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High e-commerce fees squeeze small F&B firms’ margins
"Using e-commerce is actually expensive despite the many promos it offers," said Marwah Devianty, owner of homemade snack brand Mamichin.
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A Grabfood worker wearing a protective mask rides along a street, amid the COVID-19 outbreak, in Jakarta, on July 13, 2020. (REUTERS/Ajeng Dinar Ulfiana)
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any small food and beverage companies feel their margins are being squeezed by high commission fees on e-commerce and food delivery platforms, putting their businesses in a tough spot, as mobility restrictions also compel them to digitalize to survive.
For Marwah Devianty, co-owner of homemade snack brand Mamichin, closing her online store on Shopee was a no-brainer as she paid higher fees and received lower profit margins compared with running her own webstore.
The 26-year-old said that Shopee imposed a more than 3 percent fee for each successful transaction, higher than the 1 to 2 percent on other online selling channels.
She also sold her goods on Tokopedia, Instagram and Mamichin's webstore, so hiking up the price of snacks on her Shopee store would render the products uncompetitive.
"Using e-commerce is actually expensive despite the many promotions offered," Devi told The Jakarta Post in an interview on Monday.
"These promo events, which we have to pay to participate in, translate to low brand awareness anyway. So why join them?" she said, referring to the “Double Day” online shopping event as an example.
Read also: E-commerce firms bank on ‘Double Ten Day’
