Shopee, TikTok Shop issue new policies, online shop owners 'disillusioned'

On her personal Facebook, Ms. Van - the owner of an online household goods store in Hanoi - shared the unhappy story that from April 1, she will have to increase the prices of many items on Shopee. At the same time, she encourages everyone to buy products through the store's website or Facebook, she will support the shipping fee.

"I think I have to stop selling on Shopee," she said.

“Fees keep increasing, product prices have to decrease to compete, so how do sellers calculate?”, Mr. Thanh (shop owner on Shopee) complained on a sales community.

According to Mr. Thanh, with the costs of the floor, if the product price is not increased by 30%, it is impossible to make a profit. A product costs about 500,000 VND, including the costs that the buyer has to pay, it is nearly 600,000 VND. If there is a discount code for shipping and vouchers, it is still quite high. Buyers will consider finding a cheaper place.

As for his store, if he sells a few dozen orders a day, he will definitely lose money. To survive, shop owners like Mr. Thanh can return to selling on their personal Facebook pages to save costs.

According to Shopee's announcement, from April 1, this platform will change the fixed fee for each product category. In which, the voucher and service group will increase by 6%; the health group including functional foods, medical supplies and personal care will increase by 5.5% (from 4% to 9.5%), many other important product categories will also have a fee increase of 4 - 6%.

In addition, Shopee no longer has the Freeship Xtra policy and requires sellers to pay return shipping fees, causing additional financial pressure.

Not only Shopee, from April 1, TikTok Shop also officially applied a new platform commission fee schedule. The commission fee for sellers will usually increase from an average of 3% to 4%.

For sellers in the Shop Mall segment, commission fees will be significantly adjusted, increasing from the current maximum of 4.54 - 5.78% to a new level of 6.05 - 7.7%.

Ms. Thu Hoai (online business on TikTok Shop in Hanoi), analyzed that sellers are having to bear many costs such as 5% floor fee, shipping fee, tax, advertising fee, affiliate fee, incentive program fee and other operating costs. Now TikTok Shop increasing commission fee can greatly affect business.

According to Ms. Hoai, after applying the new commission fee, the total cost that sellers have to bear can account for a large proportion of the product selling price. Therefore, sellers need to consider carefully when setting the selling price and adjust their business strategy accordingly.

“To ensure costs, sellers have to increase product prices so that they are no longer competitive, which means that customers will sooner or later find cheaper places,” said Ms. Hoai.

Previously, since February, Lazada has also increased the discount. Specifically, the fixed fee increased to 4%, previously 3%. The Freeship package has been reduced to 6% of the order value, but is no longer free of fixed fees. Thereby, sellers have to share about 15% of revenue with the platform, 2% higher than before.

The reasons for the increased costs were stated by all e-commerce platforms, who said they had carefully considered the issue to ensure the rights of both buyers and sellers. This shows that doing business on e-commerce platforms is no longer easy. Many online shop owners have to struggle to survive on e-commerce platforms, or close down due to increasing costs.

Mr. Vu Cong Hoc, an e-commerce business expert, said that when there is a large number of customers and sellers, the platforms will increase fees. This is a common trend and will probably continue to be adjusted in the coming time to ensure profits for the platforms in the "money burning" race over the past years.

According to the Department of E-commerce and Digital Economy (Ministry of Industry and Trade), in 2024, the size of Vietnam's e-commerce market will reach over 25 billion USD, an increase of 20% compared to 2023 and accounting for about 9% of total retail sales of goods and consumer service revenue nationwide.

Combined, the four largest platforms, Shopee, TikTok Shop, Lazada and Tiki, have a total transaction value (GMV) of nearly $14 billion in 2024, up 40% from 2023. E-commerce data analytics company YouNet predicts that the market size will reach $49.9 billion by 2028.

The platforms have spent a lot of money to invest in infrastructure, attract customers, launch promotional programs,... now it's time for them to reap the rewards. Meanwhile, e-commerce in Vietnam is growing like mushrooms, platforms are opening one after another, competition is fierce, if they don't have enough strength, they can leave immediately.

According to Mr. Hoc, recently, many exchanges have had to cut staff and costs to operate and survive in Vietnam, while new names are trying to jump in, making the competition even more fierce.

Mr. Hoc predicts that in the near future, when the authorities strictly control the collection of online sales tax, the platforms will increase fees, and online sales will no longer be as easy to make money as before. Shop owners will be forced to choose a platform to stick with for the long term, and will not easily move from one platform to another to benefit.