E-commerce Report: Competitive Advantage of Online Malls

This report provides a comprehensive analysis of two major online shopping malls, Lazada and Shopee. It begins with an introduction to their backgrounds, outlining their establishment, services, and target markets. The core of the report focuses on comparing their business models, specifically examining their use of Consumer-to-Consumer (C2C) and Business-to-Consumer (B2C) models, and highlighting their advantages. Furthermore, the report offers strategic recommendations for enhancing the competitive advantage of both platforms, focusing on aspects such as target audience engagement, marketing strategies, user-friendly interfaces, and customer loyalty programs. It also details the benefits of online malls for vendors and shoppers, including cost savings, price and feature comparisons, and time efficiency. Finally, the report discusses the advantages of using online malls versus search engines for shoppers, providing reasoned arguments for each approach.

ECOMMERCE
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Table of Contents
INTRODUCTION ..........................................................................................................................2
TASK ..............................................................................................................................................2
1. Introduction of the background of the selected two online shopping malls...........................2
2. Analysis of business model of the two online shopping malls...............................................3
3. Recommendations to improve competitive advantage...........................................................5
4. Benefits of online malls to vendors and shoppers...................................................................6
5. Reasons to use online malls or search engine.........................................................................8
CONCLUSION ...............................................................................................................................8
REFERENCES..............................................................................................................................10
INTRODUCTION
Electronic Commerce or better known as E-commerce is an online platform where people
can buy their goods or services according to their needs, requirements and companies can sell
their offerings fulfilling business objectives. It comprises of various facilities such as shopping,
payments, e-auctions, ticket booking, internet or online banking, and many more. Online
shopping mall is a combination of various types of shops offering different kinds of products and
services on an online platform which does not carries any physical outlets in market (Das and
Varshneya, 2017). In the present report two online shopping malls are being considered that is
Lazada and Shopee. Here various business models are described which are used by these two
online shopping malls along with some recommendations provided to both the firms in order to
improve their competitive advantage. Further in this report some benefits of online malls for
vendors and shoppers are listed with their reasons to use such malls or search engine.
TASK
1. Introduction of the background of the selected two online shopping malls.
Lazada
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Lazada is an online shopping mall offering various kinds of products and services 24*7
for customers. The mall started its operation in year 2012 as an e-commerce platform offering its
services in Malaysia, Indonesia, Philippines, Singapore, Vietnam and Thailand. Lazada is a
regional flagship of Alibaba group since 2016 and uses its latest technological infrastructures for
operations.
Shopee
Shoppe is an e-commerce online shopping mall having its headquarter in Singapore being
established in year 2015.It serves its products in regions of Malaysia, Thailand, Brazil, Vietnam,
Indonesia, Taiwan and Philippines. Buyers can place their order via mobile app of Shoppe by
installing it on their android devices.
Basis Lazada Shoppe
Established in Year 2012 Year 2015
Offers Product Via Internet Website Mobile Application
Fees Charged from Sellers In a form of payment and
shipping fees
In a form of transaction and
service fees
Items Listing High efforts and tedious Medium efforts and easy
Delayed Shipping Penalty
charged
Charges $15 per delay Works on De-boosted posts
Traffic 31.29 million approx Approx 10.88 million
Value Preposition Affordable, Convenient and
Accessible.
Easy availability, free and fast
shipping.
Both Lazada and Shoppe are tough competitors of each other as they both offers identical
amenities to general public only having a mild different which made them different from each
other. Shoppe more focuses on mobile application then Lazada which makes it separates from its
competitors.
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2. Analysis of business model of the two online shopping malls.
