Is Bidding for Internal Traffic Enough to Scale Your Marketplace Store?
Consumer appetite for online shopping is on an exponential rise. Involve Asia foresees a whopping USD 200 billion total market opportunity in the emerging South East Asia market alone by 2025!
Suppose you have a store on Lazada, Shopee or Tokopedia. In that case, you’d probably notice a declining trend in sales as an influx of sellers flood the online marketplaces to get a slice of your pie.
For you to beat your competitors, the first order of business is to understand what exactly they are doing.
In this article, we’ll explain the two causes of intense competition in your marketplace store and what you can do about it.
This is how your marketplace store competitors are bidding for internal traffic on a Cost Per Click (CPC) basis to outsell you:
1. Marketplace home page placements
2. Sponsored search
3. In-marketplace ads
Internal marketplace solutions have 2 limitations that hamper the growth of your marketplace store on a large scale:
1. Internal traffic is limited and is something out of your control
2. You are unable to fine-tune your marketing campaign.
Now that you have a holistic view of this topic. Let’s dive into the details:
Bidding for Internal Traffic
Brands (your competitors) are bidding for shopper’s attention who are actively browsing on the marketplace platform (Shopee, Lazada and Tokopedia).
Just like bidding for Google and Facebook Ad keywords, Lazada, Shopee, and Tokopedia have their versions of internal advertising, like Marketplace Home Page Placements, Sponsored Search, and In-Market Ads.
Let’s start with the first one:
Marketplace Home Page Placements
You don’t have to look far. Your biggest competitors are most likely right next door.
Major marketplace stores are paying top dollar to be in immediate reach of your target customers, usually on the front page of the app or website.
Major brands are in head to head competition, and consumers can compare prices right then and there without clicking on anything.
Take a look at the screenshot below:
Major brand store competition on the homepage of the marketplace
Competing for these spots against major brand stores can get very, very expensive.
Besides the home page, let’s see what else are your competitors up to:
Similar concept to Google Ads, some marketplace such as Shopee has an internal paid ad solution to help marketplace sellers get more exposure.
The bidder will pay each time a visitor clicks on these ads; this is often called (Pay Per Click).
Look at the screenshot below to see ‘Shopee ads’ in action:
Sample of Pay Per Click (PPC) on Shopee ads. Keyword ads (left) and Shop ad (right)
Another way your competitors are paying for internal traffic is through sponsored search.
When customers click on the search bar on the marketplace app, there will be a ‘sponsored search’ area at the bottom of the search prompt.
The bidder will pay each time a visitor clicks on these sponsored searchs (Pay Per Click).
Take a look at the screenshot below to see what the ‘sponsored search’ would look like:
Example of sponsored search results
Internal Traffic Limitations For Your Marketplace Store
Internal traffic solutions are practical and could prove to benefit your marketplace business. But there are two apparent limitations that you should be aware of:
Internal Limitation 1: Internal traffic
Your competitors are paying for the attention of shoppers that are already browsing on the marketplace platform.
If you think about it, these are prospects that could have landed on your store sooner or later, even without bidding for it.
Internal Limitation 2: In Marketplace Restrictions
Scaling your target audience using marketplace in-house affiliate programs can be tough.
There’s usually no way you can fine-tune your target audience, or choose which specific Publisher you want to work with to promote your store.
Ideally, you’d want to narrow your target audience down, such as preferred content, device type, and location
Internal Traffic Limitation Wrap-Up