Niche players chasing Shopee may find survival is enough

Shopee has morphed into a juggernaut in Southeast Asia just a decade after it was founded, and its strong grip on sellers partly accounts for why the ecommerce platform has been profitable for the past four quarters.

With TikTok Shop and Lazada also hiking their fees, sellers’ margins are getting squeezed across the region. So where else can merchants run? They could go directly to consumers, but that is an expensive approach.

Some argue that niche marketplaces could be an alternative if they could attract tightly-knit communities and lure sellers by taking lower commissions. However, others warn that they will first have to survive first.

If they get it right, though, niche platforms might give sellers some breathing room or even tempt shoppers away from the mass-market giants.

Tiny by default

Southeast Asia’s pool of niche marketplaces has always been narrow. Over the past year, even big names like classifieds platform Carousell and fashion-focused Zalora have resorted to layoffs.

The classic marketplace model is unforgiving, unless you’ve got billions to spare. Even US titan Amazon bled for nearly a decade before getting in the black.

If even the likes of Amazon and Shopee need to branch out, niche marketplaces can’t afford to stick to just being marketplaces.

Since 2020, Singapore-based Zalora has been offering ecommerce-enabling services for fashion brands, while Indonesian beauty marketplace Sociolla is staking its future on brick-and-mortar stores.

Financially, Zalora and Sociolla claim to have already reached profitability. Carousell, meanwhile, saw a slight improvement in 2024, with revenue rising 2.9% and losses narrowing 12.6% year on year.

These numbers, however, are modest compared to Shopee’s scale and revenue.

Niche marketplaces are smaller by default. For one, they are more selective with merchants. Bidu CEO San Lee (Ly Hach San) points out that unlike its larger counterparts, the Vietnamese fashion and beauty shopping app “doesn’t allow just anyone to sell.”

Survival first

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