Shopee, Lazada and TikTok are expected to continue to increase sales transaction fees to grow revenue, which raise costs for local merchants.
TikTok Shop announced two fee increases this year. In April, it changed from a flat 4% fee for all product categories to a range of 4-5.35%, depending on the category.
A further increase is planned, raising commission fees by roughly 1% per category, which will take effect in September 2024. The sales transaction fee for fashion items will rise from 4-4.28% to 4-5.35%, while fees for fast-moving consumer goods and lifestyle items will increase from 4.28% to 5.35%. The fee for electronics items will remain at 4.28%.
So far this year, the three major e-commerce platforms in Thailand have raised their fees at least twice, and two of them raised their fees at almost the same time.
Shopee raised its fee in April this year from a range of 4-7.49% to 5-8.56%, depending on the product category. On July 11, it further increased such fees by roughly two percentage points.
As a consequence, its Shopee mall sellers or those selling branded products saw fees rising from 6% to 8% or even 10% in the electronics product category, while non-mall sellers in the electronics product category experienced an increase from 5% to 7%.
Lazada implemented a fee increase of 2-3% on July 1, with the new fee range varying from 5% to 8%, depending on the product category for marketplace sellers.
For LazMall, the new sales transaction fee ranges from 6% to 10%.
Alessandro Piscini, the co-founder of the e-commerce enablement specialist CREA Asia and a former chief executive of Lazada Thailand, said that following the post-pandemic adjustments, all platforms in Southeast Asia are prioritising bottom-line growth over gross merchandise value.
This shift is driven by the capital markets' increased focus on business profitability and sustainability rather than growth, he added.
CREA told its brand partners to expect further fee increases in e-marketplaces in Thailand, which will lead to a narrowing of the current gap in fees between the Southeast Asian market and the US and Chinese markets.
"Brands need to increase their focus on profitability and make decisions based on return on investment and return on advertising spend alongside customer acquisition costs," said Mr Piscini.
Pawoot Pongvitayapanu, a local e-commerce pioneer, said e-commerce platforms have dominated the market and they need to increase their revenue as they still have a fee gap to adjust.
Shopee and Lazada have spent heavily on price subsidies, with discount and marketing campaigns to attract customers while suffering accumulated losses, before Lazada turned profitable in 2021 and Shopee in 2022. This is the time for them to harvest what they have invested, Mr Pawoot added.
Lazada commenced operations in 2012, and after a decade of operations started collecting a 1% fee in May 2022, while Shopee was launched in 2015 and started collecting fees in May 2022. Both increased fees to 2% in October 2022.
Mr Pawoot said that Shopee and Lazada have hiked fees three times over the past 15 months, from May 2022 to October 2023, to improve profitability.
Mr Pawoot said Shopee increased the fee it charges on non-mall sellers in mid-October 2023 from 4.28% to 5.35%, the second increase in seven months. In April 2023, it doubled the fee from 2.14% to 4.28%.
Lazada raised the commission fee in its LazMall marketplace for general products and fashion from 6% to 7% on Oct 1, 2023, while the fee for electronic goods increased from 4% to 5%.
In December 2022, TikTok started collecting a commission fee of 4%.