Lazada vs Shopee: Top Players in the Philippines’ Ecommerce Game

Lazada vs Shopee Top Players in the Philippines’ Ecommerce Game

Three strategies Lazada and Shopee used to dominate the Philippines’ ecommerce market

Online shopping in the Philippines is thriving. With over 400 million people in the Southeast Asian region pocketing up to US$100 a day in disposable income, more Filipinos are flocking to the Internet looking for places to burn their hard-earned cash.

According to Google and Temasek’s e-Conomy SEA report in 2019, the country’s online consumer goods industry that year was valued at US$3 billion and is forecasted to reach US$12 billion by 2025.

But two critical players have been dominating the Philippine ecommerce game. Set to be the “Amazons of Southeast Asia,” Lazada and Shopee have been winning the hearts – and wallets – of the people.

Challenged by the dominance of brick-and-mortar, poor infrastructure to cater to remote shipping locations and a mostly unbanked population, Amazon struggled to expand its presence within the islandic archipelago. So how did Lazada and Shopee successfully manage to not only clone, but upstage the ecommerce giant’s US$280 billion dollar business model in the Philippines?

Here are three key strategies the two companies implemented to capture this emerging market.

1. Create a truly localized experience

It’s imperative for every successful business to speak the language of their audience. Language can mean industry-specific jargon or the audience’s native dialect. Shopee integrated both.

Appreciating the cultural diversity present in Southeast Asian markets, the Singaporean mobile platform tailored its app for a localized user experience in each of its seven markets, including the Philippines, Malaysia, Thailand, and Indonesia.

“Our region needed an ecommerce platform that was built from the ground up to cater to local cultural nuances and behaviors,” Junjie Zhou, Shopee’s Chief Commercial Officer, said in an interview with Vulcan Post. These “hyper-localized” consumer experiences were crucial to Shopee’s growth.

Shopee understood the need to create “hyper-localized” consumer experiences to stand out from the crowd, especially in a market as culturally diverse as Southeast Asia’s. For instance, in Indonesia, Shopee released a line of Islamic products, such as fashion-forward hijabs and wudhu-friendly cosmetics, to cater to the 87% of the population who identify as Muslim.

In the Philippines, trust is a big thing – 68.61% of shoppers still favor traditional shopping over online because of lack of trust. With Shopee’s transparent seller rating system – a combined metric made up of the seller’s response rate and buyer reviews – customers can rest easy and shop without worrying about the legitimacy of their purchase. Shopee also hosts an in-house content team that keeps a lookout for suspicious users.

To supplement this strategy, the mobile platform has also banked on celebrity endorsements to promote top products. Through livestreams and product demos from favored personalities, customers are more likely to trust and purchase products on the app.

2. Analyze local market characteristics

There are risks involved when a business decides to put its foot through the door in an emerging market. Sizing up what the region has to offer and identifying any potential obstacles will help greatly reduce risks.

Among other businesses in the region, Lazada and Shopee have identified two prevailing obstacles limiting online growth in the Philippines: its cash-based economy and patchy transportation network.

Cash is King

The Philippines’ “cash is king” system prevails above all. In 2018, 99% of transactions were either cash or paper-based. With only 20% of the population banked and only 9% possessing credit cards, the online shopping scene excludes a huge percentage of the population.

Cognizant of this cultural factor, Lazada introduced a cash-on-delivery system, where individuals can simply order online and pay in cash once it’s been delivered. Another alternative is Shopee’s eWallet, where individuals can top up their in-app wallets with cash and use them as credit cards.

These two features have eliminated the need for opening a bank account or owning a credit or debit card.


Despite its many serene and picturesque islands, the logistics infrastructure in the Philippines can be a nightmare. Delivery trucks can find themselves navigating around vast bodies of water and rocky mountains just to deliver a package.

Both Shopee and Lazada have struck strategic partnerships in the location to maximize the reach of their products.

In 2019, Lazada partnered with J&T Express, a leading fast delivery company in Southeast Asia with over 300 branches in the Philippines. This gave Lazada’s shoppers the ability to use J&T’s real-time delivery tracking system to follow their packages or call the 24-hour customer hotline if any problems with delivery come up.

3. Educate potential entrepreneurs

According to a report done by iPrice Group, App Annie and SimilarWeb, Shopee attracts over 19 million monthly users on its website. The leading ecommerce platform welcomes users of both shoppers and sellers alike.

With its flexible C2C business model, users can set up their own shop on Shopee’s platform and sell their products. This business model is similar to Carousell, a Singapore-based C2C mobile marketplace where users can snap a picture of their secondhand items, make a listing on the mobile app and chat with interested buyers.

Back in 2015 when Shopee first launched in the region, the Philippines was still a relatively new market to the ecommerce scene. Their users remained uneducated with the ins and outs of selling online.

Shopee introduced an educational initiative called “Shopee University” in 2016 to nurture the promising talent pool the Philippines had to offer. Aimed to equip potential local entrepreneurs with the proper skills needed in the market, it offers a series of free, in-depth courses to help grow their online businesses. Some of the course topics include marketing, financial management and advertising.

Since 2019, Shopee University has held over a hundred courses in 45 cities across the region. The five-hour sessions have been quite successful, welcoming a total of 9,000 attendees across the Philippines.

It’s clear that Lazada and Shopee are winning the ecommerce game in the Southeast Asian region. Lazada dominates 46% of the ecommerce market share in Southeast Asia and serves 183 million visitors a month, as reported by CrescoData. According to the same report, Shopee also boasts significant monthly user traffic, welcoming over 147 million users to its platform per month.

While Amazon leads ecommerce in the West claiming 50% of the U.S. market share, it has yet to leave its footprint in Southeast Asia. In a 2019 report by iPrice Group on the most used ecommerce portals in Singapore, Amazon was all the way down to the 12th place.

The ecommerce giant seems to be slowly, but strategically, making its presence known in Southeast Asia’s US$240 billion internet economy. In 2019, Amazon launched its first-ever localised website in Singapore and offered users free two- to three-day delivery deals. Another strategy the tech giant is implementing is pricing common goods 4.6% cheaper than the average price to attract users onto its platform, while increasing the price for harder-to-find products.

However, until Amazon can figure out how to localize itself and successfully replicate Lazada and Shopee’s models, these two homegrown ecommerce giants will continue to grow unimpeded in the nascent SEA ecommerce market.

Header image by on Unsplash


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