Should Shopee and Lazada end their mega sale events?

The Checkout is Tech in Asia’s free newsletter that breaks down the biggest stories and trends in ecommerce. [Read from your browser]( Welcome to The Checkout! Delivered every Thursday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in ecommerce. If you’re not a subscriber, get access by [registering here](. Hello {NAME} You probably came across some online deals on different marketplaces last Sunday. That’s because it was the 8.8 sale day. In the Covid-19 era, online shoppers often have no time to breathe. There are, after all, flash sales on 8.8, 9.9, 10.10, 11.11, and so on. Consumers are probably not complaining, though. What do you have to lose if an enticing item is being sold at 50% off? Since Alibaba’s Singles Day became a thing, flash sales have become staples of online marketplaces in Southeast Asia. Many customers have their eyes glued to their shopping apps days - even weeks - prior to the actual sale event. Some even hold off on making purchases to wait for the upcoming sale. Which is why the recent [proposed rules in India]( to ban flash sales could be a game changer - not just for online marketplaces and the millions of third-party sellers and brands but also for price-conscious consumers who have grown accustomed to getting the best bargains. In this week’s big story, we look at how online marketplaces like Lazada and Shopee have become reliant on flash sales. These platforms have succeeded in attracting millions of customers, but with at least one event taking place every month, are they reaching their peak? -- Melissa THE BIG STORY  [When will mega sale events outlive their usefulness?]( Image credit: Timmy Loen Flash sales have been drawing in savvy shoppers to online marketplaces. But what would happen if ecommerce players dropped these events? DEEP READS 1️⃣ [The Pinduoduo model takes hold in India]( Photo credit: 123rf Southeast Asia wants to replicate Pinduoduo’s success, as we [previously explained](. A similar trend is also unfolding in India. As the next wave of shoppers in the country’s Tier 2 and Tier 3 cities - 400 million of them - come online, India-based social ecommerce startup [Gobillion]( is banking on the element of trust and recommendations, which shape many of these consumers’ existing purchasing habits, to get ahead. Launched in February this year, the Y Combinator-backed company uses a group-buy model similar to that of its Chinese counterpart Pinduoduo, where customers share product links with friends and family via WhatsApp in order to access lower prices on items bought in bulk. Interestingly, Gobillion’s founders have no ambitions of expanding to metro cities. Can this model recreate the same magic in India? 2️⃣ [Visual: Bukalapak’s decade-long journey to IPO]( Last week, online marketplace Bukalapak [raised US$1.5 billion]( in what was the largest initial public offering in the Indonesian bourse’s history. This comes as the Covid-19 pandemic boosted demand in the region’s largest ecommerce market. In this visual story, we dissect how the company’s product offerings have evolved over the last decade or so. 3️⃣ [When Amazon customers leave negative reviews, some sellers hunt them down]( Photo credit: 123rf Some sellers on Amazon are reaching out to unhappy buyers to have them revise or delete their negative reviews, in exchange for refunds or gift cards, despite it being a violation of terms on the online marketplace. Customer data, including their email addresses, are supposed to be shielded from third-party sellers that fulfill orders via Amazon. Brands that can reach out to customers through Amazon’s messaging service are also not supposed to be asking customers to remove negative reviews. TRENDING NEWS Check out Tech in Asia’s coverage of Asia’s ecommerce scene [here](. 1️⃣ [Amazon to introduce 0.5% surcharge for Visa credit card transactions in Singapore from September 15]( The US ecommerce giant has announced that it will impose a 0.5% surcharge on Visa credit card transactions on its Singapore website, Amazon.sg, starting September 15. Singapore is the first country where this surcharge will be imposed, and Amazon has attributed the move to Visa’s high cost of payments. Why it matters: The high cost of accepting credit card payments continues to be an obstacle toward the adoption of cashless payments for many merchants. Amazon isn’t the first company to start passing on the cost of these fees to the consumers as a result - [Grab has been doing this]( since June, while multi-currency e-wallet [YouTrip also began]( charging a S$1 processing fee this month on top-ups made via Visa credit cards. 