There are various business models which every e-commerce company applies in their
operations such as Business to Business (B2B), Consumer to Consumer (C2C), Business to
consumer (B2C), Consumer to Business (C2B), and many more. Lazada and Shopee both uses
Consumer to Consumer that is C2C and Business to Consumers that is B2C which are described
under:
Consumer to Consumer (C2C): The model says that under this both sellers and buyers
are consumers. Companies here charges their fees from transaction and listing of items. Here
customer sells his product or services via third party who is a company showcases item to be
sold on its website and then sells to buyer who finds the product suitable and matching to his
demand (Heinemann, 2019). It includes offering of second hand items which are used by some
one else prior to the sales made under C2C category. Consumer now-a-days sometimes prefers to
buy such second hand items because of frequent changes in technology which does not allows
them to purchase latest products at frequent pace having high prices so prefers to buy used
products. This type of business model is very common and growing in today's world. In case of
C2C business payments are only allowed through online mode such as via credit or debit cards,
PayPal, etc. the quality and guarantee for product or of its accessories does not lie under the
accountability of online platform since it is only an intermediary between buyer and seller here.
Advantages of C2C- Consumer to consumer business model offers products and services
at low price as compared to offered via other forms as it reduces the cost of middleman, agents,
commission holders, etc. As there are lot of buyers available in market so it also provides a lot of
choice for selecting best suitable product to customers which satisfies their needs and
requirements (Kim and Lee, 2018). For sellers this model proves most profitable due to non
presence of agents or middleman which increases sellers profit margin ultimately leads to enjoy
higher profits.
Business to Consumer (B2C): This model says that there are two different parties
involved in trade that is business company and the other is consumer to fulfil whose purpose
firms offers their products and services. This form of business is categorised as traditional form
but in e-commerce business firms does not offers their goods and services via physical stores
rather they follow their tradition in offering products online (Kong and et. al., 2020). It involves
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direct sales by business organisations to the end users who are final consumers of product and
services. B2C firms collaborates or hires some people and agencies who acts as their delivery
agents in all parts of operations and delivers order items at customers set location. Such business
model is supported by updated and fine technological logistics along with strong supply chain.
Advantages of B2C- Business to consumer model provides numerous benefits to business
firms as well as to consumers. Since such businesses are available 27*4 across the globe so
offers their services at domestic as well as international level easily. Business firms under such
category does not involves physical stores or not requires establishment expenses which reduces
overheads costs and increases profit margin of companies (Kremez and et, al., 2019). For
consumers buying goods online under this model is very beneficial as online platforms provides
continuous tracking facility to those who places order on website for certain product. Buyers can
track their order process in tracking history and can know where their order has reached.
Lazada and Shopee both uses Consumer to Consumer (C2C) and Business to Consumer
(B2C) business model in their operations which proves a profitable and successful selection in
order to offer various products and services to customers globally.
3. Recommendations to improve competitive advantage.
Today is a world full of tough competition and now-a-days people are preferring buying
their products and services online due to its convenience and home delivery benefits. This leads
to high competition in market for e-commerce platforms over which every online platform wants
to win and survive in market. For this there are certain recommendations which online shopping
malls such as Lazada and Shopee can adopt in order to have competitive advantage either over
each other or over other rival firms. The recommendations are mentioned below:
 Online shopping malls should focus more on their target audience who are their core
customers and visits website frequently. The focus will allow malls to provide products
and services accordingly as per preference and demand of their niche customers. It is
recommended that while picking up target audience shops should not hurt the sentiments
and feelings of people irrespective of their cast, religion, ethics and morals etc.
 It is recommended to Lazada and Shopee that they should follow some unique or
different channel for marketing their website and its products or services which can cater
more and more customers also in area where the platform is not familiar or is not known
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by general public. This will increase their sales and offers high market share which will
give an competitive advantages to both the firms over their rivalries.
 Lazada and Shopee can use more and more social media platform to advertise their
website and mobile application in order to popularise their brand. In today's scenario
more and more people especially the youth is spending their most of time on social media
and on the other hand advertisements on social media encourages individual to go for
window shopping which increases sales on platform. Placing an advertisements on social
media platforms such as Facebook, Instagram, LinkedIn attracts people to visit website
and place order. This attraction can act as an competitive advantage for Lazada and
Shopee which will allow them to win over their competitors in market.
