Retailers bypass traditional stores, opting for Shopee and Lazada to tap into booming regional demand

A growing number of Singaporean retailers are reshaping their expansion strategies by bypassing costly physical stores and embracing e-commerce platforms like Shopee and Lazada to enter the Thai and Malaysian markets.

Without the resources to set up independent outlets abroad, many small and mid-sized brands have instead chosen to capitalise on the massive customer bases and marketing tools offered by the two dominant platforms. These online marketplaces provide retailers with integrated logistics, broad visibility, and access to a younger, tech-savvy demographic.

Nick Morris, founder of cultural research agency Canvas8, explained in an interview with Retail Asia that the approach eliminates high customer acquisition costs, while offering significant growth potential. Though there are platform fees and advertising expenses, the exposure and sales potential more than justify the investment.

Morris referenced an October 2024 DHL e-commerce report, which showed Shopee is used by 88% of Thai and 94% of Malaysian online consumers, with Lazada also enjoying a strong presence – 85% in Thailand and 79% in Malaysia.

Shopee Singapore’s director Kel Jin Chua added that brands often approach the platform specifically to explore opportunities in Malaysia and Thailand, both of which demonstrate healthy consumer appetite and expanding digital economies.

Reaching digitally native audiences has also become crucial. Ashutosh Awasthi, director at Kadence International Singapore, noted that platforms like Shopee and Lazada are particularly effective for capturing the spending power of Generation Z, who are driving e-commerce growth in Southeast Asia.

He highlighted the success stories of “Love, Bonito”, a fashion brand that evolved from a blogshop into a regional player, and “Secretlab”, which scaled up internationally without the need for brick-and-mortar shops. Other major Singaporean names like “BreadTalk”, “Charles & Keith”, and “Razer” have embraced a mix of digital and physical presence to grow in Malaysia.

However, entering these markets isn’t without hurdles. Awasthi warned that intense competition, uneven digital adoption – especially beyond urban centres – and high price sensitivity in Malaysia remain significant challenges. Retailers are often compelled to adopt omnichannel strategies to reach less digitally connected consumers.

Morris also observed key behavioural differences: Thai shoppers engage heavily with social commerce, making influencer partnerships and livestream selling particularly effective. In contrast, Malaysian consumers are more focused on value, with 56% prioritising discounts – far more than the 37% of Thai buyers who do so.

For Singaporean brands aiming to scale regionally, adapting to these local nuances while leveraging e-commerce platforms may be the most effective route forward.