Expensive Lessons from Lazada: When the "Pioneer" is Not the Winner

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For Lazada – market share is only 3% (reported by Metric.vn), this story is not only about competition, but also a classic lesson about the sustainability of a business model in the face of rapid market changes.

Looking back at its business history, Lazada officially entered Vietnam in 2012, bringing with it a large amount of capital from Rocket Internet (Germany). In the context of the internet infrastructure and online shopping habits being in their infancy, Lazada played a pioneering role in shaping the e-commerce market.

Lazada started with a retail model that imported and sold goods itself, then switched to a marketplace model, creating a playground for sellers. Lazada is willing to "burn money" to educate the market about e-commerce, build its own logistics system (Lazada Express) and large warehouses. Massive advertising campaigns and big promotions have helped Lazada create a strong brand identity and quickly dominate the market.

The appearance of Shopee and Tiktok shops causes Lazada's market share to decline rapidly (Photo: Ai)

With the above strategies, Lazada naturally became the number 1 e-commerce platform in Vietnam and Southeast Asia, with almost no worthy competitors for many years.

Lazada’s biggest turning point came from Alibaba’s acquisition of a controlling stake (starting in 2016). This change brought huge capital and experience in operating the world’s leading e-commerce platform, but also marked the beginning of a strategic shake-up. Under Alibaba’s management, Lazada shifted its focus to high-value and branded products (Lazada Mall), trying to adopt the premium model of Alibaba/Tmall (China). However, this strategy was not suitable for the Vietnamese market, where most consumers are still price-sensitive and prioritize convenience.

In the context of Lazada's leadership change, Shopee (part of Sea Group) entered the market with a completely different strategy, focusing on building a more user-friendly experience and especially free shipping, directly targeting the psychology of Vietnamese shoppers. In just a few short years, Shopee continuously "swallowed" and expanded its market share with gamification campaigns, discount codes and FreeShip.

Meanwhile, Lazada was somewhat slow and conservative in adapting to the new consumer culture, leading to losing its leading position to Shopee (around 2018-2019).

After Shopee, the emergence of TikTok Shop has created a new model called Social Commerce, integrating shopping into entertainment experiences (Livestream, short videos ). This attracts a large number of young users and quickly takes over 41% of the sales market share, dealing a heavy blow to both Lazada and Tiki.

According to Metric.vn, by the third quarter of 2025, Lazada's sales market share will only remain at 3%. However, Lazada still has a loyal and reputable core customer base in the genuine goods segment (Mall), showing that service quality and logistics are still its strengths. With a small market share, Lazada has difficulty expanding its economic scale and competing on price and discount codes with competitors with more abundant financial resources.

Realizing the situation, Lazada has recently been making moves to reposition itself, such as strategic cooperation with foreign partners (such as Gmarket Korea) to bring more international and exclusive goods to Vietnam, in order to build a distinct advantage beyond the price war.

However, with what has happened in the e-commerce market in Vietnam, it can be seen that the principle of "The pioneer is not necessarily the final winner". From a unique position, Lazada has gradually narrowed.

In the future, it is easy to see that the Vietnamese e-commerce market will continue to be a balanced battle between the two giants Shopee and TikTok Shop. For Lazada, maintaining this stable 3% market share will be the foundation to find a separate direction, focusing on quality, exclusive goods and higher-end experiences, instead of participating in the race to burn money and reduce prices.

Source: https://daibieunhandan.vn/bai-hoc-dat-gia-tu-lazada-khi-nguoi-tien-phong-khong-phai-nguoi-thang-cuoc-10393604.html