SINGAPORE: Singaporean retailers, especially those without adequate capacity to establish physical stores and a standalone presence in new markets, have opted to tap the Thai and Malaysian markets through Shopee and Lazada. These retailers can leverage the huge customer base of the two platforms, combined logistics, and numerous advertising tools that could enhance their sales and prominence.
In a video interview conducted by Retail Asia, Nick Morris, founder of cultural insight agency Canvas8, said that selling through these platforms allows retailers to avoid customer acquisition costs. He further said that while there are outlays related to selling on these platforms, the benefits compensate the expenditures as these platforms can act as springboards for Singaporean retailers to penetrate and thrive in new markets.
Quoting an October 2024 report by DHL e-commerce, Morris said that Shopee is frequented by 88% of Thai and 94% of Malaysian customers, while Lazada follows closely with 85% and 79%, respectively.
E-commerce remains a gainful growth approach for Singapore brands entering Malaysia and Thailand, Kel Jin Chua, director at Shopee Singapore said. In a separate interview, Chua said that a number of Singapore retailers come to them expecting to expand into Malaysia and Thailand as they see robust consumer demand and a thriving market.
Reaching out to younger shoppers
Ashutosh Awasthi, director at market research firm Kadence International Singapore, said these platforms let sellers reach younger customers. According to Awasthi, the upward buying power of Gen Z purchasers makes Shopee and Lazada essential for Singaporean retailers growing into these markets. It is also an efficient way to lower costs, he added. He then cited examples of successful partnerships such as “Love, Bonito,” a fashion label that began as a blogshop, rebranded in 2010, and quickly expanded and now has stores in both countries. Another is “Secretlab,” a gaming chair maker that entered Malaysia in 2015 and now sells in more than 50 markets without a physical store.
“BreadTalk,” “Charles & Keith,” and “Razer” have also built a solid presence in Malaysia, employing both e-commerce and omnichannel approaches.
Competition, tech adoption, pricing
Still, strong competition from local and global companies continues to be a threat for some Singaporean sellers. While digital engagement is high in Thailand, adoption diverges by region, frequently necessitating an omnichannel method to influence clientele outside key cities. This can directly increase operational costs, Awasthi said.
Malaysian customers are also more price-conscious. A significant task for Singapore retailers is to balance reasonable pricing while keeping product quality, Awasthi added.
“Tech acceptance in Malaysia and Thailand is slow, predominantly outside major cities. This restricts market infiltration and compels retailers to implement omnichannel tactics rather than banking exclusively on e-commerce.”
Morris suggested that Singaporean retailers who want to get into Malaysian and Thai markets must modify and adapt their strategies. Thai shoppers are very active in social commerce, making influencer alliances and livestream marketing effective tools. On the other hand, Malaysian consumers are more price-conscious, with 56% actively seeking promotions, compared to 37% of Thai shoppers.