ANLY482 AY2017-18T2 Group32: Project Overview

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Business Problem

Despite the influx of cash, Shopee's profitability remains questionable due to the high marketing costs incurred in expanding consumer base. Hence there is a need to for Shopee to strengthen its market position against many other e-commerce competitors and examine ways for the company to cut costs and maximize their resource for business longevity.

Project Motivation

It is noted that Shopee generates less than 15% of the revenue of Sea Ltd, yet takes up 78% of the company’s total marketing and sales expense. This could be attributed to price being the main determining factor when customers engage in online purchase. Thus, e-commerce companies like Shopee have to resort to discounts to lure new customers and maintain current ones, further reducing the already low profit margin.

In addition, an article from Harvard Business Review reported that it is 5 to 25 times more expensive to keep an existing customer than to acquire a new one. In order to become profitable in the long run, it is imperative for Shopee to distinguish themselves not just through price competitiveness, but also through improving customer satisfaction to entice them to continue using the service.

Project Objective

This project aims to provide clarity of what factors are more (or less) important in optimizing Shopee’s improvement efforts. Identifying these factors will play a key role in our prescriptive analytics to provide Shopee with key business insights on 1) how to enhance customer satisfaction and 2) improve their ability to retain existing customers. The project deliverables include:
i. Industry best practices for driving customer satisfaction and loyalty
ii. Quantified key drivers of customer satisfaction (specific to Shopee)
iii. Recommendations on how to improve customer satisfaction

Scope of Work

We have identified the need to go beyond pricing strategies to maximize profit. There is a need for Shopee to focus on ensuring consumers’ satisfaction to encourage returning patronage. It will focus on analyzing Shopee’s past interactions with consumers to improve overall customers’ experience. We will adopt a cradle-to-grave approach by analyzing customers’ interaction with Shopee throughout their time on the site.

We will:

1. identify factors that will severely influence a customer’s experience when shopping on Shopee, and
2. suggest recommendations on how Shopee can improve their standard operating procedures to ensure customers’ satisfaction to retain their customers.