subject e commerce final report analysis of shopee vietnams business model canvas

VIETNAM GENERAL CONFEDERATION OF LABOR TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION SUBJECT: E-COMMERCE FINAL REPORT ANALYSIS OF SHOPEE VIETNAM''''S BUSINESS MODEL CANVAS Lec

VIETNAM GENERAL CONFEDERATION OF LABOR

TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION

SUBJECT: E-COMMERCE FINAL REPORT

ANALYSIS OF SHOPEE VIETNAM'S BUSINESS MODEL CANVAS

Lecturer: Dr Doan Xuan Huy Minh Group: 6

1 Cao Phương Quỳnh Nhi 721H0092

2 Phạm Thị Di ệu Ngọc 721H0666

3 Tăng Mỹ Ng ọc 721H0078

HO CHI MINH CITY, 15 DECEMBER 2023

LECTURER’S COMMENTS

MEMBERSHIP ASSESSMENT TABLE

• 2.2 Value Propositions

• 2.3 Channels

• 3.1 Evaluate the Shopee Vietnam strategy

• 3.2 Shopee Vietnam changes in strategy

• Doing Word Report

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TABLE OF CONTENTS

INTRODUCTION 1

I OVERVIEW ABOUT SHOPEE VIETNAM 2

1.1 The Formation History 2

1.2 The Achievements of Shopee Vietnam 2

II ANALYZING THE E-COMMERCE STRATEGY OF SHOPEE VIETNAM USING BUSINESS MODEL CANVAS 3

2.1 Customer Segments 3

2.2 Value Propositions 3

2.3 Channels 4

2.4 Customer Relationships 6

2.5 Revenue Streams 7

2.6 Key Resources 8

2.7 Key Activities 9

2.8 Key Partnerships 10

2.9 Cost Structure 12

III STRATEGY ASSESSMENT 13

3.1 Evaluate The Shopee Vietnam Strategy 13

3.1.1 Advantage 13

3.1.2 Disadvantage 13

3.2 Shopee Vietnam Changes in Strategy 14

3.3 Recommendations 15

CONCLUSION 17

LIST OF IMAGES

Image 1 METRIC Announced the E-Commerce Market Report for Q3/2023 2Image 2 Top E-Commerce Site in Vietnam in 2022 5Image 3 The Warranty Policy of Xiaomi Redmi Note 12 Phones 6

When Shopee launched in Vietnam, many domestic and international e-commerce websites, and applications such as Lazada, Tiki, Sendo, etc., were dominating the market However, Shopee has now become the largest e-commerce platform in Southeast Asia Shopee's revenue for the entire year of 2022 reached 91 trillion VND, accounting for nearly 73% of the total revenue of the top 4 platforms One of the crucial factors contributing to Shopee's success is its intelligent brand-building strategy Shopee is not merely an e-commerce platform but also a multidimensional online shopping community, creating an engaging and positive shopping experience for consumers They have leveraged the ubiquity of social media to create innovative advertising campaigns and actively engage with customers

A question that many people are interested in is: What strategies has Shopee implemented

to sustain its business operations, surpass large competitors, and lead the e-commerce market in Southeast Asia in general and in Vietnam in particular? To answer this question, our team conducted research with the topic: "Analysis of Shopee Vietnam's Business Model Canvas."

I OVERVIEW ABOUT SHOPEE VIETNAM

1.1 The Formation History

Shopee, owned by SEA Group founded by Forrest Li in 2009, operates in 7 Southeast Asian markets It officially launched in Vietnam on August 8, 2016, after beta testing In 2019, Shopee expanded to Brazil

1.2 The Achievements of Shopee Vietnam

- In 2018, according to the data of the 2018 Vietnam E-commerce Summary Report released by iPrice, Shopee led in website traffic

- As of 2022, Shopee leads the e-commerce industry with almost 73% of total revenue, equivalent to about 91 trillion VND, according to the 2022 METRIC report

- In Q3 2023, Shopee maintained leadership and stability, increasing its market share by 6% from the Q2, according to the METRIC's report

Image 1 METRIC Announced the E-Commerce Market Report for Q3/2023

II ANALYZING THE E-COMMERCE STRATEGY OF SHOPEE VIETNAM USING BUSINESS MODEL CANVAS

2.1 Customer Segments

Shopee's customer base is mainly in urban areas like Hanoi and Ho Chi Minh City Demographically, it attracts users aged 16 to 40, irrespective of gender, with online access and smartphone usage, interested in diverse products Psychologically, Shopee targets those valuing online convenience, time - saving, and promotions

Based on the above analysis, the group has identified four main customer segments that Shopee targets:

- Frequent spenders, often housewives and mothers, love researching products for the best deals Shopee caters to them with promotions like "Ngay Hoi Me Va Be" and

"Shopee Mum Club," ensuring savings and product quality

- Spontaneous shoppers, mainly young and influenced by consumerism, are the prime target for Shopee's monthly events like "Double Day Sale" and "Mid-Month Sale."

