Tripled fees, TikTok Shop charges higher than Shopee and Lazada

After raising the floor fee, TikTok Shop became the e-commerce platform with the highest fees in Vietnam for many products.

On July 16, the e-commerce platform announced a change in seller fees, effective July 18. The SFP (Shipping Fee Program) service to subsidize shipping will be implemented by default on all orders of regular shops. Previously, this package had to be registered separately, applied at 4.5% of the order value, but not exceeding 30,000 VND each time.

This causes the basic discount amount that shop owners have to pay to the platform to increase 2-3 times depending on the product category. After the update, TikTok Shop became the e-commerce platform with the highest fee at present. Combined with other factors, sellers on this platform have found it difficult to compete.

For example, the fixed fee for fashion items on TikTok Shop is currently fixed at 12%. Meanwhile, Shopee and Lazada collect at 10.8%, a difference of 1.2% per order. In addition, TikTok Shop's payment fee is also kept at 5%, the highest among the three platforms. Previously, Shopee and Lazada reduced their fees after the new VAT rate was applied by the government. These two platforms currently collect about 4.9%.

TikTok Shop's new fee schedule. Photo: TikTok.

In addition to some popular categories that are higher than competitors, TikTok Shop also maintains a fixed fee equal to or lower than 0.2-08% on some products.

In addition, according to sellers, TikTok Shop needs other costs to sell products, not just the fixed ones. “TikTok is an entertainment app, users do not have the goal of buying from the beginning. Therefore, shop owners have to make videos , hire people to livestream or run ads to easily get orders,” said C. Hau, an accessory seller on this platform.

According to this seller, TikTok Shop must maintain a fee level 1-2% lower than competitors to have a competitive advantage. If this platform is on par, shop owners will return to Shopee or Lazada because these platforms do not charge fees for content creation and video advertising.

TikTok's fee increase comes amid strong growth in Vietnam. The latest entrant, the platform now accounts for 35% of the market share (according to a report from Metric.vn), breaking GMV records and impacting competitors such as Shopee and Lazada. The number of new shop owners on this platform is also higher than the other two platforms.

Platforms that increase fees are often quickly reflected in product prices. Shop owners will proactively increase prices to compensate for the difference. Therefore, platforms charging more can indirectly cause revenue to decline, resulting in a loss of revenue due to losing customers to competitors.

Source: https://znews.vn/tang-phi-gap-3-tiktok-shop-thu-cao-hon-ca-shopee-lazada-post1574390.html