Shopee-pass - Grade: B PDF

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Executive Summary The report focuses on analysis the marketing strategy of Shopee and its competitor. Generally, the report has two main parts, first part mention about the Marketing Mix of Shopee and Lazada, the biggest competitor of Shopee and how it affected on Shopee objectives. The second part ...

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Executive Summary The report focuses on analysis the marketing strategy of Shopee and its competitor. Generally, the report has two main parts, first part mention about the Marketing Mix of Shopee and Lazada, the biggest competitor of Shopee and how it affected on Shopee objectives. The second part analyses and evaluates a basic marketing plan of Shopee then find a better way to Shopee reach their new objectives.

Task 1 - Compare ways in which organizations use elements of the marketing mix (7Ps) to achieve overall business objectives. a. The 7Ps marketing mix: 1. Product: Similarity Both lazada and shopee are e-commerce trading platform and the product is to provide services to customers. It can be said that shopee and lazada is the market where the transaction between the seller and the buyer.

Different Although they both have the same products on the trading flatform but each company has its own strengths in certain categories.

Shopee Focusing on the segment of customers

Lazada However, lazada has a separate subsidiary

preferred personal care activities such as

specializing in the transportation of goods

cosmetics and fashion, Shopee is better

for customers is "Lazada express".

than Lazada. With the selection in the

Lazada is a subsidiary of Alibaba, with

business direction of the image, for the

huge support from big players such as

beauty needs at the individual level,

Alibaba, Huawei and Tencent. Lazada

buying at Shopee will make more benefits

have diversified and marginally in

for buyer feel easier. Shopee is a good

technology devices more than Shopee. As

place quite suitable for those who like

nowhere can compete with China about

beauty.

develops its diversification of electronic products as well as catching up with its

machinery.

2. Price: Both companies apply Competitive based pricing. “Competitive pricing is the method of strategic price points to take the best take advantage of a product or service that the company has more competitiveness than competition. This is usually used when both companies have the same item.”( Investopedia, n.d). The comparison below gives a better understanding of this method in the two companies.

Comparing the price of beauty product between Lazada and shopee

Comparing the price of technology product between Lazada and shopee

3. Place: Shopee Lazada Lazada and Shopee are the huge online shopping platforms in Viet Nam. Both companies have released applications for smartphone and tablet, and created the websites on PC browser. Those e-commerce channels are brought the convenience to customers, so they can access and purchase anytime, anywhere. Shopee application is marginally better Lazada is online shopping application than Lazada, because it has friendly has the most installed time, about 50 features operation, and flexibility is the million downloads. strongest point that hardly any other The number of followers on Facebook of shopping application can pass through.

Lazada is also a lot more than Shopee (23 million compared with 9.4 million followed).

4. Promotion: Shopee

Lazada

Shopee

invested

heavily

in

media Lazada an older brand in Vietnam

channels such as Facebook and Google. Shopee. Like Shopee, Lazada appeared In addition Affiliate Marketing is the in almost all media from television, way to make the Shopee growth of online, print, keyword search on Google, customers become more regular and not banner ads on websites, social networks, dignified. This will help the marketing to telephone messages... partner

of

Shopee

earn

more Lazada also to the products customers

commission, also help Shopee save are looking always immediately visible marketing costs, raise the value and in their eyes with images and compelling become a potential market for all message. Many products that Lazada partners.

sold flashsale only a short time, so they

Shopee marketing activities take place display information at the right time to anywhere and any time of the year. achieve high efficiency. Also Lazada Shopee appear on advertises in public also occasions mega shopping like transports, on social networking sites "Cách mạng mua sắm" or round of and on TV every day. With the "Black

Friday"

every

year

frequency appears extremely much, extremely massive promotion. Shopee become a brand that every time people

need

shopping,

they

will

remember it for a long time. This customer approach extremely expensive, but it will increase the number of customers incredibly more.

