Why Are Small Sellers Leaving Shopee? What They Can Do To Survive?

Between 2024 and 2025, Shopee experienced a notable shift: although it remains Vietnam’s leading e-commerce platform, the number of active storefronts generating orders dropped significantly. By the end of 2024, Shopee had lost 88,000 active sellers (according to Shopee, TikTok Shop fee hikes to squeeze vendors’ profits by VnExpress). These exits primarily involve small businesses that face increasing operational challenges, prompting them to scale down or exit entirely. Let’s dive into the article to understand why this trend has been happening.

1. The Challenges

Rising Operational Costs

• The most direct and impactful challenge for small businesses on Shopee is the significant increase in operational costs and platform fees. As of April 2025, Shopee raised its fixed commission fees dramatically for certain product categories, doubling or tripling previous rates. For example, Phone Accessories will see their fixed fees triple to 9%, while other categories such as Fashion, Beauty or Food & Beverages could also face fees reaching up to 10%.

• In addition to fixed fees, sellers must also pay a 5% payment fee and 3% each for voucher and content-based promotions. VnExpress also pointed out that to benefit from Shopee, sellers typically need a minimum profit margin of 30–40%. This threshold is extremely difficult to meet—not only for small-scale operations but also for certain types of businesses. For instance, while manufacturers selling directly to consumers rarely reach gross profit margins of over 50%, wholesalers and retailers who resell products on marketplaces often struggle to secure even a 30% margin, regardless of their scale.
• Notably, starting from June 2025, fixed fees for non-Shopee Mall sellers will also increase by an additional 0.5% to 1%, further widening the gap between business types and favoring brands with stronger vertical integration.

Intense Competition—Domestic and Cross-Border

• Competition on Shopee is becoming increasingly fierce, not just from local vendors but also from international sellers. The platform saw over 31,500 new foreign shops join in 2024 alone, many of which offered goods at prices local vendors find hard to compete with (regarding *Vì sao nhiều nhà bán hàng rời sàn thương mại điện tử?* from Báo Phụ Nữ). And in Q1/2025, imported goods on Shopee reached a sales value of VND 3.6 trillion, with over 80 million products sold, which represents a year-on-year increase of 12.2% in revenue and 7.18% in volume. These include a significant number of cross-border sellers from China. As logistics systems become increasingly modern and efficient, the process of cross-border shipping is becoming simpler—further intensifying competition with domestic sellers.
• Moreover, larger brands and Shopee Mall sellers tend to be favored in such an environment, leaving smaller shops struggling to keep up. According to economist Dr. Đinh Thế Hiển, Vietnam's e-commerce market is maturing, those without strong strategies and resources are being pushed out.

Policy Changes

• New platform policies have further strained seller relations. From March 8, 2024, Shopee extended its return window to 15 days and eliminated return shipping costs for buyers. This led to a rise in abuse cases, such as customers returning worn clothes or opened items. Additionally, sellers now have to shoulder all costs related to failed deliveries and returns, which have significantly impacted small sellers, increasing their operational burdens and leading to a decline in seller satisfaction.
• The Freeship Extra program was discontinued and replaced by general free shipping vouchers that are limited in quantity and come with strict conditions. This move was part of Shopee's broader effort to reduce subsidies and shift more cost burdens to sellers. While it may help the platform improve its financial efficiency, it has caused difficulties for small sellers who previously relied on Freeship Extra to attract buyers without absorbing high shipping costs themselves.
• Some sellers accuse Shopee of capitalizing on delayed disbursements. As reported by Báo Tuổi Trẻ, Shopee has been slow to transfer seller earnings and simultaneously promoted lending services to them, raising questions about ethical practices.

2. What Small Sellers Should Do

In light of these challenges, small sellers need to take proactive steps to adapt and remain competitive. First, diversification is essential—not only across marketplaces like TikTok Shop, Lazada, or social commerce channels such as Facebook and Zalo, but also by developing an official brand website to reduce dependence on any single platform. This approach was also highlighted in our previous article on digital strategy for SMEs in Vietnam (read more here).

Second, sellers should focus on building their own community and customer base outside of third-party platforms. Channels like email marketing, fan groups, and livestream audiences can help strengthen brand loyalty and provide more control over customer relationships.

Instead of attempting to compete solely on price, which is becoming increasingly difficult, they should focus on quality, brand differentiation, niche markets, and delivering a superior customer experience to ensure their survival and establish a unique market position. When price competition devolves into a "race to the bottom," the only sustainable path for small businesses is to offer something that cannot be easily replicated by mass-market, low-cost foreign competitors, thereby pushing them towards specialization and brand building.

Operational efficiency is another priority. Streamlining logistics, bundling products, and optimizing pricing can help reduce costs. Sellers may also consider joining fulfillment programs like FBS or third-party warehousing solutions to benefit from faster delivery and platform support.

Lastly, small businesses should stay informed about platform policies and leverage available seller support programs—whether through official resources, online communities, or digital marketing agencies—to improve store visibility and campaign effectiveness.

3. Conclusion

Small businesses in Vietnam are facing a tough reality on Shopee. With rising fees, high advertising costs, increasing competition, and stricter platform policies, many have opted to exit. Compounding the issue, Shopee has increasingly adopted consumer-first policies—such as extended return periods and free return shipping—that often leave sellers bearing greater risks and costs. This shift in balance has made many sellers feel unsupported and undervalued when operating on these platforms. In response, sellers are diversifying or shifting to alternative platforms such as TikTok Shop or social media, which reflects a broader reshaping of Vietnam’s e-commerce ecosystem, where only the most adaptable and resourceful sellers will thrive.

In my own opinion, small sellers should avoid depending exclusively on third-party e-commerce platforms —in this case is Shopee—as their only sales channel. Instead, they should explore building their own online presence, for example through a branded website. This can help them to retain more control over customer relationships and reduce dependence on shifting platform policies. Moreover, it's crucial for small business owners to invest time in learning digital marketing, customer relationship management, and branding to professionalize their operations and compete more effectively in an increasingly competitive market.

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