 It is to be recommended to Lazada and Shopee to develop user friendly and attractive
website or mobile application which does not looks tough or tricky while using it. Easy
application or website makes buyer more comfortable in accessing and searching for their
products and services, through which they can place their order more quickly. User
friendly interface attracts more and more customers to visit their platform and spend time
there. Such spending encourages visitors to buy something for them or for their peer
members. This helps Lazada and Shopee to gain competitive advantage over similar irms
in today's tough market.
 Lazada and Shopee can provide various offers or rewards to their prime customers or
frequent visitors in order to allow them feeling of belongingness and encourages them to
stay connected with their platform. They can also provide shopping vouchers or coupons
to them who shops for big amount or places huge order to motive them for future. This
can allow them to win over their rivals and gain competitive advantage.
4. Benefits of online malls to vendors and shoppers.
Online malls are proven very much beneficial for vendors as well as shoppers in many
ways. Online malls is an emerging platform of trade and commerce which is continuously
growing very frequently and is acting as growth component for economic development (Kumar
and Dutt, 2020). A world is of technology and sue to which most of the traditional businesses has
entered into market of online selling in which shopping mall is very common platform for doing
business. The advantage of online malls for vendors as well as for shoppers are listed below:
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 Cost Saving: The most important advantage is of cost saving. Online shopping does not
requires physical presence of either buyer or seller that means no one is required to spend
his or her expenses for selling and buying of products which saves cost of both parties
(Li, Zhao and Pu, 2020). Secondly shopping via online platforms such as malls does not
involves cost of travelling or cost of setting up physical store. When a person is not
required to visit store personally this means that he or she is not needed to reach store
which saves cost of travelling expenses. Cost is also saved from part of vendor as he is
not required to setup his store rather can sell his product directly which avoides various
expenses of vendor and allows them to enjoy high profit margin.
 Price and Feature Comparison: Online platforms allows buyer to compare price of
desired products with different brand or on various platforms which is not available in
physical stores. The price which is suitable and is in budget of consumer can place order
for same (Mao and et. al., 2021). On the other hand a customer can easily compare
product's features and characteristics while serving various platforms at same time.
Platform which offers best feature product with certain additions can be easily selected
by a consumer and can buy that no matter where the seller lives. These two benefits are
not present in offline shopping and does not provides an option of differentiated price and
unique features to buyers.
 Less time consuming: Online shopping provides a facility of serving website and
placing order as per the convenience of customers no matter at same time how many are
accessing same platform. Unlike physical stores it does not allows to stay in queue and
wait for their turn. Customers can place their order even millions of visitors are scrolling
or placing their order at same time (Martínez-López and D'Alessandro, 2020). Online
shopping malls are also beneficial at the time of festivals as during festive seasons mostly
people shops and during that time market seems to be very busy and collusive which is
not present in online stores. Staying away from such issues and placing order online
saves maximum time of consumers.
 Availability of variety of products: Since online shopping mall is a composition of
various shops that means there are some shops who offers same or identical products to
customers (Natarajan, 2017). The presence of online shopping mall provides varieties of
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products and variation with some different touch in same product. Buyer can see varieties
of same product at one time offered by different vendors which is not possible in
shopping offline because at one time a customer can visit only one store.
5. Reasons to use online malls or search engine.
Online malls refers to a place which can be accessed via internet where people buy and
sell numerous items under one roof. Search engine refers to an internet website with the help of
which people looks for their searches and finds their requirements. There are several reasons
available in order to use online malls or search engines which that are listed below:
 Convenient to use: Online shopping malls or search engines are very convenient to use
by general people as one does not need to get ready and drive vehicle in order to visit
shop for purchasing their stuffs (Pryor and et. al., 2017). Online malls does not requires
one to visit store personally rather they can shop at their convenience.
