Pricing Strategy

Pricing Strategy

• Mandatory
1 Price • Must be higher than sale price
• Discount must be <=49%

• Mandatory
2 Sale Price • Must end with 9,000 VND

1 2

• Note: start date of promotion set on Seller Center must be 1 day before the planned start date, and
end date of promotion set on Seller Center must be 1 day after the planned end date
• For example: Product X will be sold at discounted price from 01/09 to 07/09 → sellers have to set
price on Seller Center from 31/08 to 08/09

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 Pricing Strategy

Why do prices need % discount and 9000 in their tails?

(quoted by experts interviewed by CBC)

• 1 T-shirt pricing at will make customers think of a cheap T-shirt

Sale • If that T-shirt has such price tag , customer will think it’s a real
off bargain.

• One study by the University of Chicago showed that 9000 in price tail can
Price help increase sales by 24%.
tail
9000 • Testing: One coat sold at $34, $39 and $44, the one with $39 are sold the
most despite not being the cheapest.

Another study suggested that a combination between discount and 9000 in tail price will
have the strongest effect in boosting attention rate to 70% compared to normal time.

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Competitive pricing: How to keep prices always competitive?

• Price analysis unit will report weekly on every Thursday on the price competitiveness of
all sellers on Lazada

• Key account managers will filter out all products with non-competitive prices (higher
price competitors) in order to report to sellers through email (prior) and telephone (later).

• Sellers are responsible for to improve their competitiveness. price adjustment

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Pricing Strategy

• The graph shows sales from 08.01.2014 - 08.31.2014

• From 01/8 - 20/8: sales not good because of high selling prices (average price already
minus voucher)
• From 21/8 - 23/8: sales up because of reduced prices (good deal)
• From 22/8 - 24/8: No revenue due to out-of-stock (OOS)
• From 25/8 - 27/8: good sales when prices return to good deals & have stock
• From 28/8 - 31/8: sales decline due to price increase (Not a good deal any more)

Conclusion
• Best price responding to the market is <299,000 VND
• Price & Inventory must be always stable to maintain revenue