Shopee Explained

Shopee Pte. Ltd.
Trade Name:Shopee
Type:Subsidiary
Industry:E-commerce
Founded:
Queenstown, Singapore
Parent:Sea Limited
Subsid:Shopee Japan Co., Ltd[1]
Location:5 Science Park Drive, Shopee Building, Singapore 118265
Key People:Forrest Li (Founder)
Chris Feng (CEO)[2]

Shopee Pte. Ltd. is a Singaporean multinational technology company specialising in e-commerce. It is a subsidiary company of Sea Limited. It was launched in 2015 in Singapore, before its global expansion.[3]

, Shopee is considered the largest e-commerce platform in Southeast Asia with 343 million monthly visitors . It also serves consumers and sellers across countries in East Asia and Latin America who wish to purchase and sell their goods online.[4] [5] [6]

History

In February 2015, Shopee launched in Singapore as a mobile-centric marketplace where users can browse, shop and sell products.[7] The asset-light platform is integrated with logistical and payment support, and claims to make online shopping easy and secure for both buyers and sellers.[8] [9]

The app-based platform launched a website to compete with other e-commerce companies such as Coupang, Lazada, Tokopedia and AliExpress. To differentiate itself, Shopee offers online shopping security through its own escrow service called Shopee Guarantee,[10] which can be used to withhold payments from sellers until buyers have received their orders.[11]

On 3 September 2019, Shopee officially opened its six-storey regional headquarters at Singapore Science Park. The new building spans 244000square feet of space, which can accommodate 3,000 employees and is six times larger than Shopee's previous headquarters at Ascent Building. The building was leased by WeWork before it was relinquished to Shopee.[12] [13]

Shopee has yet to turn profitable despite increasing its gross profit margin year-on-year in the first half of 2022 which is attributed to faster growth in transaction-based fees and advertising income. Coupled with rising inflation and interest rates as well as setbacks in its internationalisation plans, Shopee laid off staff across multiple markets in June 2022, including employees from Indonesia, Thailand, and Vietnam. ShopeePay and ShopeeFood were also reported to be facing cuts.[14]

On 15 September 2022, Sea's CEO, Forrest Li sent a memo to all employees that outlined cost-cutting measures to be taken by the company to achieve "self-sufficiency". The measures include restrictions on business expenses, and Shopee's top executives will also temporarily forgo compensation.[15] Another round of job cuts was also announced, which affected employees in Singapore, Indonesia, and China.[16]

Business model

Shopee started as a consumer-to-consumer (C2C) marketplace but it pivoted into a C2C and business-to-consumer (B2C) hybrid model.[17] The company partners with over 70 courier service providers across markets it serves to provide logistical support for users.[18] In Singapore, Shopee collaborates with logistics startup Ninja Van for item pickup and delivery.[19] Other delivery partners in the region include Pos Malaysia and Pos Indonesia.[20] [21] Shopee also partnered with Delhivery and Ecom Express for deliveries in India before it exited the domestic market.[22]

In its early phases of growth, Shopee offered subsidies and free shipping to its users although delivery services were still expensive in the areas it serves.[23]

Market share

By 2019, Shopee's app had recorded 200 million downloads. Gross orders also grew 92.7% to 246.3 million in Q2 2019, compared to 127.8 million in the previous year. Its gross merchandise value (GMV) also surged 72.7% to US$3.8 billion in Q2 19, compared to US$2.2 billion in the preceding year.[24]

According to a report by iPrice in Q2 2019, Shopee was the top shopping app based on monthly active users, total downloads and website visits, ahead of its competitors, Lazada and Tokopedia.[25] These GMV claims led to backlash from Lazada. Lazada's former CEO, Max Bittner asserted that GMV numbers can be easily inflated "by subsidy schemes and history shows that GMV falls away as unhealthy subsidies are removed."[26]

In Malaysia, Shopee became the third most visited e-commerce portal in Q4 2017, overtaking Lelong, and replaced Lazada as the top app on iOS and Google Play app stores.[27]

Among consumers in Indonesia, a survey conducted in December 2017 revealed that Shopee is the top shopping platform for Indonesian mothers (73%), ahead of Tokopedia (54%), Lazada (51%) and Instagram (50%).[28]

In 2019, Shopee launched a localised site in Brazil. The site was Shopee's first in Latin America and outside Asia.[29] By 2023, the company said it was doing business with over three million local merchants.[29] Shopee later started operations in Mexico, Chile and Colombia in 2021.

