One of the most attractive points of listing your brand’s products on Lazada is the ability to take part in its multitude of campaigns, accessed by thousands of customers.
Such campaigns aren’t limited in size and scope: they range from huge events like its heavily marketed Online Festival, which include 11.11 and 12.12, to smaller weekly campaigns such as the current ‘Fall In Love’ event for Valentines Day.
Not only does Southeast Asia’s largest ecommerce platform promote campaigns via large banner adverts on its main landing page, it drives traffic via paid acquisition channels and email marketing.
For brands, such visibility is critical; Southeast Asian consumers increasingly use online marketplaces to begin their product journey, bypassing even search engines.
Lazada promises significant internet traffic during its biggest campaigns – the 11.11 sales event attracted 10 million site visits in the first 24 hours and garnered 10 times the sales volume when compared to non campaign days.
While traffic is definitely attractive to brands, an analysis of campaign promotions by data analytics platform BrandIQ found that companies have limited control over the visibility of their products during such events.
Provided brand managers meet Lazada’s conditions of discount percentage and relevant categories, they can pitch as many SKUs as they like for campaigns such as ‘Flash Sales’ and ‘Daily Deals’. However, this only accounts for a small percentage of the ‘shelf space’ available on the Lazada campaign page with the majority of product placement within the campaign categories out of the brand manager’s control.
Marketplace and Brand relationship
Brands shouldn’t take a hands-off role after agreeing to participate in a particular campaign. BrandIQ discovered that the maximum mileage garnered from these campaigns lean more towards promoting Lazada’s own inventory and not the brand’s official shop-in-shop (Amazon, anyone?).
Lazada holds inventory of major products, and sells it via a retail model. These campaigns offer a window for Lazada to boost sales of its own inventory.
How? BrandIQ deep dived into a current category campaign, ‘IT on Sale‘, running from February 6-9 on Lazada Thailand. The sale advertises ‘up to 70% off’ electronic category products.
The data indicated that the products listed under ‘Recommended Items’ were sold by Lazada. This is also the case in the sub-category ‘Mobiles on Sale’ portion – for example, all listed SKUs are sold directly by Lazada, rather than the Samsung or Huawei official stores.
Directly under ‘Recommended Items’ is another portion of the landing page titled ‘Top Brands on Sale’.
Clicking on the brand’s logo takes customers to the brand’s official store, but where is the user directed after clicking the individual SKUs shown to the right of the brand logo?
This is despite the fact that official shop-in-shops offer the same product; it’s a conscious decision by Lazada to sell its own retail SKU over the brands.
Brands should pay close attention to the evolving nature of marketplaces and look to them as a way to jump into ecommerce, but not the long term game. As the ecommerce landscape becomes increasingly competitive and incentivized; companies need careful monitoring of all acquisition channels if they desire sustained growth.