The online rumor that Lazada Thailand will be abandoned is untrue

As competition in Thailand’s e-commerce market intensifies, rumors suggest Alibaba might sell Lazada. However, Lazada Group quickly denied negotiating with Central Group and Charoen Pokphand Group for a sale. The rise of competitors like Shopee and social media platforms like TikTok has posed significant challenges for Lazada.

Sources in the e-commerce industry indicate that Shopee and Lazada incur additional logistics, marketing, and regional costs not fully reflected in their financial results. Currently, Shopee Thailand is more profitable than Lazada Thailand due to a business restructuring in early 2023, but both companies are unhappy with their financial performance and are actively seeking ways to boost revenue.

For Lazada, in order to cope with fierce market competition and profit pressure, the focus this year is to pay more attention to cost control. Lazada can take a series of measures to reduce operating costs, including optimizing logistics networks, reducing marketing expenses, etc. These measures can help Lazada improve its financial situation in the short term, but in the long run, it also needs ways to increase revenue, including opening up new markets and strengthening ties with suppliers.

Lazada Thailand

Lazada currently has sites in Malaysia, Indonesia, Thailand, Singapore, the Philippines and Vietnam.

65%-70% of online transactions on Lazada Thailand are paid on delivery. The emergence of this payment model has enabled Thai consumers to develop corresponding shopping habits. More and more consumers prefer to pay after receiving the goods, which provides them with a better shopping experience.

The advantages of the Lazada platform are mainly four points:

1. No arbitrary fines

Lazada also has corresponding policies for fines, but it mostly punishes sellers by reducing orders. For example, if the proportion or store health index exceeds the standard, half of the orders will be reduced in the next week. In addition, there are also punishment measures such as closing the store and signing up for training.

2. Perfect seller protection system

he platform only accepts returns and refunds for products that are misdescribed, under-delivered, sent to the wrong address, or damaged. When a merchant ships a product, the consumer has already paid Lazada, which effectively reduces the merchant’s financial risks.

3. No need to communicate directly with users

Compared to Taobao and AliExpress, which require spending a lot of time and hiring many online customer service representatives to chat with every customer, Lazada is much more straightforward. Customers submit orders, sellers arrange shipment, and payment is collected upon delivery, and it’s done.

4. No Commission

Lazada cross-border stores incur a 1%-4% commission and a 2% financial processing fee, while Lazada stores in Thailand have no handling fees, resulting in significant savings.

Not only that, Lazada has its own logistics system and often holds various promotional activities, allowing consumers to enjoy the most favorable prices and further attract consumers.

Lazada platform latest news and policies

The 2024 European Cup is gaining popularity, and Lazada announced it will be the first Southeast Asian e-commerce partner. During this partnership, Lazada will engage football fans with promotional events and host the BallSale from July 1 to 3, offering up to 70% discounts on sports goods and outdoor products, along with free delivery.

Recently, Lazada requires individual sellers to submit PP20, which is the tax registration certificate in Thailand. This policy has a significant impact on the business activities of sellers. First of all, this means that all individual sellers who sell goods on Lazada Thailand must pay 7% VAT. This is equivalent to the process of submitting company financial accounting for individual sellers, which may even be more complicated and costly than the company’s financial management. Because the highest standard of individual tax is 35%, the highest standard of Thai companies is generally 20%. For example, if a store earns 1 million per month, that’s 12 million per year. After accounting for input invoices, labor, and rental costs, personal profit is calculated as income minus costs, which is subject to income tax. If Lazada operators mishandle taxes, errors or negligence could lead to personal liability and potential bankruptcy. Thus, individual sellers on Lazada must submit a PP20 compliance report to avoid economic losses and legal risks.

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