In September 2021, Shopee introduced its marketplace in Poland. Launches in Spain and France followed over the next two months.[30] Shopee exited France and Spain on 6 March and 17 June 2022 respectively, leaving only Poland with operations in Europe.[31] [32] Eventually, Shopee left Europe with an announcement of the closure of its Polish operations on 12 January 2023.[33]

Shopee started operations in South Korea in 2020 to help local merchants reach customers in markets where the former operates. However, Shopee does not have a consumer-facing platform in South Korea.[34]

In November 2021, Shopee entered the Indian market with a soft launch. It clocked 100,000 orders a day and has over one million app installations on the Google Play Store in India. On 29 March 2022, just five months after the launch, Shopee ceased its operations in India. The website and app also went offline in India as of 31 May 2022.[35]

For Q2 2022, Shopee recorded US$1.7 billion in quarterly revenue, higher than the combined revenue of Alibaba Group's international businesses: Lazada, AliExpress, Trendyol and Daraz.[36]

In September 2022, Shopee ended its local operations in Chile, Colombia and Mexico, but would continue to serve customers in these countries through a cross-border model. Shopee exited Argentina entirely on 8 September 2022 after facing stiff competition with Mercado Libre.[37] [38]

Controversies

Meet-and-greet with Blackpink

In June 2019, #ShopeeScam trended on Twitter after Shopee released a promotion in the Philippines that offered passes to a meet-and-greet with Blackpink for the top 568 spenders in their online store.[39] [40] Several fans reported receiving notifications that they had won tickets, but which were unilaterally retracted afterward by Shopee. Others posted screenshots that showed Shopee changing their contest mechanics the day before the event. Shopee was investigated by the Department of Trade and Industry for the incident.[41]

Underpaid couriers in Indonesia

In April 2021, Shopee faced allegations that it was underpaying its couriers in Indonesia after some riders claimed publicly that their pay per delivered package was reduced by the company to US$0.10 per package, down from US$0.34 in the previous year. Couriers that serve Shopee Express deliveries were also not paid basic monthly salaries, though there is a US$7.90 bonus if they can deliver 40 or more packages in a single workday. There is also no compensation for fuel or parking fees. Shopee responded to the allegations that it has a fair incentive scheme that is in line with Indonesia's market and regulations, and what they offer is "highly competitive" within the industry.[42]

Rescinded job offers

In late August 2022, a user of the Chinese social networking platform Maimai uploaded a post stating that he had relocated as part of a job offer from Shopee to work at the company's headquarters in Singapore. However, the offer was revoked after he disembarked from the plane in Singapore with his family. Multiple job offers were allegedly affected, as other users claimed they had similarly resigned from current positions and terminated housing contracts to join Shopee, only for their offers to be rescinded.[43] [44]

Toni Gonzaga endorsement

On September 28, 2022, Shopee Philippines received backlash when rumors started spreading that the platform would introduce Toni Gonzaga as its brand ambassador a day after the company's reported massive layoff. This was confirmed the following day at a press conference. While various reasons were pointed for the backlash from the ethical issues with getting a highly-paid endorser to the endorsers' political activities, Gonzaga only appeared on the company's platform for a total of ten days before introducing another endorser for their 11.11 campaign, businessman and singer Jose Mari Chan.[45] [46]

2022 layoff

In 2022, Shopee had to lay off 600 people which amounted to 3% of its employees.[47]

