

Collecting fees is one of the measures to stop their losses.

However, one e-commerce firm is going against the current. While Shopee and Lazada collect fees from online sellers, Tiki has promised to exempt payment fees for online sellers for two years, beginning April 5, 2019.

Analysts’ views vary about the new face of the e-commerce market when the three big players ‘declared war’. Some of them think that online sellers will leave Shopee and Lazada for Tiki to be able to maintain competitive selling prices.

Meanwhile, others warned that Tiki’s product management may get worse if more online sellers appear. It is expected that Tiki may welcome millions of new sellers on its marketplace.

However, Tiki has denied the possible decrease in product quality management. A representative of TIki said that it will strictly follow the ‘managed marketplace’ model, i.e that it will maintain control over products to ensure genuine products and high quality, keep the marketplace operation (storage, packaging, delivery), and directly handle post-sales issues.

There have been some changes in the positions of big e-commerce firms in Vietnam.

A report from Statista released recently showed that Shopee has jumped to the No 1 position with 123.2 million visits, while Tiki has surpassed Lazada to hold the No 2 position in number of visits in the fourth quarter of 2018. The No 1 position belonged to Lazada in the past.

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Chi Mai