Thailand’s leading e-commerce platforms continue to raise commissions to boost revenues and offset marketing costs.
Thailand’s leading e-commerce platforms continue to raise commissions to increase revenue and offset the cost of marketing campaigns.
According to the Bangkok Post, Thailand’s leading e-commerce platforms – Shopee, Lazada, and TikTok – continue to raise sales commissions, driving up costs for local merchants.
TikTok Shop has already announced commission hikes twice this year. In April, the company went from a flat rate of 4% for all product categories to a 4-5.35% range, depending on the category. The subsequent increase is scheduled for September 2024, when commissions will rise by about 1% for each category.
Shopee also raised commissions in April this year from 4-7.49% to 5-8.56%, with an additional two percentage point increase on July 11. As a result, branded merchants at Shopee Mall faced commission hikes from 6% to 8% or even 10% in the electronics category.
Lazada implemented a 2-3% commission hike from July 1, setting a new range of 5% to 8% for sellers on the marketplace. For LazMall, the latest sales commission ranges from 6% to 10%.
Industry experts attribute this trend to the platforms’ refocusing on improving profitability after the pandemic. Alessandro Piscini, co-founder of CREA Asia and former CEO of Lazada Thailand, said capital markets are now more focused on profitability and business sustainability than growth.
Pavut Pongvitayapanu, an e-commerce pioneer in Thailand, emphasized that e-commerce platforms dominate the market and need to increase revenues to offset previous spending on subsidies and marketing campaigns.
Interestingly, Lazada launched in 2012 but only introduced a 1% commission in May 2022. Shopee, launched in 2015, also started charging commissions in May 2022. Since then, both companies have raised commissions three times in the last 15 months.
Experts advise brands to focus on improving profitability, make decisions based on ROI and advertising costs, and consider the cost of customer acquisition in the face of rising commissions on e-commerce platforms.
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