Alibaba’s Lazada removes commission fee in S’pore to boost transaction

Lazada continues its zero commission for sellers initiative looking to boost merchant acquisition numbers.

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Alibaba’s Lazada removes commission fee in S’pore to boost transaction

Almost five months after receiving an extra US$2 billion investment boost from Alibaba in mid-March, Southeast Asia e-tailer  Lazada is looking to scrap all commission charges for its marketplace sellers in Singapore, the firm announced in a press release today.

Previously, marketplace sellers in Singapore using its platform would be charged between one to seven per cent commission per sale, depending on the goods category.

Lazada boasts a base of 350,000 sellers across Southeast Asia selling consumer-facing goods such as electronics, apparel, sports equipment and more, according to the firm.

Aside from Singapore, the six-year-old firm has operations in Malaysia, Thailand, Indonesia, Vietnam and the Philippines. Lazada confirmed to KrASIA that the zero commission initiative has been rolled out across all markets.

A spokesperson representing Lazada said that while the company will not charge sellers any commission for the “first three years”, it is open to renewing this initiative.

According to the press release, Lazada predicts that sellers will reduce prices once the zero commission charges are in effect, further benefitting consumers with discounts.

This initiative to cancel out commission charges for all sellers across the region could give Lazada a push in terms of merchant and customer acquisition as well as transactions.

In Singapore, Lazada’s main competitors are Shopee, Carousell, and Qoo10. While Shopee and Carousell do not currently charge any seller commission fees, Qoo10 charges a seven to 12 per cent fee depending on the transaction amount and seller’s “profile”.

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As for its parent company Alibaba’s other consumer goods marketplace Taobao and Tmall, while Taobao does not charge any seller commission fees, Tmall does take a cut of the transaction, depending on the goods category.

UPDATE (1 August 2018) – We have updated this article with more information on where this initiative has been rolled out in, and whether Lazada is looking at making it a permanent policy.

Editor: Ben Jiang