with

5. People: Shopee Lazada The common point between Shopee and Lazada is they have a customer care department extremely well. Staff at the two companies are extremely enthusiastic, thoughtful and behave extremely subtly. Customer Care department of Shopee to Lazada suspected in recent years for its work overload, because they not only reputation and product quality, however advise, but also to consider to agree the they always handle the order extremely order to return. This delivery policy quickly. Their staff don't have to handle largely influenced Shopee employees, orders, they have the private system, but it contributed to the success of this

which can handle more than 100,000

company. Furthermore, employees must orders in 1 minute. always be updated with the new shopping

trend,

check

the

orders

carefully. With the orders delivered via Shopee, you will be assured than when online sellers stand to arrange for deliveries. The seller has to work with their own delivery, so it will avoid cases of mistaken delivery, manage orders better quality.

6. Physical Evidence: Shopee

Lazada

- Focuses on visual of customers by develop their interface. Because both of them are run on website and smart phone application so how their first look when customers turn on their website or application is really important. - Delivery service is also the way to impress the consumers. - Delivery products by using shipping - Besides using delivery service of other service of others partner such as Viettel

companies, LazadaVN has their own

Post, Vietnam Post, GHN Express.

delivery company (LazadaExpress) which

- Website and application theme are

will improve their brand value and

using Vermillion (Orange + Red) as the impress consumers with a service from A main tone which is a strong color that to Z. excite people and make them feel - The main color tone they are using is energetic when look at the theme.

Blue which completely conflict with Shopee and this blue stand for peaceful, safe, making people feel comfortable and trust.

7. Process:

Figure 1.1: Operation process of Shopee * Shopee: Shopee has created an environment for sellers and buyers, every seller and buyer are their customers. In general, the operation of Shopee is a process of products moving from sellers to buyers based on Shopee environment. Particularly, to post products, sellers must do several steps. Step 1: Seller need to sign in the Seller Channel. Step 2: They will provide information of their products to Shopee Center. Step 3: Products will be checked by Shopee And if it fits all requirements, it is allowed to post on Seller’s store. If it does not, it will be canceled. When products posted, buyers can see and check its information after they sign in Buyer Channel then they can communicate with sellers to make an order. The order is sent to Shopee for censorship before the sellers are received then the seller can choose the way to delivery their products under supporting of Shopee. This process is flexible for consumers; particularly the price of products can be changed easily by a communication between seller and buyer. Furthermore, the sellers are also allowed to decide the way to deliver their products. However, this process will get struggle in managing the threat because they open the market so freely that mean a lot of scammers can easily join the market.

* Lazada:

Figure 1.2: Operation process of Lazada With Lazada Vietnam, sellers are more selected than Shopee. To become a seller of Lazada, people must provide individual information to ensure they are not scammer. After that, they must finish a training course of selling on Lazada and then they are allowed to post their products. Buyers after sign in can check information of products and confirm it if they buy, then they need provide some information for delivery. After making the order, orders will be sent to Lazada Center and Lazada will decide how they deliver the products for buyers. The process of Lazada ensures the quality of product for consumers. By managing information of stores and its owner, Lazada can avoid scammers and reduce the risk for buyers when they are shopping. However, a complicated way to become seller on Lazada can be a barrier for many sellers.

b. How do Company A and B achieve their overall business objectives by marketing mix strategy? In this part, you should talk about the benefits/ results that Marketing Mix strategies have helped both companies to achieve.

Shopee and Lazada are the major online shopping channels in Vietnam recently. Both companies work in the same field and serving the same service so that it is understandable when their objective are quite similar, which is having the desire to increase the market share as much as possible.

