While the Digital Resilience Bonus (DRB) for SMEs to adopt digital solutions is no longer available, the dominant shift to e-commerce cannot be denied. Whether you are thinking of onboarding your existing business to e-commerce platforms or starting a new business venture, e-commerce platforms are one of the first avenues to enter the digital retail landscape.
To help you select the most suitable e-commerce platform for your business, here are some considerations.
#1 Costs Of Setting Up Shop
Lazada Singapore: If you are simply an individual seller on Lazada Marketplace, you will not have to pay any fee to create an account.
Mummys Market: Sign up cost is not transparent on Mummys Market website. Interested sellers would need to fill in questionnaire first and then a representative will reach out to you.
Qoo10: You will have to pay a seller registration fee of 10,000 Qcash (Qoo10 store currency)an equivalent of $100 simply to register for an account here. If you decide to register for a Qstore, you would have to pay a one-time fee of 20,000 Qcash ($200) for Basic Qstore. Standard and Advanced Qstore will have a one-time fee of 50,000 Qcash and 500,000 Qcash respectively.
Shopee: You can open a seller account with no set up fee. For Shopee Mall, you will need to be a brand owner or an authorized distributor.
Zalora: Sign up cost is not transparent on Zalora website. Interested sellers would need to fill in questionnaire first and then a representative will reach out to you.
#2 Commission Fee Structure
Lazada Singapore: Lazada Marketplace does not charge sellers any commission, while LazMall sellers pay between 3% to 5% in commissions, depending on category. And in both cases, there is a 2% payment gateway fee to facilitate online credit card payment processing.
Qoo10: Relatively higher commission fee of 12% (as compared to the other three e-commerce platforms). This means that your business might have to charge consumers higher prices to ensure that your profit margins remain the same. That being said, you will be paying these higher prices for Qoo10 to do the marketing work for your brand.
An interesting thing to note would be that Qoo10 offers a service fee rate according to the seller account grade and the basic item price (Qprice). The service fee is calculated based on the total transaction amount (price of basic item + option price + shipping fee). The credit card service fee is included in the Qoo10 service Fee, herein there is no additional fee on it. The additional tax incurred from the service fee would be borne by the seller. More details can be found here.
Shopee: Shopee Marketplace currently charges zero commission. However, there will be a 2% commission implemented from 1 May 2022 onwards, while Shopee Mall will have a 5% commission. Both marketplace and Shopee Mall will be charged transaction fees of 2%. Service fee will also be charged to sellers participating in the Coins Cashback and Free Shipping programme.
Mummys Market: Commission fees, transaction fees and any possible fees are not transparently stated on their website or on their terms and conditions.
Zalora: The seller agrees to pay Zalora a fixed percentage commission on the gross revenue from the sales made through the Zalora platform. Depending on the category it may be appropriate to agree different commission percentages for certain items or product categories.
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#3 Delivery Options
Lazada Singapore: You will have to use SingPost or Ninja Van for delivery of your products to your customers. If you choose the Fulfillment by Lazada, you would have to pay additional fees ranging from $1.60 to $9.00 per cubic metre per item to cover manpower, storage and packaging costs.
For shipping fees, sellers will have to pay a flat rate of $2.49 (inclusive of GST) for all Order Shipping Fee charges, regardless of shipping tiers and parcel weight. Please bear in mind to key in an accurate parcel weight as Lazada will recover any differences due to inaccuracies directly from seller payouts.
Refer to the following image for the different shipping tiers.
Qoo10: If you are a seller on Qoo10, you would have to use Qxpress (similar to how Shopee and Lazada use Ninja Van). You have 2 types of delivery services to choose from – namely the standard delivery and quick delivery (more expensive than the standard one). For the standard option, there are no same-day orders and deliveries. Instead, choose a pickup date from the subsequent day onwards upon a successful order. You can get your goods delivered from Mondays to Saturdays from 10am to 7pm. For the quick delivery option, you have the option of choosing a pickup time slot. Check out coupons from Qxpress store to enjoy any possible cost savings.
Shopee: If you are a Shopee seller, there are Shopee Supported Logistics partners which third-party logistics providers that have integrated their system with Shopee. With this integration, you can easily arrange shipments via Shopee App and Seller Centre. Both sellers and buyers can also keep track of shipments directly via Shopee App. These partners include Shopee Xpress (SPX), Speedpost Economy (SingPost), Ninja Van (Home Delivery and Self-collection via Ninja Points), J&T Express, UrbanFox, and uParcel. Only J&T Express is available to all sellers, the rest are available to selected sellers
Mummys Market: No information stated on their website.
Zalora: Standard Seller are only allowed to utilised courier partner assigned by Zalora. Zalora partners with local deliveries couriers like LBC Express, 2GO, Entrego, DHL, 7-Eleven all of which you can track with ParcelsApp.com or through their mobile apps.
#4 Penalties For Errant Sellers
Lazada Singapore: Lazada measures sellers on a metric called Seller Fault Cancellation Rate to maximise customers’ purchase experiences on the platform. Either sellers or Lazada itself can cancel orders. Lazada will cancel orders when sellers fail to comply with the Ship On Time service level agreements on the platform. Having a high cancellation rate will adversely affect your reputation as a seller and ability to sell on Lazada. Consequences of having numerous cancellation rates include but are not limited to exclusion from participating in Lazada campaigns as well as a Lazada-imposed restriction of the number of orders you can transact for a period of around 2 weeks following your various cancellations.
Qoo10: Upon payment from buyers, Qoo10 sellers must ship and input delivery information including the name of the delivery company, the tracking number, etc. through Qoo10 Sales Manager (“QSM”) within 3 business days from the date of the delivery instruction. If you fail to do so, Qoo10 may cancel the transaction and shall not be responsible or liable for any loss or damages to the seller due to such cancellation. Moreover, sellers will have to bear all liabilities relating to failed deliveries because of reasons not due to buyers.
Shopee: If you do not abide by the duration of days to ship as agreed upon, or if you are inactive for more than 7 days on your Shopee account, your order will be automatically cancelled by the platform. You will be subject to a Late Shipment Rate penalty as well if you do not ship out your products within 2 days.
Mummys Market: If the customer requests for a refund or return of item, MM will notify Vendor in writing. Seller may respond to customer’s request according to the steps provided by MM in the written notification. Vendor must respond within the time-frame stipulated in the written notification. If MM does not hear from seller within the stipulated period, MM will proceed to assess customer’s request without further notice to seller. MM will review each seller’s response on a case-by-case basis and decide whether customer’s request is legit against the seller.
Zalora: If wrong items are sent, are of different image or are defective/ missing items, seller will get penalised. If Zalora detects a serious breach of KPIs, they will notify you about the KPI breach and penalty to be imposed. Penalty may include Warning, Temporary Order Limitation, or Account Suspension. Actions imposed will be determined by the seriousness of the breach.
Choosing The Right E-Commerce Platform For Your Business
Each of the five e-commerce platforms provide different features, which are designed to cater to different retail businesses, with specific needs based on type of products sold, target demographics, as well as customer service requirements.
Besides the Digital Resilience Bonus (DRB), you can leverage on other grants and schemes for digital adoption when you sell and when you buy or operate your business. OCBC lists down the different government and bank-specific support you can tap on.
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This article was first published on 10 April 2020 and has been updated with additional reporting. In this article, we feature Lazada, Mummys Market, Shopee, Qoo10 and Zalora as they were the approved platform providers under the E-Commerce Booster Package (which ended on 16 November 2021) when it was first written.
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