Offline drives the core business, while marketplaces are the new channel
Many Vietnamese brands built their foundation in offline channels: dealers, grocery stores, supermarkets, pharmacies. This channel usually brings in most of the revenue and was built on years of relationships. Then the brand opens a store on Shopee and TikTok Shop, and runs into a problem that marketplace selling guides rarely address.
If you keep the marketplace price exactly the same as the in-store price, your marketplace store has nothing to compete with except ads, and ads hit a ceiling fairly quickly. If you discount on the marketplace, dealers and supermarkets notice immediately. They cut their orders, demand deeper discounts, and some stop carrying the product altogether. The brand risks sacrificing part of the channel that brings in most of its revenue for one that is still small.
We call this situation channel conflict: the same product, at the same list price, sold across several channels, so that one channel takes sales from another.
Why marketplaces magnify the conflict
- Instant price transparency. Buyers, dealers and supermarket staff can all open an app and compare prices in seconds.
- Stacked discounts pull the actual price down during sales. Platform vouchers, shop vouchers and shipping discount codes can stack. The list price does not change, but the price the buyer actually pays can end up well below the in-store price.
- Brands compete with their own resellers. Dealers or other sellers can open their own stores selling the same SKU, sometimes at a lower price.
Our view: differentiate by pack format, not by price
Keep the same list price for the same SKU in every channel. Give the marketplace its own room to compete through exclusive pack formats, bundles and versions that the offline channel does not sell.
The reason is simple: buyers can only compare prices when the comparison is 1:1, meaning the same SKU in the same pack format. When the pack formats differ, the direct comparison disappears. The price per unit can differ without it turning into a case of “it’s cheaper on the marketplace”.
An example with dishwashing liquid:
| SKU | Where it’s sold | List price | Price per liter | Comparable 1:1 with stores? |
|---|---|---|---|---|
| 750ml bottle | Supermarkets, grocery stores, official brand store on marketplaces | VND 45,000 | VND 60,000 | Yes, so the price must be the same |
| Bundle of 2 x 750ml bottles + 1.5L refill pouch | Marketplaces only | VND 129,000 | VND 43,000 | No |
| 3.8L jug | Marketplaces only | VND 159,000 | About VND 41,800 | No |
Illustrative example, hypothetical figures.
The price per liter of the two marketplace-only SKUs is about 28-30% below the single bottle, yet neither is “cheaper than the supermarket” on a 1:1 comparison. More importantly, both pack formats meet a real buyer need: buying online means home delivery, so people are happy to buy a big jug they would not want to carry home from the supermarket.
A 4-step ladder, from simple to structural
| Step | What to do | When it fits | Implementation cost and risk |
|---|---|---|---|
| 1. Pricing discipline | Uniform list price for shared SKUs, a minimum advertised price for each SKU, platform-funded promotions first | Every brand with an offline channel. Do this before the other steps | Almost free. But this step alone does not create room to compete |
| 2. Marketplace-specific pack formats | Bundles, large packs, small trial packs, gift sets, built from existing products | You need price room but don’t want new production yet | Low. More SKUs, packing, inventory management |
| 3. Marketplace-specific versions | Different size, scent, color, formula or packaging | Special pack formats are easy for competitors to copy, or dealers can still compare prices | Medium. Requires production, minimum batch sizes, product declaration or registration if the category requires it |
| 4. A dedicated online product line or sub-brand | A separate line or a separate name, with its own positioning | Online buyers are very different from offline buyers, or the offline positioning does not allow any other price | High. This is a brand architecture decision |
Our default recommendation: always do step 1. Step 2 is a sensible starting point for most brands. Steps 3 and 4 only when step 2 is not enough.
A few specifics for step 1:
- Minimum advertised price (MAP) for each SKU should be set before you start running ads, not after dealers complain.
- Use shop vouchers deliberately, for example to lift order value to the free-shipping threshold, not to cut prices for extended periods. A long-running voucher is a discount in disguise.
- Any sale that pushes the actual price paid on the marketplace below the offline retail price should be approved in advance by the brand owner, one campaign at a time.
- Resale price clauses in dealer contracts should be reviewed by the brand’s lawyer under current competition rules.
Step 4 deserves a further word. A separate online product line or sub-brand needs its own positioning: what it says, who it speaks to, where it wins. Taking this step without a brand strategy means creating a new name that nobody knows the purpose of.
Differentiate genuinely, or not at all
The worst approach is superficial differentiation: changing the SKU code and labeling it an “online version” while keeping the product exactly the same. Buyers notice when it arrives. Dealers notice when they compare. The brand loses credibility on both sides, and still gains no extra room to compete.
A special pack format that works needs to meet three conditions:
- A genuine reason to buy from the buyer’s side, not just a way to dodge price comparison: stocking up, gifting, trying out, home delivery.
- No 1:1 comparison with the SKU sold in stores.
- Operationally feasible. More SKUs mean more packaging, more forecasting, more inventory. A pack format that doesn’t sell becomes dead stock.
If the brand has several stores on the marketplaces, each store needs a clear role: which buyer group it serves, with which pack formats. Two stores of the same brand selling the same SKU at different prices is channel conflict of your own making.
Splitting properly unlocks pricing flexibility
The article The brand-price matrix describes the situation where a brand’s price axis is locked: it cannot cut prices, so the only way left is up the brand axis. Splitting product lines is an important exception to that situation.
The price of shared SKUs stays locked. But on marketplaces, the brand gains extra SKUs with their own price points: trial packs so new buyers can try at low risk, large packs for existing users, gift sets for the holiday season. Each SKU is a new price point that does not touch the in-store price.
Six questions to choose your step
- What percentage of revenue comes from offline? If you lost your biggest distributor, how much would it cost you?
- Can buyers compare prices 1:1 between the marketplace and stores, meaning the same SKU in the same pack format?
- Do your current distribution contracts include any restrictions on online selling prices, or on the brand selling direct to consumers?
- Are marketplace buyers similar to in-store buyers in age, region, purchase occasion and spend level?
- Can your factory produce new pack formats or versions? What is the minimum batch size?
- Do marketplace buyers have distinct behaviors, such as buying large packs to stock up, buying during sales, buying as gifts? Special pack formats should follow exactly those behaviors.
Questions 1 and 3 decide how much risk you can afford to take. Question 2 tells you where the problem lies. Questions 4, 5 and 6 tell you which direction to split in.
Need an outside perspective?
Choosing a step is the brand owner’s decision, because it touches production, packaging and dealer relationships. If you would like an outside perspective before deciding, a 2-hour advisory session with LMC is enough to work through the six questions above using your business’s real numbers.
Conclusion
Offline channels and marketplaces do not have to be in conflict. They only conflict when they sell the same thing, in the same way, and let buyers compare prices directly. Keep the price on shared SKUs, and give the marketplaces the pack formats online buyers genuinely need. That way, each channel has its own place.