To be more specific, Lazada sets an objective of 80% of online shoppers using Lazada's services by 2020. According to Alexandre Dardy – CEO of Lazada Vietnam, the company expects the growth in 2020 reaching $ 100 million return on investment and in partnership with 100,000 merchants with all brands (Báo Thanh Niên, 2017). Launching in November 2015, Shopee now has more than 3 million brands and offered more than 40 million products in seven countries including Taiwan, Indonesia, Malaysia, the Philippines, Thailand and Vietnam. In Vietnam, based on the successful of previous years, Shopee supposes to reach double digit growth of market share in following years (T, 2018).

Having a look at what Shopee and Lazada Viet Nam have achieved during operating. In terms of Shopee, since they launched in Vietnam, the company has over 5 million installments of Mobile Shopee applications and increased the product by more than 133% to reached 4 million. In the previous year, Shopee's total merchandise turnover exceeded rapidly to $3 billion and over 40 million applications installed (T, 2018). In terms of Lazada, this company has more than 1,000 employees and developed 400,000 different products in 13 categories, especially in electronic devices. With many positive changes to adapt Vietnamese market demand, the customer’s satisfaction index went up to 62% in December 2015 and Lazada was listed in the Top 10 typical e-commerce businesses in

2015 organized by the Department of Industry and Commerce of Vietnam (VnExpress, 2016). By the provided data and figure, Shopee and Lazada have been going the right path in operating the business in Vietnam effectively, and those achievements could also be the background to accomplish objectives successfully in upcoming years.

One of the most commendable reasons for the speedy growth of both businesses is because Vietnamese market is extremely potential. The most significant advantage of Vietnam is the large number of young people, who has well – educated in Internet proficiency. The second advantage is the market size. Vietnamese population is approximately 95 million, compared to Singapore, where the market size is only 5 million, Malaysia is 30 million and Thailand is 60 million, according to Pine Kyaw Director of Shopee Vietnam. It can be seen clearly that with Viet Nam market advantages, 7Ps mix strategy would perform effectively and the trading will be more potential (T, 2018).

However, behind those succeeds of both businesses, there is a negative aspect. According to the financial report of Recess Joint Stock Company, Lazada in Vietnam underwent a loss of VND 977 billion in 2015 and VND 1,019 billion in 2016. Shoppe also suffered the loss in 2016 with more than 160 billion VND and it increased to 600 billion VND in 2017 (Son, 2018).

Indeed, the losses were recognized because of the trust of customers in online shopping when Vietnamese people are so familiar with offline shopping (Tri, 2018). In order to solve this problem, both companies try to give customers more incentives so that they can experience, after that, the company would gradually gain customers’ trust and willing to

come back; for example, applying ship COD (Cash On Delivery) as mentioned in Pricing. Nonetheless, the losses of both companies are just in the short-run evaluation, they definitely realize how profitable of Vietnamese market is in the long run so that they are trying to change Vietnamese’s buying habit to be more familiar with online shopping.

All in all, with the 7Ps mix strategy and the understanding of Vietnamese market, Lazada and Shopee could achieve objectives easily in the future.

Task 2 - Develop and evaluate a basic marketing plan 1. Overview: Shopee is a Singapore-based e-commerce platform owned by SEA (formerly Garena). The app had 25,000,000 downloads in the first year after launching. Shopee is available in 7 markets: Singapore; Malaysia; Thailand; Taiwan; Indonesia; Vietnam, and Philippines with disntinct features for each market. Shopee launched in Vietnam on 8/8/2016 with an impressive 20 million downloads, 250,000 orders/day and achieved $1,300,000 in mechandise value/ year (GMV). Shopee has become the fastest rising commercial flatform in the Asian. Their mission is to create a better life for the consumers and small businesses of Asia with their technology. They vision is to become the largest in the field of e-commerce and m-commerce (mobile shopping) in Vietnam. Currently marketing

