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Shopee Ads. Sharing of a FOUR MONTH Research

July 6, 2018

    
    In Feb 18, one of my members complained that shopee ads did not work, as the cost was more than 10% of the revenue, and revenue generated not significant. She claimed that my first post cannot "Pakai" - haiz. I got red face and malu hearing that.
     
    This started my four months research into Shopee My ads after my first post. she now concurred that Shopee ads work with the correct method.  

 

    We stop the ads temporary in mid FEB 18 after her complain. After analyzing the information available, we executed our action plan till in mid of Mar till end of Apr. Then for May and June, I let her manage herself to see if without me, will the method still works. 

 

What is the result?

 

This is the overall 6-month performance graph. 

 

 

     Well it is kinda confusing looking like that right? How do we know we had improve or not? 

 

     Thus first I will suggest you need to measure it in an excel of the major KPI as describe in my first blog.  (Note there is a stop in 2nd week of May because she forgot to top up! haiz)

 

      From this it is easier to have some conclusion.  Note: (ROI Increase % is compare to Jan 18 ROI. For example at Jun, the ROI of 34.52 is 441% higherr than Jan 17 ROI of 7.81)

 

a) The expense %  had dropped from 12.8% to 2.5-3.5%. ROI had increased from 7.71 to 26-35X.

 

b) Although we peaked at Apr 18 for this 2 KPI, the performance did not change too much, thus the method we developed was consistent.

 

c) The 3rd KPI will be Conversion Rate. She in fact had increased her conversion rate in this! Kudos!

 

d) Noticed that Impression dropped from 62k to 12.9k. In my opinion, Impression is not really a critical KPI. Its good if more people saw your listing. But it is more important for you to target your audience correctly to maximize your investment!

 

What about her total sales performance? This is combination of the sales from ads and not from ads. 

 

 

     This is another very good insight.

 

1) After we improved our ads in Mar, the sales increase by double percentage points each month!. By Jun, the Sales is 293% of Jan Sales!

 

 2) Although GMV generated by ads in May & Jun decreased compare to April, the total sales for May and June Still increased!

 

3) Well, this is not hard to understand. When the sales grew due to ads, it improve the conversion rate. It also gathered more feedback and positive reviews for the listings. Thus this piggyback to her listings' organic ranking! Subsequently it improved her listings position in organic search and she was able to grab more market share and sales.

 

4) Thus Shopee ads is very important for new sellers and new listings which does not have top listings. It is very hard for your listing to appear in first page, especially if there is tens of thousand of listing with same keywords as the new sellers listing. Shopee ads help built your organic ranking and penetrate the market. 

 

     Now remember this ROI is average of all listings. Whare are the best listing ROIs?

 

     1) This is a very impressive results of ROI for ads. Most of the top three listing achieve 3 digit ROI !!!! The best is in April whereby one listing achieved 220X of ROI for the whole month!. Such ROI was seldom heard in Facebook Ads or Google Ads. Most of the time you will see only double digit ROI at the most.

 

     2) But it is definitely getting more challenging to achieve good ROI, as Shopee ads is on a bidding platform. Just like Facebook and Google ads which was very cheap at start, the price will continue to go up. Thus learning how to target your customer correctly will be more critical in future! 

 

     From shopee Ads, we had deduce a good insight for this question.

 

     The position of a listing (example on top of the first page of the search result) determine the sales result or the sales result determine the position of a listing?

 

     It is like the Chicken and Egg question in eCommerce Marketplaces.

 

 

     Often when a listing is not selling in marketplaces like Lazada and Shopee, lots of sellers complained that their listing is not visible in the search result.  They believed it is because they are new and do not have "Kabel Kuat" internally in Lazada and Shopee, and they only take care of big brands and sellers.

 

     So at least Shopee my ads now allowed sellers to position themselves at the top of a search result. Then ho-sei Liao. With a top position on a search result, sales must be up up up!

 

    However as seen at the Jan 18 result. Her listings achieved 62k impression because of her paid ranking. Her listing wer at the top of first page! Yet the performance was not considered good.

 

     This show that the ranking of your listing don't really bring you sales. Only good and competitive listing can help you achieve good sales ranking!

 

      Internationally and Locally, I had noticed many grey techniques to grab good rankings. Some spam their listing with different keywords or with some minor alteration of the picture. Others use multiple account to list same products. We did it with ONE ACCOUNT only.

 

     Of course this doesn't mean that the grey method does not work completely. But there is another way also to compete.

 

     We did it by inserting "SOUL POWER" into oour product listings. 

 

     Please don't assume that the customers are stupid.  Shopee ads are not magic. Not that you paid for the top position, people buys from you. People buys from really good listing, just like good music.

 

     If your listing is at the top, yes, more people will see your listing and even click on it. However this COST YOU MONEY! But only very few will buy from you if there is better listings in that page also. 

 

     So from our experience, before you analyze the keywords, Please ensure that your listing is competitive compare to your competitors listing. Else customer will window shop and click on your listing but seldom buys it. 

 

Now come to a even more complex and tricky question.

 

     What is an Competitive NEW Listing (which has much lesser or no review compare to competitor established listing) ?

 

     The first common answer is always PRICE! Only with the lower price for the listing, a new listing had chance to compete with listing which had a lot of reviews.

 

     Undeniably, Price is a very powerful competitive edge. By all means, if you had the supply, volume, connection and money to achieve price advantage, go ahead. This is mostly done by big sellers. 

    But this KING is the MOST EASY TO COPY competitive advantage. Anybody can just win if they price their product lower. In fact our own marketplace has dropped their price to 0% commission between two because nothing is cheaper than free. 

 

     If you are not big sellers, I will suggest you to think twice. Because this might lead to a war of attrition (who had more to sacrifice) which you cannot afford. 

  

     Is there other possible way to compete? Yes!

 

      Again it is Soul Power of the listing hahaha. 

 

      See, I had met with readers before, and they debated with me on this matter. I had shown them listing which is strong in Soul Power and most of them are surprised of the ranking of the listing.  Sorry I cannot share this listings publicly, as these listings are not mine to share. Additionally if a lot of readers click on the listing and do not buy it, it will lower down the conversion rate and harm the listing ranking.

 

     I try my best to explain without an example. 

 

     I started by asking this member. Sell me your product. She started with my product is of Good Quality. 

 

     Then I asked, what is Good Quality and how is it better than your competitor. Is this good quality useful to your customer? .... Silent from her. So I sent her off to do her homework. I

 

      I gave a tip. Go and find the real customers which used this product and understand what is consider good quality.

 

     She went to the group and club which have people using the product. Soon she come back with a proposition. A lot of the customer complained that the product purchase online was too light and no stability。

 

     Aaaha. I knew at that instant she has found something solid. China seller in order to save cost, will always choose the lightest product to ship as it is cheapest. 

 

     So the next action is to check with her supplier on a solution to meet the customer requirement. 

 

      Voila! She found a product with the same dimension which is 30% heavier. However the price is only 10% difference compare to the lighter version.  If she ship in sea freight, it can bring down the cost compare to air freight!

 

Yes it is more expensive. But this is what customer wants!

 

So we executed the purchasing action and brought in the products. 

 

 

     After we had the product, It is time to highlight the difference. This picture is very powerful to show that Highlighting the difference can make a more expensive product win!

 

    But how do you do it in listing? Any suggestion from the readers haha?

 

    At now, the blog is already more than 1.7k words. Haha I still havent touch on myads and keywords. But I need to emphasize on the listing competitiveness because it wont work without this. 

 

Keep in tune of the 2nd part of this blog!

 

 

 

 

 

 

 

 

 

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