Ad spend of top brands advertising on ecommerce marketplaces in SEA grew by 3,000% in the last 24 months

Cynthia Luo
Jun 8, 2022

Since September 2019, ad spend directly on Shopee has increased 3,100% on average in only two years based on internal Epsilo data across Singapore, Thailand, Malaysia, Vietnam and the Philippines.

ad spend on ecommerce marketplace
Source: Epsilo internal user data

Epsilo, ecommerce SaaS provider and an official Shopee Agency Partner, optimises in-platform ads for the world’s top brands such as Unilever and Xiaomi across marketplaces. The company first noticed growing in-platform ad momentum in Q3 2019 but saw it pick up during the pandemic when everyone shifted online.

“It makes sense to spend directly on a platform where traffic is consistently high and you know people are there to shop,” says Quang Tran, Founder & CEO of Epsilo. “Retail marketing, also commonly referred to as in-platform marketing, has grown widely in popularity because it gives marketers and online businesses healthier and clearer returns versus other advertising channels.” 

From August 2019 to August 2020, direct ad spend on ecommerce marketplaces like Lazada, Shopee and Tokopedia increased by 1730% across 19 stores owned by global brands. 

ad spend on ecommerce marketplace
Source: Epsilo internal user data

As marketing investments in marketplace advertising solutions such as Lazada’s Sponsored Search and Shopee’s MyAds and Tokopedia’s TopAds increased in absolute spend and number of participating stores, the spend growth slowed but remained significant at 170% YoY from September 2020 to September 2021.

ad spend on ecommerce marketplace
Source: Epsilo internal user data

*Note: the oscillations in ad spend is driven by MegaCampaigns. Ex. following 9.9, 10.10, 11.11 and 12.12, there is a large dip in in-platform spend in January as traffic drops and shopper intent to buy decreases. The same is witnessed in July after the large Mid-Year sale in June. 

The future of advertising for ecommerce sellers 

Marketers and online sellers have long looked for alternatives to the advertising duopoly Google and Facebook and they’ve found it in the world’s second largest search engine - ecommerce marketplaces. 

Amazon’s latest earnings report for 2022 showed its advertising business is now larger than Youtube.

So how did Amazon Media Group, a service launched in 2012 make more revenue than the dominant online video platform that’s been around since 2005? 

Amazon is steadily growing in share of ad revenue in the US, a trend likely witnessed in emerging markets as well

They leverage their position as a shopping platform to offer brands the ability to capture an audience at the point of sales. 

And it’s not only big brands who have identified the retail marketing opportunity - the rise in ad spend directly on ecommerce platforms is largely driven by small businesses as seen by promoted products for key search terms and the number of sign ups for Epsilo week on week since the latest product update in mid-January 2022. 

The popular keyword "pot" shows the top search results are dominated by SKU ads from C2C sellers and not official brand stores such as Tefal or KitchenAid

The power of retail marketing evens out the competitive ecommerce playing field. It’s not only about the size of the marketing budget but the ability to optimise your bids to ensure you’re reaching the shopper with the highest intent to buy your product and not driving traffic to products that are out of stock. 

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Image credit: Jeremy Bishop

*Editor's note: article was first published February 16 2022, author made edits to update the % growth as more data became available.

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