2. Market research “In 2018, Shopee has spectacularly kicked out Lazada, took the top position in the list of the top 50 Vietnam’s e-commerce platform” (ictnews, 2018). With the leading position and the increasing number of consumers, it has created tremendous opportunities for Shopee in the market. Shopee nationwide delivery service targets young customers, middle income and upper. On the market today there are two big rivals Tiki and Lazada, which are subsidiaries of China large corporations and have large capital investment. Therefore, the competition for market share in the Vietnam market is always intense. Recently, the Shopee has a very successful advertising plan called "11.11 Shopee Super Sale". “The event attracted more than 42 million visitors and orders in many products line. Surprisingly, every minute the number of products sold reached over 58,000 products.“ (Van Anh, 2018) 3. SWOT Internal environment Strengths Weakness 1. The first advantage is the variety of 1. Its strategy is to call as many sellers items.

as possible with attractive discounts to attract

2. Products sold at a competitive price and

customers,

which

leads

to

counterfeits and poor quality goods. As a

cheap. Also, there are many great deals result, customers no longer believe in the and half price reduction products.

product quality.

3. Strategic support for payment and

2. Shipping fee is very flexible: when

shipping. For example, products over buy small value products, there are cases 200,000 VND are delivered free.

of shipping fees being more expensive than the product.

4. Successful marketing strategy. Shopee is now remembered with big deals, 3. Shopee often sends the wrong color, discounts and free ship items. The size. When delivered, clients were never widespread advertising video with the tested. If customers do not like it, appearance of singer Bao Anh and football customers have to send email and wait player Bui Tien Dung has made a deep for respond from Shopee 3-4 days to impression on customers.

return products.

External environment Opportunities Threat 1. According to Vietnamnet, “The amount 1. Competitors also have the same items of Vietnamese internet users has achieved as shopee's. 50 million, equivalent to 54% of the population, after 20 years since Vietnam 2. As the Asian market is a big piece of joined

into

the

interconnected cake that attracts many companies, it is

network.”(Nhan Dan, 2017)

obvious that shopee is facing many big

As a result, the number of users of the

competitors like Tiki, Lazada, Adayroi !.

app also increased significantly. 3. “Shopee must accept to invest heavily 2. Vietnam has young population who in marketing, discount activities, suffered own smart phone, which creates demand a loss of hundreds of billion VNĐ” (Kien for online shopping. Shopee focuses Khang, 2018) to be able to make mainly on the app which is suitable for

customers get familiar with the brand

smartphones.

with the desire to capture more market

share in the field.

4. Marketing Objectives:

Ranking table of businesses leading e-commerce in Vietnam by Iprice Insight (from news.zing.vn)

Increase in market share is what all companies desire, because it will show the development of the company. With mixed marketing strategy Shopee has created, people

can see Shopee were ranked first in the list of companies in the field of e-commerce (from July to September, 2018). They should set the first objective of 2019, which is maintaining the number one position, and leave Lazada behind of this race.

Picture from anninhthudo.vn (2018)

Shopee still have a very important problem about the quality of their goods. A lot of the negative feedback from customers on social networking sites and major newspapers in Vietnam. The feedback is mainly referring to faulty goods, broken, or is a fake. In 2019, Shopee must ensure the inspection and authentication of information goods is almost absolute, at least 90% of products, to ensure the benefit for customers. If there's any seller break the law, selling fake, low-quality products, or selling wrong and different product from the one has been posted before, will have to be punished and compensating for damages.

5. STP: Shopee will target all of the different customers. The differences come from the age, gender, job... Shopee is an extremely convenient tool for people who like to buy online, with no conditions and time shopping, and of course the customers should know how to use the internet. That is the reason why the number of young people who buy online is extremely popular, in part because they have access to faster technology. Just using the smartphone or computer equipment, internet access, online shopping will be extremely convenient and simple for everyone.

6. Tactic and action: Difference from objectives of 2018, with new objectives for 2019, Shopee should have a big change in their marketing plan. In particular, some elements in Marketing Mix need to be changed to fit with new objectives. * Product: The quality of service that Shopee is providing should be improved by the investment in censorship. This way will ensure information ...