Image source: Pixabay

There are many ways to calculate the success of your online business. Sales dollars, followers, and campaign successes are just a few, but one of the most common ways to measure growth and business viability is through conversion rates. 

Knowing your conversion rates can help you understand your business’ return on investment (ROI). Are customers engaging with a pop-up on your site? Or clicking through an email advertisement? Indeed, the conversion rate can tell you whether your customers like what they see.

The conversion rate can tell a seller a lot about the health of their business, and growing your conversion rate is crucial to ensuring you are reaching customers, and in turn, having them reach for their wallets. 

What Are E-commerce Conversion Rates?

E-commerce conversion rates, often shortened to (CVR), refer to the percentage of visitors of a website or e-commerce shop that purchase from that seller. 

The formula for conversion rates can be calculated by dividing the number of completed sales (or whichever variable the store owner is trying to track) by the number of customers that visited your website. Here is the e-commerce conversion rate formula: 

(E-commerce conversion rate = completed orders/number of customer visits)

The resulting rate can be used as a marker of success to see how well your product is selling. This conversion rate can be used on its own to track the overall success of a business or can be attached to a specific campaign to learn how it is performing. 

This formula can be personalized for different campaigns. For example, if a seller would like to know if a marketing email campaign led to the desired amount of customers signing up for a free trial, the formula could be: 

(E-commerce conversion rate = customers who signed up for a free trial/customers who received the marketing email)

Sellers can track this rate themselves or rely on services like Google Analytics 4 (GA4) to help with calculations. It should be noted that the newest version of Google Analytics, GA4, tracks conversion rates differently than previous iterations of the product. 

One of the most popular e-commerce platforms, Shopify, offers their sellers a dashboard that tracks conversion rates. Their analytics page is a customizable toolbox to help sellers track their ROI. 

How to Track Conversion Rates on Popular E-Commerce Platform

Each e-commerce platform has its own method of tracking conversion rates. 

• Shopify offers sellers a dashboard that tracks conversion rates. Their analytics page is a customizable toolbox to help sellers track their ROI. 
• One of the most popular e-commerce platforms in Southeast Asia, Shopee, also provides sellers with their conversion rate metrics. The platform allows sellers to personalize their e-commerce conversion rates and shows sellers conversion rates for add to cart, visit to placed, and visit to paid. 
• E-commerce sellers on TikTok Shop can use the app’s built-in conversion rate tracker. The TikTok Ads Manager helps sellers see their conversion rates on their Analytics page. To gain a deeper understanding, sellers can also integrate outside conversion tracking tools such as wecantrack or Attribuly. 
• Lazada provides sellers a built-in conversion rate tracking tool like many other selling platforms. Conversion rates can be found at the Lazada Seller Center. 

What is Considered a Good Conversion Rate?

The higher the conversion rate, the better. However, conversion rates will vary depending on the contents of the online shop. 

An online shop specializing in more expensive goods might experience a lower conversion rate merely due to the nature and cost of the item sold. A shop whose main products are cheaper and more accessible to a wider audience may record a higher conversion rate. It is up to the individual seller to make their goal conversion rate. 

The average conversion rate of e-commerce sites among select sectors was 1.5% in 2024 according to Statista. However, such studies found this number to be as high as 2.5%. Conversion rates varied across different e-commerce sectors and active apparel saw the highest rate of 1.9%. In addition to differences based on the type of item sold, conversion rates vary across regions. The average conversation rate in the United States will not be the same as those in Southeast Asia. 

Another way to benchmark your business using conversion rates would be to look at specific marketplaces. 

For example, the average Shopify conversion rate is 1.4%. The higher range on Shopify can reach as high as 3.3%, and the lower range dips to 0.5%.  Comment end The average conversion rate for TikTok Shop is about 1.1%. Of course, these rates can be higher or lower depending on the type of shop.

How Can E-Commerce Stores Improve Conversion Rates 

Image source: Pixabay

There are many improvements sellers can make to ensure that their online shop is optimizing their chances for conversion. Here are some questions to ask about your online shop: 

• Are my product descriptions clear? 

  • It is essential to have a clear and accurate description of the product. This helps customers decide which product to purchase and guarantees the item will fit their needs. 

• Is the path from adding an item to the cart to checkout frictionless? 

  • Customers must be able to seamlessly enter an item into their cart and breeze through the checkout process. Any amount of friction or experience of site issues might send them to a competitor. According to a study among Singaporean customers, 76% of customers will abandon their cart if their preferred payment method is unavailable. 

• Are my products fairly priced? 

  • This is where knowing your customers is crucial. Is your audience willing to pay the prices in your shop? If customers are visiting and immediately leaving, it might be time to revisit your target audience or evaluate pricing. 

• How are customers responding to shipping, taxes, and other fees?

  • Hidden fees can deter potential customers and can discourage customers from making the final decision to purchase. 

• Is the checkout process secure? 

  • One of the biggest challenges e-commerce sellers face in Southeast Asia is ensuring customers’ peace of mind while checking out. Customers want to be able to trust that their payment information is secure–and if they don’t, they will leave. About 19% of Southeast Asian consumers expressed enough concern about their privacy that they abandoned their carts. 

• Is my online shop both web- and mobile-friendly?

  • Global conversion rates show that conversions are mostly likely to occur when customers are shopping on a tablet or desktop computer. Tablets saw the highest conversion rate of 3.1% and desktops reported 2.8%. Thus, it is important that the online shop is easy to navigate on both a cell phone and a computer. 

• Will orders be fulfilled quickly and reliably?

  • Delivery and logistics are some of the top concerns of Singaporean customers. Over 60% reported that delivery and logistics impacted their decision to purchase. Potential delivery delays or worries about lost packages were cited by 49% of customers who did not proceed with a purchase. A detailed estimated delivery date (EDD) was preferred by 86.7% of Southeast Asian customers.

All of these tips will help curb cart abandonment–one of the most common dangers e-commerce sellers will face. In fact, cart abandonment, which refers to when customers who had already put items in their digital cart decide against making a purchase, continues to rise. In 2024, the global rate of cart abandonment crested over 70%. 

It is important to remember that there is no “one-size-fits-all” approach to improving conversion rates. 

An e-commerce seller must not only know their audience and ensure their products are successfully marketed towards them. In addition, learn from past conversion rates and optimize their future performance in order to continue growing their business.