- Convenience seekers prefer the speed of online ordering and payment Shopee meets their needs through "ShopeePay" and offers installment payment discounts via

- Product Diversity: Shopee provides a diverse product selection, serving as a one-stop

shop for all customers' online shopping needs

- Competitive Prices: Shopee is known for its affordable prices, with frequent discounts

and promotions

- Convenient App: Shopee's user-friendly mobile app facilitates easy browsing, product

comparison, and secure checkout with various payment options

- Fast and Reliable Shipping: Shopee partners with reputable shipping providers to

ensure fast and reliable delivery

- Consumer Protection: Shopee offers a buyer protection program that helps resolve

disputes and ensure customer satisfaction

- Interactivity and Entertainment: Shopee regularly hosts campaigns and games to

make the shopping experience more engaging and rewarding

Shopee stands out for diverse products and competitive prices Among the customers who participated in the discussion, as compiled from the "Vietnamese E-commerce Industry 2020", Shopee led in both the "Product diversity" (45.2%) and "Stable, affordable, cheap prices" (40%) segments when surveyed about the "5 key factors that make customers satisfied when experiencing."

2.3 Channels

- Mobile App: The application has a user-friendly interface, making it easy to search

and shop, and provides many attractive features It is a top channel to reach customers, leading as the most downloaded free shopping app in Vietnam in 2022, according to Statista data

- Website: Shopee's website provides comprehensive products' information,

promotions, shipping policies, and payment methods The website is the second most effective channel, rated the top e-commerce site in Vietnam in 2022 with about 84.5 million monthly visitors, according to Statista

Source: Statista

- Social Media (Facebook, TikTok, Instagram, YouTube): Shopee regularly organizes

social media marketing campaigns to reach millions of users and increase brand awareness According to a report by iPrice Group, social media marketing campaigns helped Shopee grow sales by 30% in the first quarter of 2023

These channels enhance the customer experience through:

- Multi-Channel Presence: Providing customers with convenient access to Shopee

products regardless of their preferred platform

- Personalized Experience: Using customer data and preferences to personalize

recommendations, promotions, and content for each individual

- Seamless Transactions: Providing secure and convenient payment options with

real-time order tracking to create peace of mind

- Community and Engagement: Creating a sense of community through social media

interaction, reviews, and content

Image 2 Top E-Commerce Site in Vietnam 2022 in

2.4 Customer Relationships

Shopee have various policies to maintain and build good relationships, including:

- Customer Support: Shopee provides customer support services via phone, email, and

online chat to address issues such as order placement problems, inability to apply discount codes, lack of order updates, or refund policies

- Shopee Chat: Notifies customers of special promotions, discounts, significant sale

days, or items on sale in their shopping carts

- Product Returns: For damaged or incorrectly delivered products due to the carrier or

seller, customers can contact the seller to initiate the return process

- Safe Shopping: Shopee provides fraud alerts and essential information for using

services such as "Fraud Warning - Avoid traps before responding to Shopee recruitment messages."

- Product Warranty Policy: Authorized sellers enjoy warranty policies For example,

the warranty policy for Xiaomi Redmi Note 12 phones:

- Promotional Programs: Shopee offers special programs on holidays and double days

with various benefits such as free shipping vouchers, percentage discounts,

- Convenient Payment: Shopee offers multiple payment methods to meet consumer

needs, including cash on delivery, or pay via ShopeePay

- Shopee Coins: Customers can earn Shopee Coins through various programs such as

shaking for coins, providing feedback on products, and cashback For example, 20,000 Shopee Coins have a value of 20,000 VND, customers can use them to purchase

Image 3 The Warranty Policy of Xiaomi Redmi Note 12 Phones

- Shopee Live: Livestream provides customers with a more realistic view of products

along with various promotional codes during each Live session (such as Free Shipping codes, 20% discount up to 30K VND, etc.)

