Starting an E-Commerce Startup Like Lazada, Is It a Good Idea?

datamaya

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For you who don't know Lazada, it's an e-commerce giant especially in SE Asia countries like Thailand, Indonesia, Philippine, etc, selling 1001 items from smartphones to daily stuff. Recently, Lazada is acquired by another giant, Alibaba.

Running a business in web development field, many of my clients come to me with an idea to start a business similar to Lazada (that is what they always refer to), as if there were no any type of online business to do. Although I work in digital business, deep in my heart I silently don't always agree if it's a good idea.

Here are my arguments:

1. Most people only see the good parts of Lazada: high traffic, reputable, a lot of customers, online business without inventory (which means low cost), etc.

2. What people don't see is:

- It's still NOT profitable
- The marketing budget is terribly high
- Human resource cost is very high
- The sales depends on quantity with low-margins.

3. It takes a long time to build a sophisticated e-commerce engine like Lazada with continuous improvement and bugs fixing, and most clients only see the front-end parts and they think it should be easy to develop with at least 6 months period of time. Some even believe Wordpress could do the job.

4. This kind of business is very vulnerable with red-ocean competition since it's difficult to offers strong differentiation and uniqueness. As we know it, this scenario usually ends up in price war.


I've also seen some brands that used to be offline retailers and try to jump to this venture and they don't succeed. What do you think about this? Is it a prospective business idea or is it just me too skepticism? Let's discuss here :)
 

learn2do

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I also know about Lazada, they are leading the e-commerce market in my country. But everyone knows that they don't have profit. Depend on high budget, they poor money into advertising campaigns, with the hope that they can erase almost all other brand images in the market. Without better price, better product and customer services, how can you get customer when there always be competitors like Lazada in the market?
So, in my opinion, if you want to start an e-commerce startup, you have to choose a very, very special niche, with something unique and can't be copied.
 

Developer

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By doing exactly what you went on to say... by offering something completely different, unique and hard to duplicate. ANYTHING and ANYONE can be successful, NO MATTER how much competition there is out there. You just have to "fight for your spot" and "go for it".
 

datamaya

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datamaya
Do you have any ideas of what niche that is unique and can't be copied? :)
 

learn2do

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learn2do
That's the problem :). I've never found out a perfect solution. I used to think about selling hand-made souvenirs. But honestly, right now it's still too hard for me to build an e-commerce site. Working in affiliate field is easier :)
 

markbatham

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Actually you got your answer in your questions.
If you know the points under "What people don't see is" then if you are planning to start eCommerce like Lazada, your primery focus should be the points you raised.
This should be your eCommerce USP and if you can maintain this then definitely people get noticed. But remember it is tough but not IMPOSSIBLE.

So go ahead with positive attitude, all the best.
 

WildSpirit

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I've heard (especially by some friends who are always up to date in this type of financial market) and already read a lot of good things (usually in forums about finances) about "Lazada" and it seems to be a great way to start your own business.

I think the field of e-commerce as a whole is something that can be extremely profitable, as long as it is planned with care and a lot of attention. But unfortunately, this is not what most people do, and the result of that is the bankruptcy of something that has not even had a chance to start properly.
 

CookieRunner

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I know Lazada and I am a customer of Lazada. I did not know that they have this kind of problems huh. Not everyone knows that they don'y profit, including me... hmmm.. Maybe I need to do more research and all. Since it's a well known online shop, I can't believe that you have this information. I just knew that they're a big Online Business, has several products to choose from and assume that they get many customers. This is new to me and it sounds interesting.
 

Nancy G

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I believe no business will be a success "overnight." You really have to find the right combination in marketing: product, price, place of distribution and your people (market and resources).

You do e-commerce to get the exposure and support you need unless you are ready to go solo or a standalone website. You acquire your experience in knowing your market better, beating competition, shipping, payment processing and customer servicing (especially handling disputes or difficult situations). It takes time to find the right combination. You may need a lot of patience and business creativity to get the magic sales formula which often comes when you least expected or at the brink of quitting.

There are people who may succeed in e-commerce and others who may find their luck elsewhere.
 

Kal K

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According to me, you can start building a site like Lazada and it is not too hard to do, there are many WP themes + Wooecommerce plugin to create a same one, the problem is it is not a good idea if you don't have bugdet to grow your site, because it requires high budget for creating content, marketing, products...etc.

Also, this idea is not new and more sites created sites like that but no more are succeeful, because as said, you need to invest more money, time and efforts for such site while the success you can not guess.
 

Judas2018

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Getting into the e-commerce arena is always a good move in this day and age. As long as you're selling products and items people want, at a fair or competitive price... you should do fine for starters. Just be sure your shipping and payment methods are solid. Lost packages, damaged items or grueling purchase disputes can sink this sort of endeavor very quickly.
 

archetypechasingXX

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If you are supplying a need or passion, then you will do fine. The thing is that you won't be successful overnight, that's a myth, because it will take hard work to get to the top, especially in your case, because you want to rival an eCommerce giant like Lazada. It will take time, but it is certainly possible.
It is a profitable business, of course, but you also need to take into account that Alibaba invests plenty of cash into Lazada and they have partnerships with platforms like RebateMango. However, if you want to simply make your store successful, then you need to stick to the basics, track everything you and your customers do and optimize as necessary.
 

louis philip

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Of course. It is a good idea to start an e-commerce business. Today the Internet and mobile phones influence the people across the globe. Above all, setting up an ecommerce website become hassle free, because many readymade ecommerce solutions with best price are available to ease our job.
 

Josephine Alberto

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As per your opinion lazarda not get more profit. but you can if you try. you just don't need any special niche because you can't get enough customers. you have to sell each and every types of stuff that benefits you. at the beginning point, you don't get profits but after some time, when your brand become famous you will earn a profit.
 
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