⛔️5 Tips On How To Win The Competition On Lazada and Shopee

(Part 3) How to increase profit margin without increasing price and maintain our sales revenue?

In my part 2 post, I discussed about how I tweak my vouchers to increase my profit margin. Another way worth to look at is our marketing cost. What I meant here for our marketing cost is we should optimize our sponsored discovery and sponsored affiliate in Lazada.

I tracked my marketing cost every month and there’s one month last year that our marketing cost reached about 20% of my total revenue. No doubt, marketing cost is one of my highest expenses affecting my profit margin. Recent months, I managed to reduce my marketing cost to around 10% and at the same time getting higher revenue from our marketing.

Let me share more about sponsor affiliate first. I set my sponsor affiliate at 10% having the mindset of more marketers will grab my store to advertise. Sponsor affiliate actually good and more stable ROI as we only pay when there’re sales. There’s one month before 11.11 sales, I tried to set at 15% hoping to lure even more marketers grab my ads. Frankly speaking, from my experience 10% to 15% doesn’t makes much different in terms of the sales that we get. The difference is just your profit margin become thinner. Haha. Perhaps, we should just make the marketers life easier to upload more type banners for them to market. After that month, I reduced to 8% having heard that it’s the most optimized percentage that you can get from sponsored affiliate if you could afford more than what system suggest.

As for sponsor discovery, my ROI for my store last year is around 4. I realized it’s a bad ROI compare to results shown by many sifu here but my mindset previously is to treat sponsor discovery as marketing cost. What I gain is product ranking, rating and reviews. After that, I only balanced it back by getting sales with my organic traffic. Many people told me they are burning money using sponsor discovery. I personally thinking that maybe they did not advertise long enough. If you already have the data from sponsor discovery, there’s no secret.

There’s one thing that you need to take note is First Search Slot is not for everybody. It’s one of the major factor my ROI turning bad. Only turn it on if your product is highly competitive.

Anyway, why my ROI is just 4? Because I focused and aggressive on getting more impressions for my products and set my benchmark at 4. I just keep on running those keyword or product giving anything more than 4. Some I even increase the bid hoping to get more impressions. I stop the keywords or lower the bid for anything below 4. At the same time, we also need to add in more keywords to discover more winning keywords. How to choose keyword, I think many sifu in this community shared or teach in our lazada university class already.

For this year, I decided that 4 is not a good number for me already seeing my profit margin. I set my target at 10 now and currently I’m moving towards that number at around 7 to 8 using the same method.

Alibaba Bets Big On Local Delivery in a $9.5 Billion Deal

New Post has been published on http://tradewithoutfear.com/alibaba-bets-big-on-local-delivery-in-a-9-5-billion-deal/

Alibaba Bets Big On Local Delivery in a $9.5 Billion Deal

Alibaba Group Holding (baba) is buying full control of the startup Ele.me as it steps up efforts to expand in China’s fast-growing market for local delivery of food and other services.

The deal implies an enterprise valuation of $9.5 billion for Ele.me, Alibaba said in a statement Monday, without saying how much it’s paying. Alibaba and affiliate Ant Small and Micro Financial Services Group already owned about 43% of the startup. Alibaba paid all cash in the deal and has acquired all the shares formerly held by Baidu (bidu), according to a person familiar with the matter.

Ele.me — which means “hungry yet?” — operates an army of delivery people on motorbikes across the country and is vying for supremacy in the local services industry with Meituan Dianping, a startup backed by Alibaba rival Tencent Holdings (tctzf). The market is surging as people increasingly turn to their smartphones to order food, schedule beauty treatments and hire domestic helpers. It’s also strategically important for Alibaba and Tencent as a means to promote their respective payment services.

“As one of the most frequently used applications, food delivery is the single most important entry point in the local services sector,” Daniel Zhang, chief executive officer of Alibaba Group, said in an internal email to staff Monday. “We can already see that a vast, multi-dimensional local instant delivery network formed through a food delivery service will be an essential piece of the commerce infrastructure.”

Bloomberg News reported in February on Alibaba’s plans to buy out other investors in Ele.me. In a sign of the heated market, Meituan has become one of the most valuable startups in the world. The company is seeking to go public as soon as this year at a valuation of at least $60 billion, people familiar with the matter said last month.

The Ele.me deal is part of a broader foray by China’s largest e-commerce company into logistics and brick-and-mortar assets. Alibaba is taking over longtime delivery affiliate Cainiao and putting money into warehouses. It has also made investments in traditional retailers, including department store chain Intime Retail Group and China’s largest operator of Walmart-style hypermarkets.

“If the Ele.me distribution network is integrated with Cainiao it can become a more efficient asset and bring it to break-even quicker,” said Kirk Boodry, an analyst with New Street Research.

Baidu had ceded control of its own food-delivery unit to Ele.me last year as the startup and Meituan became the two biggest competitors in China’s online food-delivery market.

Zhang Xuhao, Ele.me’s founder, will become chairman of the company, while Wang Lei, vice president of Alibaba Group, will become chief executive officer of Ele.me, the company said.

Alibaba continues an expansion in e-commerce as it faces greater competition across Asia. Last month, the company said it would invest another $2 billion in Lazada Group to bolster its presence in Southeast Asia, where Amazon.com has launched in Singapore and Sea Ltd.’s Shopee is expanding to win consumers.

The Ele.me deal may cut into profit margins in the short term, but Alibaba has demonstrated a willingness to make such acquisitions for gains in the future. It acquired the video service Youku Tudou and mapping provider AutoNavi, for example.

“Whenever Alibaba have seen long-term upside they haven’t been hesitant about buying something in,” said Boodry.