 24*7 availability: Online malls are not like physical stores which requires to close their
shops on specific time daily. Such malls are opened throughout the day and offers their
products and services 24*7 which means that buyers can access website at any time and
can place their order even after closing time of physical shops.
 Great Price: Online malls offers their products and services at prices lower then offered
by physical stores in market (Ribeiro and et. al., 2018). The reasons behind this is such as
public accesses internet websites in order to look for less costlier price products, and
availability of numerous online websites offering similar products, etc.
 Variety in Brands: Online shopping allows shopper to search for various branded
products just on one click which cannot be possible by visiting physical stores (Seo and
et. al., 2017). This provides a huge option to select a product out of them.
CONCLUSION
From the present report it can be easily concluded that E-commerce is a platform where
numerous or every goods and services are sold and bought. Online shopping malls are emerging
concept in field of e-commerce which is a fastest growing market in today's world. They provide
various facilities and benefits to visitors, buyers as well as vendors. Business to Business (B2B)
and Consumer to Consumer (C2C) are most common business model which is adopted by big
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online shopping mall giants in their operations which makes them different from others and
provides huge benefit. Setting up of or selling via online shopping mall does not requires much
cost of establishment by seller or business man and also saves much time of consumer as well as
vendor both.
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REFERENCES
Books and Journals
Das, G. and Varshneya, G., 2017. Consumer emotions: Determinants and outcomes in a
shopping mall. Journal of Retailing and Consumer Services. 38. pp.177-185.
Heinemann, G., 2019. B2B eCommerce: Grundlagen, Geschäftsmodelle und Best Practices im
Business-to-Business Online-Handel. Springer-Verlag.
Kim, J. and Lee, J., 2018. The Effect of Emotional Responses to Out-of-Stock (OOS) Event
Experience in Online Shopping on Behavioral Responses. International Journal of
Costume and Fashion. 18(2). pp.85-100.
Kong and et. al., 2020. Cyber physical ecommerce logistics system: An implementation case in
Hong Kong. Computers & Industrial Engineering. 139. p.106170.
Kremez and et, al., 2019. Ecommerce structures for retail and service franchises: Ecommerce
implementation in mature franchise systems. Asia Pacific Journal of Marketing and
Logistics.
Kumar, A. and Dutt, V., 2020. CORONAVIRUS IMPACT ON MARKETING, ECOMMERCE
& ADVERTISING: A DEEP STUDY. Journal of Critical Reviews. 7(12). pp.4469-
4476.
Li, X., Zhao, X. and Pu, W., 2020. Measuring ease of use of mobile applications in e-commerce
retailing from the perspective of consumer online shopping behaviour patterns. Journal
of Retailing and Consumer Services. 55. p.102093.
Mao and et. al., 2021. Hybrid ecommerce recommendation model incorporating product
taxonomy and folksonomy. Knowledge-Based Systems. 214. p.106720.
Martínez-López, F.J. and D'Alessandro, S. eds., 2020. Advances in Digital Marketing and
eCommerce. Springer.
Natarajan, S., 2017. Method for rapid development of schedule controled networkable merchant
ecommerce sites. U.S. Patent 9,626,713.
Pryor and et. al., 2017, September. Creating content guidelines for consistent display of
information on an ecommerce website. In Proceedings of the Human Factors and
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Ergonomics Society Annual Meeting (Vol. 61, No. 1, pp. 1834-1838). Sage CA: Los
Angeles, CA: SAGE Publications.
Ribeiro and et. al., 2018, June. eCommerce business-to-business platform for the footwear
sector: The cluster of Felgueiras. In 2018 13th Iberian Conference on Information
Systems and Technologies (CISTI) (pp. 1-6). IEEE.
Seo and et. al., 2017. The Effect of Consumer Attitude on the Characteristics, Service Quality
and Repurchase Intention of the Agricultural Products Online Shopping Mall. Korean
Journal of Food Marketing Economics.
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