Brands in Thailand are losing profit margins by over-investing in fragmented, bottom-of-funnel marketplace ads. Treating Shopee, Lazada, and TikTok Shop as isolated silos leads to budget cannibalization.
Yes, I know: ROAS on marketplaces is easy and clear to read, digest, and understand. Sometimes its performance is so outstanding that it is hard to disinvest. Last year, SILKEN Asia clients got and average ROAS of 13.96x in marketplace media planning (and growing this year so far). But not all the campaigns have good results!
There is one more reason that makes difficult, for brands, to reconsider how to invest on Shopee, Lazada, and TikTok Shop. Brands needs them. And the marketplaces know it, very well. So, they say: invest with us, and we will help you to gain visibility.
Consumers search products, compare prices, valuate promotions, directly on marketplaces. That’s for sure. However the consumer journey starts and proceeds in many directions: online, social media, offline. Move back and forward. And reverse.
Sustainable e-commerce growth requires that brands plan a unified media ecosystem. From top-of-funnel brand demand and awareness on multi-channels (off-platforms) to bottom-funnel marketplace capture and conversion (on-platforms).
As digital marketing agency and e-commerce enabler, we experience this several times. When a brand wants to invest only on-platforms, ignoring brand awareness and community building else where, they often don’t achieve the ROAS mentioned above.
Actually, shifting media budget to off-platform channels (like Meta CPAS, Google Shopping, targeted influencer seeding, and more) lowers on-platform customer acquisition costs.
Relying solely on internal marketplace ads during big and mega campaigns risk to destroy margins. Shopee and Lazada (less TikTok Shop at the moment) push brands to raise the media budget during the campaigns (and block the promotional prices). Often, this is not a pure suggestion. It is highly demanded if a brand does not want to loose the brand visibility on marketplace. Sometimes the risk is losing the relationship with marketplace team (KAM), when media budget is confused with a service fee to pay to marketplace.
As soon as the brand accepts the game (almost every time), it starts the pricing race (or war!) with brand competitors AND thousands, even more, non-authorized sellers
From the other side, the “newcomer” TikTok Shop, which overpassed Lazada already (based on SILKEN Asia clients), has lower bidding prices for many of its sponsored solutions. But high is the cost to create and generate contents that fit TikTok consumption.
We had clients that burn out trying to maintain daily contents. Without a centralized paid media strategy to boost top-performing contents, got difficult time to gain positive ROI among content creation and actual conversions.
People still “wasting” their daily time on many sites and apps. Time not dedicated to immediate purchase. Time that, however, a brand could get their attention. For a brand, specially it is a new!, is dangerous ignoring traditional digital branding.
Years ago we worked with an oral care brand from overseas. They entered the Thai market with a good potential positioning in terms of brand identity, pricing, and product quality. The presence in the market was exclusively online (Lazada and Shopee), and the media investment 100% on-platforms. Despite our vivid suggestion to invest on brand awareness, community building and contents off-platform, the brand decided to proceed on-platform only. Now this brand exited the market: no brand awareness at all.
The clients that approach come from two channels mainly: brands that are looking for a digital marketing agency (MOST 2414) able to create contents and wisely manage the media budget to their e-commerce, and e-commerce enabler (SILKEN Asia) able to operate end-to-end their stores.
It happens that they look for two agencies initially. When they understand that they can get both within two teams managed by the same company, it is a turning point.
Starting from the pitch, our teams (e-commerce and marketing) work separately for their skills, and then together to bridge media and e-commerce experience following commons goals and KPIs. The same approach will be kept during the operations.
The result is a sort of “tri-funnel budget blueprint” which can be summarize in the simplest way in three budget allocation (of course each brand has its own story, and we customize brand by brand):
The brand is new in Thailand. Or they launch on a new product. Or they just landed open the online store. High focus on awareness and trust. Focus on on-platform contents, and invest media off-platform
Phase 2: Growth & ScalingWe help brands to build a robust relationship with the marketplaces. Balancing demand with capture. Strengthening the bridge between online store operations with digital media and content presence on social media
Phase 3: Retention & DominanceIf dominance in the market depends from many factors, retention is vital to gain always more returning customers. Go back to Phase 1 to get new customers and turn them to become returning customers
