When starting an e-commerce business on Shopee, one of the first critical decisions you'll face is whether to open a local store or a cross-border store. This choice can significantly impact your initial growth and success rate. Understanding the key differences between these two models is essential for making an informed decision.
Understanding the Two Models
Shopee offers two distinct store types:
- Local Stores: Require registration using local business credentials in the target market (e.g., a Taiwanese business license for the Taiwan market).
- Cross-Border Stores: Allow registration with mainland China business licenses to operate in overseas markets.
Why Cross-Border Stores Are Recommended for Beginners
For new sellers, cross-border stores generally present a more manageable entry point. Below is a comparative analysis of both models:
Local Stores: Advantages and Disadvantages
Advantages:
- Fewer category restrictions: Can sell a wider variety of products compared to cross-border stores.
- Greater traffic support: Typically receive more platform-generated traffic.
- Lower transaction fees: Usually charge about 2% in fees.
Disadvantages:
- Single-market limitation: Restricted to operating in one marketplace.
- Local banking requirements: Must link to a local bank account, creating operational complexity.
- Overseas inventory requirements: Need to maintain local stock, increasing inventory risk and requiring overseas warehousing.
- Higher account risk: Many local stores are established using purchased credentials, which violates platform policies and risks account suspension if IP irregularities are detected.
Cross-Border Stores: Advantages and Disadvantages
Advantages:
- Simplified registration: Can use personal credentials including business licenses and payment accounts, ensuring fund security.
- Multi-market operation: Ability to open stores across multiple marketplaces.
- Platform warehousing: Access to Shopee's official warehouses at competitive rates with greater reliability.
- Dropshipping capability: No need for overseas inventory or warehousing, significantly reducing operational risks.
Disadvantages:
- Category limitations: Certain product categories may be restricted.
- Less traffic support: Typically receive less platform-generated traffic compared to local stores.
Recommendations for New Sellers
For beginners, cross-border stores offer lower risk and easier onboarding. Without the need for inventory management or overseas warehousing, sellers can focus on product selection, store operations, and customer service. While local stores offer traffic and category advantages, their higher risk profile and capital requirements make them less suitable for newcomers.
Conclusion
When starting on Shopee, beginning with a cross-border store is advisable. This approach allows sellers to achieve initial traction while gaining valuable platform experience. Once operational knowledge and capital are established, transitioning to local stores becomes a viable option. In e-commerce, measured progression and strategic growth remain fundamental to long-term success.