2️⃣ [Alibaba fires manager amid sexual assault probe]( Photo credit: 123rf On Monday, Alibaba fired a manager accused of sexual assault. The victim recounted what happened in a widely shared post on Chinese social media. The female employee, who had earlier reported the incident and demanded that the manager be fired, also accused several Alibaba managers of mishandling the matter. Why it matters: This is the latest in a series of setbacks that the Chinese ecommerce titan has had to face. Among the issues it has had to contend with is a regulatory crackdown that has curbed the dominance of its fintech unit, Ant Group, in online payments, as well as government policies enacted to curb data collection and excessive subsidies. Last week, Alibaba [posted]( a revenue of US$31.8 billion, [missing estimates]( for the first time in two years. The stripping down of Alibaba and Tencent’s largely closed ecosystems, or so-called “walled gardens,” could see the ecommerce titan’s dominance in the industry further erode. According to Bloomberg, Alibaba has applied to create a mini app for its Taobao Deals platform on Tencent’s WeChat service. It’s also considering letting customers use WeChat Pay on Taobao and Tmall, the Wall Street Journal reported.  3️⃣ [Shein terminates operations in Indonesia]( The cross-border fashion ecommerce firm said on its Indonesian website that it ceased operations in the country on July 29, despite hardly having any employees there in the first place, according to our search on Linkedin. While Shein formally set up its operations in the region with the [opening of its Singapore office]( in June, it’s unclear whether Southeast Asia is a strategic market for the Chinese ecommerce firm. Just this week, Shein also came under fire in the UK for allegedly [making false statements]( on its websites that its working conditions were certified by international labor standards bodies. Why it matters: Shein’s cessation of its services in Indonesia, which some speculate is due to Indonesia’s [upcoming regulations to restrict imports and protect local ecommerce sellers]( offers some reprieve for local and regional ecommerce players, including Tokopedia, Lazada, and Shopee. Having perfected its cross-border retail model in the fashion category, Shein has moved into other product verticals including home decor, baby clothing, and pet supplies. As we [noted in our deep dive into the company]( it’s possible that Shein will eventually move toward a marketplace model. 4️⃣ [Amazon, Walmart unit face India antitrust probe on court order]( Photo credit: moovstock / 123RF Stock Photo Amazon India and Walmart-owned Flipkart are facing an antitrust investigation by India’s Supreme Court for allegedly abusing their dominance by offering deep discounts and preferential treatment to some vendors. Why it matters: The outcome of the investigation would affect millions of brick-and-mortar traders and small sellers that are struggling to compete against larger online retailers. JioMart, the rising ecommerce venture of billionaire Mukesh Ambani’s Reliance Jio Platforms, will also be watching the developments keenly. Reliance’s JioMart is [scaling rapidly](. A move [to embed]( the JioMart app into WhatsApp will instantly boost its reach to the messaging app’s 400 million users. JioMart also [reportedly]( has plans to expand to more than a thousand districts in one year, while widening its product categories to include electronics and office supplies, challenging Amazon and Flipkart’s dominance in the country’s online retail space. STARTUP WATCH 1️⃣ [SoftBank co-leads $1.5b round of Alibaba-backed Turkish ecommerce firm]( [Trendyol]( an ecommerce platform based in Turkey, has raised US$1.5 billion in a massive funding round. The fundraise values the company at US$16.5 billion, making it the country’s first decacorn. Founded in 2010, the firm has over 30 million users and delivers over 1 million packages per day. The “super app” also boasts its own last-mile and courier delivery solution, digital payment offering, grocery and food delivery service, as well as a consumer-to-consumer channel. 2️⃣ [Vietnamese ecommerce firm Tiki raises $20m from Taiwan Mobile]( The round is a joining of forces between [Tiki]( the Vietnam-based ecommerce company founded in 2010, and Taiwan Mobile’s ecommerce platform [Momo]( (Not to be confused with Vietnam-based payment app MoMo). Together, both companies will be exploring potential partnerships and new growth opportunities beyond Vietnam. We explored Momo’s regional ambitions [in this earlier story](. That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? 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