Secrets of Shopee 🤫
We have set up a fast growing Shopee store for an entirely new brand. The products are ranked among top sellers. In comparison, Lazada has been bad. It's slow and inefficient. What's the secret sauce?
👋 Hola! Welcome to Out of Singapore. I am Shantanu and I am building businesses from scratch from Singapore. On this newsletter, I share stories to motivate you.
Singapore has famously failed to build global brands in spite of being the financial capital of Asia. Japan, Korea, China, Hong Kong - they have all have famous global brands. In comparison, Singapore is dominated by thousands of small and medium businesses. It would be easy to blame Singapore’s small market and landmass. However, look at the Samsung and Hyundai based out of Seoul. Yes, it isn’t the perfect comparison. My point is Singapore’s advantages trump its small market excuse. That’s why I have chosen SG as my base to build global businesses. I operate in the internet space where advantages of SG become more pronounced.
How will this work out? I don’t know. You will come to know how far I go after a few years.🤞
Of the few large successful businesses made in Singapore are Shopee and Grab. Shopee is a horizontal marketplace that is active in SG, Indonesia and Malaysia. It isn’t big in other markets. Grab is Uber of South East Asia - its is smooth, cheap and trustable everywhere in SEA. Since I am building consumer brands, Shopee is important. Lazada is Shopee’s competitor, and run by Alibaba. I launched our new supplements brand on both the marketplaces. Turns out Shopee is 10x more efficient and higher scale compared to Lazada.
Before I jump into revealing the secrets, let’s do a quick poll. Question 1 -
Question 2 - how important is physical fitness for you?
I was primarily an online buyer. However, since I moved to Dubai and then Singapore, I shop offline more often. It is convenient to shop offline in these cities compared to Bangalore or any other city in India. I also dislike the packaging of online purchases. It spoils my mood every time I see those plastic bags or the “sustainable” brown packages. Such a waste.
Lot’s of complaining today, ahahah. I will start spilling the beans on Shopee secrets.
Secret #1 We leverage all Shopee ad formats
There are 5 types of ad formats under Shopee Ads
Search Ads - expensive, not efficient but crucial, doesn’t scale up well
Discovery Ads - cheap but doesn’t scale
Boost Ads - cheap and scales crazy!
Shop search ads - Builds awareness, high ROI, low scale.
Display ads - This is a killer. We haven’t tried it in Shopee, so won’t comment.
Boost is a new addition. We use a mix of first four ad types - our initial focus was driving traffic through search ads. We kept discovery ads on and activated boost ads as soon as it was available.
Initially all traffic came via search ads. Search ads is laser focused on high intent customers. Somebody wants to buy NMN, we show up. The tip is - always be the first in the list. It is expensive but it works wonders. It is psychological - consumers trust and value the first in the list. If you also beat the other 3 competing listings in price and offer, you get immediate conversions.
Now, here is another trick - if you are low on funds and want to conserve funds - then be in top 3 and be a few dollars cheaper than the first listing.
Search ads helped build brand awareness in the first 2 months. We started seeing discovery ads scaling up automatically post it. Boost ads was also slowly catching up to Discovery ads. While they were very good ROI (4-7x return), they didn’t drive volumes. By the 5th month, Boost ads started firing. Today, 80% of our ad sale comes from boost ads.
The biggest traffic driver for a shop is display ads. It has restrictions and can only be activated by Shopee. We are currently working to get this activated. I know this because display ads was our biggest sales weapon in Myntra.
Secret #2 We participate in every possible campaign
Keep a look out on the marketing centre. The Shopee team has wonderfully put interventions on traffic, customer engagement and conversion. Have a look for yourself.
When you are starting out as a brand, you should select the suitable sales channel and do everything possible to win that channel. For us these channels were marketplaces and our own website.
On Shopee and Lazada, we participated in every possible campaign - from flash sale, payday sale to double day campaigns. It has done two things for us
Consumers have seen across every campaign that these platforms run - Great brand awareness tool
It drive conversions of 30% and higher. That’s massive (any conversion higher than 2% is massive for me).
Secret #3 Find a friend who works at Shopee
Hahah. I have a smart friend who works at Shopee and gives me heads up. When things are not working out, she intervenes and “magic” happens. I was lucky in this respect. A good friend inside the company helps remove process blockages.
If you don’t have friends, then you will have to cultivate friendships or relationships. It helps us a lot to have an insider perspective. Insiders will know what’s working for other brands and will guide you in the same path.
Supplementary secrets
The above three secrets had the highest impact, however, there are other factors that supported us. Here are some of them
Our store manager (external agency) was open to new initiatives, and proactive. She ensured all actions are taken on time. Store monitoring was excellent - any delay in shipment was promptly highlighted. She also ensured our store rating is high.
We spend an inordinate amount of marketing money on Facebook. Practically, anyone interested in supplements would have come across our ads. In fact, we spend more than established brands every month.
Our store got upgraded to Shopee mall. The badge ensured higher trust and we saw immediate boost in traffic and conversion.
The search keyword performance was monitored every 3 days and keyword bids were adjusted. We tracked expense, CTR and conversion value.
Our product lineup focuses on in demand products. Of the 7 products, 2 are trending on Tiktok. We didn’t have to educate consumers. They saw the product name, validated the quality and were impressed by the value provided.
What’s next on Shopee?
Our current interventions have been tactical. They have helped us scale to a sustainable revenue. The next stage of scale will involve
Display banner ads on Shopee homepage and category pages.
Inclusion of brand in Shopee creatives during key campaigns.
Annual Shopee package inclusion
The last 5 months has been a lot of testing and finding the tricks that work for us. When we started, it seemed Lazada will do better. But Lazada couldn’t scale. When we invested more marketing money, the ROI just fell. For Shopee, every extra dollar spent gave us many more dollars back. This also made us focus all our efforts on Shopee instead of trying to win both the platforms.
In another news, we have finally opened out Tiktok store and tied up with live streamers. It has been just been 5 days and it has become our main sales channel. What’s the secret here? Haha, cannot give away all the secrets 🤐
You are rockstar! Thanks for reading again 😻 Please like the post, and share it with your friends, colleagues and any aspiring entrepreneur you know of.
I have missed my family this week, specially my cutest niece. That small kid showered so much love 🥹 I want to see her everyday.
Who do I love more between Jisoo or Mishka (my niece)?
Sorry Jisoo, Mishka is my love 🤭
Hahaha! I also began running after a break of 3 weeks. It hasn’t been easy. I am not sleeping well and am tired every morning. A bit anxious. However, I did 2 small runs and reached 7 km yesterday. Hoping next week will be 10 km (or 11.5 km? I really want to cross 10 km soon 🤸)
Next I need to start playing tennis again. So many things to do, aah!
Okay, I take rest now. Such a long week.
Bye bye! Have a great week ahead! Cheers 🍷