External links

Notes and References

  1. Web site: ShopeeでJAPAN FINESTキャンペーンがスタート。海外現地モールで日本直送品の露出枠が拡大。. 18 August 2021 . ja .
  2. Web site: Chris Feng .
  3. News: Lee . Yoolim . 8 May 2017 . Garena Rebrands as Sea After Raising $550 Million in New Funding . Bloomberg . 21 March 2018.
  4. Web site: 2022-01-12. As Shopee expands aggressively around the world, will it become the 'Amazon of emerging economies'?. 2022-01-13. KrASIA. en.
  5. Web site: Econsultancy. Shopee: Localizing Ecommerce in Southeast Asia and Taiwan. 2021-03-22. Econsultancy. 17 March 2018 . en.
  6. Web site: Level Up Your E-Commerce Game: Setting Up Google Analytics 4 Funnel Tracking Like a Pro! Report Garden . 2024-05-30 . Marketing Agency Software Reportgarden.
  7. Web site: Yap . Jacky . 2015-08-03 . Garena And Its Quest To Take Down Carousell With Newly Launched Shopee App . 2022-08-17 . Vulcan Post . en-US.
  8. Web site: Ting . Lisabel . 2015-09-09 . Safe, easy shopping with Shopee The Straits Times . 2022-08-17 . The Straits Times . en.
  9. Web site: Lee . Terence . 6 November 2017 . How Shopee plans to reign supreme in Southeast Asia's fashion ecommerce scene . 2022-08-17 . Tech in Asia . en-US.
  10. Web site: Tegos . Michael . 24 November 2015 . Garena's Shopee could be on its way to beating Carousell in Asia . 2022-08-17 . Tech in Asia . en-US.
  11. Web site: Husain . Osman . 11 December 2015 . 5 disruptive ecommerce startups we saw in 2015 . 2022-08-17 . Tech in Asia . en-US.
  12. Web site: Heng . Melissa . 3 September 2019 . Shopee opens new regional HQ in line with Singapore's push into digital economy . 9 September 2019 . The Straits Times.
  13. Web site: 3 September 2019 . Grand Opening of Shopee Headquarters Building . 20 September 2019 . PMO.
  14. Web site: Neo . Kristie . 14 June 2022 . Sea's e-commerce arm Shopee to cut staff across Southeast Asia . 2022-09-13 . Nikkei Asia . en-GB.
  15. Web site: Pandurangi . Nidhi . Read the memo Singapore billionaire Forrest Li sent to employees of Shopee, the Amazon of Southeast Asia, as the company's losses widen and it prepares for layoffs . 2022-09-20 . Business Insider . en-US.
  16. Web site: Choo . Yun Ting . 2022-09-19 . Some Singapore staff affected in Shopee's latest job cuts The Straits Times . 2022-09-20 . The Straits Times . en.
  17. Web site: The Natural Progression of C2C Business Models, Garena Shopee's Venture into B2C . ecommerce IQ . 22 May 2017 . 10 April 2018 .
  18. Web site: Sea Limited Form F-1 . U.S. Securities and Exchange Commission . 18 October 2017 . 10 December 2017 .
  19. Web site: Hwei . Liang . 2015-12-16 . CEO Chris Feng On Shopee's Rise In Southeast Asia, & Avoiding Carouhell . 2022-08-17 . Vulcan Post . en-US.
  20. Web site: Shopee partners up with Pos Malaysia . 2022-08-17 . Marketing Interactive . June 2016 . en-gb.
  21. Web site: Timmerman . Antonia . 10 May 2017 . Bizzy acquires Alpha; Shopee partners Pos Indonesia . 2022-08-17 . DealStreetAsia.
  22. Web site: Sahay. Priyanka. Srikanth. Chandra R. 25 November 2021. EXCLUSIVE: Singapore's Shopee Clocks Over 100,000 Orders A Day In India, Emerges As Amazon & Flipkart Challenger. 2021-11-29. Moneycontrol. en.
  23. Web site: LatePost . 2021-03-24 . Here's how Lazada lost its lead to Shopee in Southeast Asia (Part 2 of 2) . 2022-08-17 . KrASIA . en.
