Shopee started charging commission in Vietnam last week, a move that elicited a lot of unhappiness amongst sellers on the platform, reported Vietnam Investment Review.
Starting from April 1, sellers on Shopee Mall Vietnam, which is an area of the app designated for official stores, or B2C sales, will be charged between 1 and 2 percent commission after each successful deal, depending on the payment method that the vendors use. The fee will be deducted from each order before the remaining amount is transferred to the seller’s Shopee wallet. Individual sellers on the open C2C marketplace of the Shopee app are not affected.
The same policy was also rolled out to Shopee Mall sellers in Singapore on the same day as Vietnam, according someone familiar with the matter.
Shopee has already implemented commission fees for both B2C and C2C sellers in Taiwan as well as B2C sellers in Indonesia, but it’s a new move in Vietnam. Across Southeast Asia, letting sellers onto the platform with zero commissions has been the norm as fast growth has been the main objective in the early stages of business.
When the conditions are right, such as mature services and a user pool that is ready for changes, charging a small fee can help affirm the e-commerce platform’s standing in the market, a Shopee spokesperson told KrASIA.
Shopee’s decision to implement this policy in Vietnam, where it is the most popular e-commerce platform, is the next step in a strategy that first focused on gaining market share and now aims at building a more sustainable business model, Shopee said in an official statement to KrASIA.
Shopee’s parent company Sea has already been monetizing Shopee this way for awhile in markets like Taiwan and Indonesia. The company said in the Fourth Quarter and Full Year 2018 results report that ramping up monetization efforts to effectively grow Shopee’s ecosystem will be its key focus in 2019. Shopee has been a burden on Sea’s overall financials, contributing to its widening losses.
According to Tran Tuan Anh, managing director of Shopee Vietnam, Shopee is considering rolling out commission charges across the rest of its markets in Southeast Asia, a move that would make it stand out against its competitors in the region.
Lazada recently scrapped the commission fee in Singapore to boost transaction and has plans to implement a zero-charge policy across the region. Whereas in Indonesia, Bukalapak and Tokopedia also still maintain a zero-sales commission policy.