Marking the yearly high with 12.12
One of ecommerce’s largest shopping festivals, 12.12, just closed. Local media reported that the transaction value reached Rp8tn versus Rp6.8tn in 2018. Free delivery, flash sales and goods priced at Rp12 were still among the top promotions across platforms.
A day with a Shopee star seller
To better understand the trends, we visited one of Shopee’s star sellers. Starting small, 27-year-old owner Winnie Husada established Ace Fashion in 2016. It sells women’s apparel and managed to grow the packages shipped/day from 100 in 2016 to 2,000 in 2019. With c.900k followers now on Shopee, Husada has decided to seize an exclusive contract that requires her to only sell on the platform.
Monetisation phase: Commission fees and value-added services
Ecommerce has ventured into the monetisation phase in 2019. Top merchants have started to pay a 1-2% fee per transaction value. On top of that, there are conditional promotional programmes that offer free delivery services or advertising slots for merchants willing to pay a certain fee.
Road to profitability is on track
It is interesting that 2019 was the first year that most ecommerce platforms began trying to monetize, either by charging direct fees or offering value-added services. Our ecommerce guru Paul McKenzie explains that a monetisation rate of at least 4% is needed to reach breakeven. That said, we believe the road to profitability is on track, and the focus may have shifted from growth to profitability.