Lazada Sellers Weigh Local Vs Crossborder Ecommerce Strategies

For aspiring entrepreneurs launching their e-commerce journey on Lazada, the choice between establishing a local store or a cross-border store presents a critical strategic decision. This analysis examines the key differences between these two models to help businesses select the optimal path for their operations.

I. Entry Requirements: Localization vs. Globalization

The registration conditions for Lazada local stores and cross-border stores differ significantly, influencing merchant selection.

Local Stores:

• Advantages: Significant traffic support and higher visibility in platform recommendations.
• Challenges: Require local bank accounts, phone numbers, and email addresses. International merchants must obtain relevant visas and establish local banking infrastructure.
• Logistics: Options include self-managed warehouses or partnerships with local distributors, offering flexibility but requiring substantial initial investment.
• Payments: Restricted to local bank accounts or approved third-party payment processors, with potential variations in settlement periods and security.

Cross-Border Stores:

• Advantages: Lower entry barriers requiring only domestic business licenses, corporate Alipay accounts, email, and phone numbers.
• Challenges: Reduced traffic support and intense competition.
• Logistics: Merchants ship to designated domestic sorting centers before Lazada handles international distribution, resulting in predictable costs but potentially longer delivery times.
• Payments: Multiple options including corporate Alipay, Payoneer, WorldFirst, and PingPong, offering convenience and financial security.

II. Operational Models: Precision vs. Volume

The early success of cross-border stores through mass product listings has diminished as Lazada prioritizes quality and service. The platform now encourages:

Cross-Border Store Evolution:

• Precision Operations: Market-specific product selection, targeted marketing, and enhanced customer service.
• Vertical Specialization: Focus on specific product categories to establish expertise and consumer trust.
• Brand Development: Trademark registration and brand storytelling to increase value perception.

Local Store Considerations:

• Price Competition: Influx of cross-border merchants employing volume strategies has intensified price pressures.
• Market Adaptation: Cross-border operational approaches may require significant modification for local market conditions.

III. Market Dynamics: Saturation vs. Opportunity

The cross-border marketplace has transitioned from opportunity-rich to highly competitive, while local stores maintain growth potential despite challenges.

Cross-Border Stores:

Face rising operational costs and shrinking margins, though strategic operators with resources can still succeed through differentiated approaches.

Local Stores:

Require navigation of linguistic, cultural, and logistical barriers but benefit from preferential platform treatment and lower competition, facilitating brand establishment.

IV. Strategic Recommendations

For new market entrants, cross-border stores remain the recommended starting point due to lower barriers and operational costs, providing valuable platform experience and market understanding. Established operators with local market expertise may consider direct entry into local store operations, recognizing the greater resource requirements.

V. Comparative Summary

The selection between local and cross-border store models should align with business capabilities and strategic objectives, as each presents distinct advantages tailored to different operational contexts.