  24. Web site: 2019-10-18 . E-commerce platform Shopee confident of sustaining strong growth . 2019-10-22 . The Star Online . en.
  25. Web site: Tan . Zhixin . 22 August 2019 . iPrice report has Shopee down as the most popular shopping platform in Southeast Asia . 2019-10-22 . KrASIA . en-US.
  26. Web site: Balea . Jum . 27 September 2017 . Lazada slams Sea's claim that Shopee is the top regional ecommerce player . 14 April 2022 . Tech in Asia . en-US.
  27. Web site: Chew . Jeremy . 21 March 2018 . Who leads e-commerce in Malaysia? Lazada or Shopee? . 2022-08-17 . e27 . en.
  28. Web site: 6 April 2018 . Shopee found to be the most popular e-commerce site for Indonesian mothers . 14 April 2022 . Marketing Interactive . en-gb.
  29. News: Sea's Shopee opens new distribution center in Brazil . Reuters . November 1, 2023.
  30. Web site: 2021-10-19. Shopee enters France, Spain, and Poland in aggressive European expansion. 2022-01-13. KrASIA. en.
  31. News: Poh. Olivia. 1 March 2022. Sea's Shopee Exits France Just Months After Europe Foray. Bloomberg.
  32. News: Poh. Olivia. 2022-06-14. Sea Cuts Jobs in Shopping, Food in First Major Downsizing. en. Bloomberg. 2022-06-17.
  33. News: 2023-01-12. Platforma Shopee kończy działalność w Polsce. pl. TVN24. 2023-01-12.
  34. Web site: Niño Bautista . Roehl . 4 January 2022 . Shopee ramps up hiring in South Korea . 2022-01-13 . Tech in Asia . en-US.
  35. Web site: 2022-03-28 . Shopee to close India operations tomorrow. Read its message for shoppers . 2022-03-28 . Livemint . en.
  36. Web site: Petraeus . Michael . 2022-08-17 . Alibaba loses the world to Shopee, as S'pore's hit app now sells more than the Chinese giant . 2022-08-17 . Vulcan Post . en-US.
  37. Web site: 2022-09-09 . Sea's Shopee shuts operations in Argentina, Chile, Colombia, Mexico: Sources . 2022-09-14 . The Straits Times . en.
  38. Web site: 2022-09-08 . Shopee, la competencia de Mercado Libre, abandona la Argentina . 2022-09-20 . Perfil . es.
  39. News: Carmelle Lacuata . Rose . 7 June 2019 . Scammed? Why Blackpink fans spent tens of thousands of pesos for Shope meet-and-greet . ABS-CBN .
  40. News: Rose M. Afinidad-Bernardo . Deni . 7 June 2019 . Shoppe apologizes for alleged #ShopeeScam at BLACKPINK meet and greet in Manila . The Philippine Star .
  41. News: Stephen C. Canivel . Roy . 7 June 2019 . Online store Shopee probed for BLACKPINK promo . Philippine Daily Inquirer .
  42. Web site: Florene . Ursula . 2021-04-13 . Anger boils in Indonesia as Shopee allegedly underpays its couriers . 2022-08-17 . KrASIA . en.
  43. Web site: 2022-09-05 . Is Shopee a villain or victim in this turbulent economy? . 2022-09-13 . KrASIA . en.
  44. Web site: 高老头供应链 . 31 August 2022 . 跨境电商巨头Shopee大规模毁约:刚落地新加坡,被告知offer没了 . 2022-09-13 . Weibo.
  45. Web site: Sho-pissed: Buyers call for mass uninstall, deletion of Shopee after brand teases Toni Gonzaga as new endorser . 2022-11-10 . en-US.
  46. Web site: 30 September 2022 . Empty cart?: Shopee receives backlash after tapping Toni Gonzaga as endorser . https://web.archive.org/web/20221110061652/https://www.cnnphilippines.com/news/2022/9/30/Shopee-receives-backlash.html. dead. 10 November 2022.
  47. Web site: Shopee layoffs: Tech redundancies necessary for industry, say analysts .