The more they sell, the more they lose. Businesses bitterly consider leaving e-commerce platforms.

E-commerce platforms Shopee and TikTok Shop are now following the Grab model from more than 10 years ago, gradually cutting back on rewards and promotions. Shopee and TikTok Shop have announced an increase in platform fees from April 1.

The sales house was spinning like a top.

Ms. Nguyen Ngoc Huong - founder of the brand Gotu Kola Quang Thanh, Deputy Director of Thien Nhien Viet Company, said that business on e-commerce platforms has exploded in recent years, and it is no longer strange for sellers to bring their products to the platform together. Many people consider e-commerce platforms as the main channel, starting a business from the platform and Quang Thanh is no exception to this trend.

It must be admitted that selling on e-commerce platforms not only brings revenue but also helps brands reach more users, and is also a basis for consumers to compare products.

But over the past year, the platforms have changed a lot, forcing sellers to constantly update information from the platform. For example, from around mid-2024, Shopee opened the feature of selling through Shopee Live, allowing buyers to post videos on the platform. Taxes and fees are updated every 3 months.

Ms. Huong said that from April 1, e-commerce platforms and digital platforms with payment functions will deduct, pay taxes on behalf of businesses and individual businesses, and declare deducted taxes. This forces both platforms and sellers to adjust their pricing strategies, increasing sales fees and product prices, affecting consumers' purchasing power.

At the same time, from April 1, Shopee and TikTok Shop will increase fixed fees for sellers from 1-10% depending on the product category and store. Shopee will also stop providing free support packages for other related sellers and collect a fixed fee for return shipping.

In particular, since the end of 2024, platforms have tended to focus strongly on improving the buyer experience, so recent regulations have been constantly updated and changed, especially issues that directly affect user experience, such as response rates, returned orders, and failed delivery orders.

"Such constant changes make it impossible for sellers like us to anticipate all the problems that may arise. Business strategies and plans must be updated to be flexible with changes on the platform. New policies and regulations make businesses have to be more careful in every step, and have to find the most optimal working process with the human resources situation, to avoid violations," said Ms. Ngoc Huong.

Recently, Shopee also has a regulation that sellers must pay the return fee (previously the platform paid) in the case of customers placing orders but not receiving them. This potentially poses a risk that sellers will have to pay additional unforeseen fees. It will also create unfair competition risks, when competitors cause disadvantages to sellers.

Another prominent problem is that the floor can suddenly delete products that have been sold by the shop for many years, causing the shop to lose sales and reviews, reducing the shop's competitive advantage and revenue significantly.

Founder of The Gioi Giay Mai Quoc Binh believes that selling on e-commerce platforms is a trend that cannot be ignored. That is why the continuous increase in fees, along with increasingly strict policies of the platforms for sellers, is inevitable, because Shopee or Tik Tok have become crowded, becoming indispensable "markets" for sellers.

According to Mr. Binh, current e-commerce platforms are following Grab's story.

"First, they generate a lot of traffic, billions of traffic per month, then invite sellers to put their products up for sale. They have already created a playground, invite customers to sell, and sellers just think simply like bringing goods to the market, having a stall then displaying goods for sale, very simple and convenient.

But in the past, there were three buyers for one seller, now three sellers have to compete for one customer. Moreover, when platforms reach a certain size, they have to optimize to find profits, and increasing fees is the first way they do it," said Mr. Binh.

Price war and poor quality goods from e-commerce platforms

CEO Nguyen Ngoc Luan, founder of the Meet More Coffee brand, said that the floors claim to protect consumers but in reality they are protecting the floor, with the style of stimulating consumers to buy as much as possible.

But businesses and sellers on the platform are stuck with all sorts of things. Among them, the platform allows customers to buy products but if they don't like them, they can return them, and the seller has to bear the cost of the recall.

"That is a big disadvantage even though businesses are paying a lot of costs to the platform. If we calculate the total costs to sell goods, it currently accounts for about 40-50% from platform fees, operating fees, payment fees, promotions... Not to mention that sellers have to advertise themselves and participate in the platform's promotional programs that continuously take place, but the goods are not easy to sell, but have to compete fiercely when fake, counterfeit, and low-quality goods are rampant," Mr. Luan calculated.

While with traditional stores, the cost of sales is only about 30%, but the seller can manage his customers.

Most notable, according to Mr. Luan, is the price race with continuous programs to reduce product prices to very low levels offered by the floor.

"The platform doesn't cost anything, just occasionally giving out free shipping. The business with the highest promotion gets pushed up, which is basically the position where the buyer sees it first.

For example, on March 8, the platform announced that Meet More would participate in the megasale program and had to reduce prices by 30%, but the business only reduced prices by 20%, so it only got a little "popular"... The seller who accepted a deeper discount obviously got a good position, the more promotions they had, the more they were pushed to a priority position," Mr. Luan added.

To sell products, promotions are launched in droves, together driving down prices. But the price race does not bring much benefit to consumers, but rather drives down the quality of products.

This businessman believes that sustainable manufacturing enterprises must invest in raw materials, product research, machinery, production lines, and production costs, and product prices in today's technological era are almost transparent. But when listed on the market, goods must be cheap, must be promoted, the cheaper the better.

E-commerce platforms have created a habit for users to demand cheap prices, but if the prices are too cheap, the quality cannot match.

Mr. Mai Quoc Binh gave an example of his paper industry, a product that looked exactly like the paper package of The Gioi Giay was advertised on the floor as genuine goods with a price of 12,000 VND. Meanwhile, the cost of production of this product was 32,000 VND. He bought it and opened it to see that the inside of the paper was very black, soft paper...

"I affirm that it is impossible to have delicious, cheap and high-quality products. Consumer culture must be convenient, convenient and suitable. When you go shopping, pick up a product and pay attention to the ingredients and features of the product to see if it is suitable for you, not to see if the price is cheaper than a certain product, if there are many promotions and then decide to buy it and not know if it is suitable for you. Your consumer mindset creates the quality of your product," Mr. Binh said.

Ms. Ngoc Huong believes that the price and fee policies and many other regulations of e-commerce platforms are squeezing sellers, forcing manufacturers to cut losses, and consumers to pay higher purchasing costs than before. If this continues, sellers will become increasingly exhausted, especially small sellers.

This is also the reason why Metric's 2024 Online Retail Market Report, recently released, shows that the number of stores generating orders on the 5 major platforms in the past year decreased by 20.25% - equivalent to 165,000 shops leaving e-commerce.

Sellers say the costs of doing business on the platform are getting higher and higher, while the price war is causing profits to fall. Leaving the platform is inevitable when the more you sell, the more you lose.