Play the ultimate model of Southeast Asian e-commerce STL
In the impression of many people, Southeast Asia seems to be just a collection of small countries with good scenery but relatively backward development. It seems that there is not much room for the development of e-commerce. But in fact, there is a big error in this impression.
Southeast Asia has been one of the fastest growing e-commerce regions in the world over the past five years . In 2020, the average number of daily e-commerce orders in Southeast Asia will exceed 5 million, and the scale of e-commerce will reach US$74 billion; in 2021, the scale of e-commerce will exceed US$120 billion, a year-on-year increase of 62%.
For us Chinese sellers, Southeast Asia is a good market. In order to let everyone know more about this new foreign trade soil in Southeast Asia, we combine the current trade environment. From the three perspectives of why it is recommended to choose the Southeast Asian market , how to quickly enter the Southeast Asian market , and how to play the Southeast Asian e-commerce market , I will interpret this blue ocean market for everyone.
Why recommend Southeast Asia market
1. The local market has huge consumption potential
Southeast Asia has a large population and a very young population structure. The average age of its consumers is 10 years younger than China’s. In addition to this, Southeast Asians spend an average of 3.6 hours a day on the mobile internet, which is currently the highest in the world.
2. Is in the cross-border e-commerce outlet
In recent years, Southeast Asia has become the darling of cross-border e-commerce companies. The huge demographic dividend and extremely high Internet coverage have enabled the rapid development of e-commerce business in Southeast Asia. At present, the Internet user base of the entire Southeast Asian market ranks third in the world. But the penetration rate of the e-commerce segment is less than 4%. It is predicted that the penetration rate of e-commerce will reach about 50% in the next five years .
In addition, the entire social media in Southeast Asia is very active, and has cultivated a very good user base for e-commerce.
3. The Belt and Road Policy Promotion
Southeast Asian countries (regions) are not only important positions for China to carry out diplomacy along the route, but also important links to effectively promote the construction and development of the “Belt and Road” initiative. In recent years, the state has continuously increased its support for cross-border e-commerce, and successively introduced policies such as the establishment of a comprehensive pilot zone for cross-border e-commerce and exemption of taxes on some exported goods.
Embracing 400 million Internet users in Southeast Asia
Cross-border e-commerce platforms are the best channel for online exchange of cross-border commodities. If you want to embrace the 400 million Internet users in Southeast Asia and quickly enter this market, choosing a suitable and high-quality platform is the best choice for sellers.
Among the local e-commerce platforms in Southeast Asia, there are Shopee, Lazada, Tokopedia, etc. Shopee and Lazada belong to the first array , and they are also the preferred platforms for most sellers entering Southeast Asia.
Next, we will mainly analyze the advantages of the two platforms, Shopee and Lazada, and introduce them in detail from the aspects of user portraits, logistics, and commissions.
2.1 User portrait
Shopee: The market mainly covers Taiwan, China and six countries in Southeast Asia. There are 8 sites in Brazil in South America. Its consumers are mainly young people, and the price is close to the people. It is similar to the domestic Taobao.
LAZADA: The market mainly covers 8 countries including Indonesia, the Philippines, Malaysia and Vietnam, and its brand positioning is mainly inclined to the high-end image route.
2.2 Logistics situation
Shopee uses the official logistics SLS by default, of course, it can also choose the logistics. You can set the delivery time to be 3 or 7 days, but when the delivery time is 7 days or more, the status of the front-end product display page will change to pre-sale, which will directly affect the conversion rate.
The official logistics used by LAZADA is LGS. The delivery time is about 10 days, but the order information will be tracked within 48 hours. After the order arrives at the transit warehouse, the platform will be responsible for transportation.
2.3 Commission
The current data shows that LAZADA charges 2% for payment procedures; Shopee charges 3%-5%. Although it looks similar, the profit of the Shopee platform is lower than that of LAZADA. Both platforms, Lazada and Shopee, are in the development period, and each has its own advantages. The traffic of the two platforms in the Southeast Asian market is equal.
Play the ultimate mode STL in Southeast Asia
There are many factors for the success of cross-border e-commerce, such as talent, capital, and choosing the right platform to operate. How to play the Southeast Asian e-commerce market? The first is the selection and the second is the operation. Next, Xiaohua recommends Huaju’s first initiative - Southeast Asia STL model
3.1 What is STL mode
The STL model is to take advantage of the advantages between the shopee and Lazada platforms, collect the products of the shopee platform, and then put them on the Lazada store for sale. There is no need to stock up on your own. Our source of goods is the entire shopee platform. As long as you find suitable and high-profit products, use Huaju ERP to collect and modify the price and put them on the Lazada store for sale, you can enter the Southeast Asian market at a low cost.
3.2 What are the advantages of STL
No platform commission: Local accounts are free of platform transaction commission, only 2% of the platform transaction fee.
Fast payment collection speed: The payment collection time of local accounts is faster, and the payment is collected once in 3-7 days on average.
There is traffic support: local accounts have their own platform traffic support, and the store traffic and weight will be higher.
Higher conversion rate: The conversion rate of local account store products is higher, making it easier to place orders and create hits
Fast logistics timeliness: local logistics delivery, fast timeliness, with better logistics timeliness and after-sales service.
3.3 Handling without a source
The STL model is equivalent to Lazada’s multi-store model without supply. The core of the lack of supply lies in batch collection of commodities and multi-store operations, which requires the use of ERP tools to achieve unified management.
The features of Huaju ERP are that one person can manage 100+ stores , 500+ products can be put on the shelves in one day , 1000+ products can be managed by one key , one-stop serial orders and overseas warehouses , 1:1 built-in store background function , integrated store data management Panel and other 6 core functions help sellers to easily realize multi-store operation.
3.4 Profit Analysis of STL Model
The formula for calculating the profit of the STL model is:
Lazada selling price - shopee selling price (including shipping fee) overseas warehouse packing fee - platform commission = gross profit.
How new sellers can get a head start
In general, the STL model is to take advantage of the advantages of Lazada and Shopee platforms, and use efficient ERP management tools to collect hot-selling and lower-priced products on the Shopee platform, and put them on the Lazada platform with higher profits. Since it is a local Lazada store, sellers can enjoy various official support, including help in traffic, payment speed, and logistics timeliness, which greatly improves the seller’s competitive advantage.
However, for ordinary domestic sellers, opening a local Lazada store faces various restrictions, such as registration of local identity information in Southeast Asia, which hinders most competitors. If you want to take the lead in the Southeast Asian market, you can choose to use the Huaju STL model, and cooperate with us to solve a full set of services from store opening, product selection, management, ordering, logistics, and payment collection.