Differentiation in eCommerce seems particularly difficult to accomplish. I still can’t tell the difference between Qoo10 and Lazada and, well, I don’t really care so long as they have what I want to buy. I spoke to Chain Vayakornchivit (pictured), spokesperson for Thai apparel eTailer Zilingo, about whether or not my impression is correct, and which eCommerce companies are actually doing a good job of standing out.
(The interview has been edited for brevity and clarity.)
Is differentiation more difficult in eCommerce?
Yes. Because of two things. Firstly, the market is really young – especially in Asia, and especially when you’re talking about the Lazada’s, ZALORA’s and Shopee’s of the world. The problem here is lots of competitors, which of course makes it harder to differentiate. Secondly, a lot of eCommerce players don’t have a storefront. eCommerce is restricted to desktop and mobile screens; H&M, however, has major stores everywhere. It’s hard to differentiate against that.
The impression I get from the bigger names in the industry – Qoo10, Lazada etc. – is that their differentiating factor is that they offer lots of products. However, I think they all seem to end up offering the same products with small variations in prices. Hence, how sustainable is it to use scale as a differentiator?
Well, having lots of products on your platform helps. Having 10 products is nowhere near as good as having 10,000. But, if you’re talking about the horizontal marketplaces (i.e. a marketplace that offers everything – like Qoo10) logistics/delivery is more important. For vertical marketplaces like Zilingo, the ability to search is more important. That’s why we have advanced visual search capabilities. Of course, the kind of SKUs you have is also important. Taking Zilingo as an example: We try to work smaller sellers, so having qualitatively different sorts of SKUs is also important.
Have you seen a mass-market eTailer that does a particularly good job of differentiating themselves?
Amazon. It fulfills on its promise of delivery – you can track your orders and they’re reliable.
But Amazon is an exception. What about others?
The market is nascent. We’re still waiting to see who will actually lead.
What about Rocket Internet: They clone other businesses. Is it a good strategy?
Their stuff doesn’t work every time. There is no substitute for exceptional leadership, a clear path to profitability, a contextualised understanding of the market and the right partners. That said, cloning isn’t unique to Rocket Internet. You can argue that every single eTail company is a clone of Amazon.
Zilingo’s Co-Founder, Ankiti Bose, is set to join more than 200 other e-commerce, retail and payments professionals speaking at Seamless Asia. For more information, download our brochure here, or go right ahead and register here.