- Loyalty Program: Each customer, based on the quantity of orders and spending

criteria, can be upgraded to different membership levels (gold, silver, diamond), and each level comes with exclusive vouchers (e.g., gold members receive a 7% discount voucher on orders over 300K VND)

• The Impact of Customer Feedback on Company Operations and Offerings:

- Improving Service Quality: Feedback helps Shopee identify strengths and

weaknesses in its services, leading to measures for better shopping experiences

- Building Brand Image: Positive feedback helps Shopee build a reputable and

trustworthy brand image, reassuring customers to use the service with confidence

2.5 Revenue Streams

Shopee primarily generates revenue from sellers and does not charge buyers Revenue from buyers is usually generated through the transactions facilitated on the platform

- Service Fees: These fees are paid when participating in programs like Extra Coins

Back and Free Shipping Extra/Plus

- Registration Fees: Sellers pay registration fees to join programs like Extra Voucher,

Free Shipping Extra, Free Shipping Extra Plus For example, the registration fee for Extra Voucher, Free Shipping Extra Plus is 1,000 VND

- Payment Fees: Transaction fees of 4% for each successful order or orders with

"Return/Refund" requests that the seller accepts This fee applies to all sellers

- Fixed Fees: This fee is applied when the order is successfully delivered or refunded

For non-Shopee Mall sellers, the fee is 3%, Shopee Mall sellers have percentage fees based on the product category

- Advertising Fees: Shopee provides various advertising packages, such as Shop Ads

For instance, the ads appear in the search results page when buyers use keywords set

by sellers

• Innovative Revenue Generation Strategies:

- International Market Expansion: Shopee can expand into new countries This

involves integrating translation services and multilingualism This strategic move is expected to increase revenue by tapping into multiple global markets

- Diversification of Seller Advertising: Introduce new advertising formats, such as

pop-up ads, banners, videos, etc For instance, when customers visit the Shopee homepage, product images could automatically pop up on the screen

2.6 Key Resources

- Brand: Shopee is a leading e-commerce brand in Vietnam with high brand recognition

This helps easy access to a large customer base and market expansion

- Technology Platform: Shopee possesses a robust technological platform capable of

handling large transaction volumes swiftly and reliably

- Payment System: Shopee has a secure and reliable payment system with various

payment methods to process online transactions effectively

- Human Resources: The workforce has a skilled specializing in e-commerce This

expertise aids in the efficient development and operation of the business model

- In Terms of Financial Backing: Shopee is supported by Sea Group, so they can invest

in development and market expansion, leveraging its strong financial position

2.7 Key Activities

• Developing and Managing the Platform

Shopee has invested in prioritizing user and business shopping and selling experience They concentrate on enhancing the interface, features, and security for a seamless, user-friendly experience

• Marketing and Advertising

Shopee focuses on creative marketing strategies, targeting young, dynamic consumers, aiming for virality, and catching the trend Collaborating frequently with celebrities to boost recognition and engagement Specifically, they collaborate with celebrities like Bui Tien Dung and Bao Anh to launch TVC "Gi Cung Co, Mua Het O Shopee" or slogans like

"Thich Shopping, Luot Shopee" with Son Tung M-TP Furthermore, Shopee's monthly Super Sale events, like 9.9, 11.11, and 12.12, have been remarkably successful, creating high anticipation among customers

• R&D

Shopee invests in R&D to sustain innovation and service development They analyze market trends and user data to improve their platform, develop new features and advanced technologies to enhance user experience Some recently developed services include: Shopee Mall, Shopee Free Shipping Xtra, Shopee Pay, Shopee Food, Shopee Live, Shopee PayLater, Shopee Rewards, etc

• Promotion

Shopee regularly organizes promotional programs such as Super Sale, Flash Sale, Free Shipping, etc Additionally, there is the Shopee Coins feature that allows customers to accumulate coins for purchases or to redeem other rewards Shopee Game allows users to play to earn Coins or discount vouchers, enhancing their experience on the platform

• Logistics and Fulfillment

Shopee invests in an efficient logistics system for fast and reliable deliveries Collaborating with logistics partners and establishing order processing centers optimizes the shipping and fulfillment process They also offer free intra-city delivery starting at 0 VND via Shopee Express, enticing new customers and increasing sales volume

• Customer Care

Shopee focuses on providing customer care service This activity supports both users and businesses with inquiries, feedback, or complaints Shopee offers 24/7 customer service through various channels, including: Live chat, Phone support, Email, Help center

• Payment

Shopee provides secure payment choices like COD, Shopee Pay, cards, and bank transfers Their platform ensures safety using SSL encryption system, Two-Factor Authentication (2FA), and transaction monitoring systems for user payment information

2.8 Key Partnerships

• Retailers and Sellers

The seller provides products and services to sell on the Shopee platform This may be an online store of individuals or small businesses

- Advantages: Sellers diversify the product range, enhancing consumer satisfaction and

shopping options on Shopee

- Challenges: Managing numerous sellers across different regions may present

challenges in maintaining product quality, authenticity, and adherence to platform policies

- Challenges: Logistics partnerships may have trouble with delays, or logistical

complexities in certain regions

• Payment Service Providers

Payment partners such as Vietcombank, BIDV, MB Bank, provide diverse and safe payment methods for users on the Shopee platform