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Shopee

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 Pte. Ltd.
Shopee
Company typeSubsidiary
IndustryE-commerce
Founded5 February 2015; 9 years ago (2015-02-05)
Queenstown, Singapore
Headquarters5 Science Park Drive, Shopee Building, Singapore 118265
Area served
11 countries and territories
Key people
Forrest Li (Founder)
Chris Feng (CEO)[1]
ParentSea Limited
SubsidiariesShopee Japan Co., Ltd[2]
Websiteshopee.com

Since 2021, Shopee is considered the largest e-commerce platform in Southeast Asia with 343 million monthly visitors [citation needed]. 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

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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-story regional headquarters at Singapore Science Park. The new building spans 244,000 square feet (22,700 m2) 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

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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]

Shopee had also received extreme international attention in 2019 after signing Portuguese and Juventus superstar Cristiano Ronaldo to be the ambassador for the company. That same year Shopee's 9.9 Super Shopping Day campaign featured a video of Ronaldo dancing to "Baby Shark". The video went viral and became a meme in the football community, reaching 19 million people. The campaign resulted in a doubling of Shopee's gross orders and a more than tripling of its e-commerce sales.[24] However the ad was panned by football fans due to nature of the company and also CR7 taking part in the endorsement for money. With fans stating "“This gets more crazy to me every time I watch it,” one fan wrote.

Another said: “I’m sure the number of zeroes on the cheque made it worth the embarrassment!!”. [25]

Market share

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Availability of Shopee by country as of 12 January 2023:
  Available
  Previously available
  Non-consumer operations

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.[26]

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.[27] 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."[28]

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.[29]

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%).[30]

In 2019, Shopee launched a localised site in Brazil. The site was Shopee's first in Latin America and outside Asia.[31] By 2023, the company said it was doing business with over three million local merchants.[31] 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.[4][32] Shopee exited France and Spain on 6 March and 17 June 2022 respectively, leaving only Poland with operations in Europe.[33][34] Eventually, Shopee left Europe with an announcement of the closure of its Polish operations on 12 January 2023.[35]

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.[36]

In November 2021, Shopee entered the Indian market with a soft launch.[4] It clocked 100,000 orders a day and has over one million app installations on the Google Play Store in India.[22] 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.[37]

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.[38]

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.[39][40]

Controversies

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Meet-and-greet with Blackpink

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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.[41][42] Several fans reported receiving notifications that they had won tickets, but which were unilaterally retracted afterward by Shopee.[citation needed] 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.[43][needs update]

Underpaid couriers in Indonesia

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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.[44]

Rescinded job offers

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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.[14][45][46]

Toni Gonzaga endorsement

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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.[47][48]

2022 layoff

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In 2022, Shopee had to lay off 600 people which amounted to 3% of its employees.[49]

References

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  1. ^ "Chris Feng".
  2. ^ "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。" (in Japanese). 18 August 2021.
  3. ^ Lee, Yoolim (8 May 2017). "Garena Rebrands as Sea After Raising $550 Million in New Funding". Bloomberg. Retrieved 21 March 2018.
  4. ^ a b c "As Shopee expands aggressively around the world, will it become the 'Amazon of emerging economies'?". KrASIA. 12 January 2022. Retrieved 13 January 2022.
  5. ^ Econsultancy (17 March 2018). "Shopee: Localizing Ecommerce in Southeast Asia and Taiwan". Econsultancy. Retrieved 22 March 2021.
  6. ^ "Level Up Your E-Commerce Game: Setting Up Google Analytics 4 Funnel Tracking Like a Pro! | Report Garden". Marketing Agency Software | Reportgarden. Retrieved 30 May 2024.
  7. ^ Yap, Jacky (3 August 2015). "Garena And Its Quest To Take Down Carousell With Newly Launched Shopee App". Vulcan Post. Retrieved 17 August 2022.
  8. ^ Ting, Lisabel (9 September 2015). "Safe, easy shopping with Shopee | The Straits Times". The Straits Times. Retrieved 17 August 2022.
  9. ^ Lee, Terence (6 November 2017). "How Shopee plans to reign supreme in Southeast Asia's fashion ecommerce scene". Tech in Asia. Retrieved 17 August 2022.
  10. ^ Tegos, Michael (24 November 2015). "Garena's Shopee could be on its way to beating Carousell in Asia". Tech in Asia. Retrieved 17 August 2022.
  11. ^ Husain, Osman (11 December 2015). "5 disruptive ecommerce startups we saw in 2015". Tech in Asia. Retrieved 17 August 2022.
  12. ^ Heng, Melissa (3 September 2019). "Shopee opens new regional HQ in line with Singapore's push into digital economy". The Straits Times. Retrieved 9 September 2019.
  13. ^ "Grand Opening of Shopee Headquarters Building". PMO. 3 September 2019. Retrieved 20 September 2019.
  14. ^ a b Neo, Kristie (14 June 2022). "Sea's e-commerce arm Shopee to cut staff across Southeast Asia". Nikkei Asia. Retrieved 13 September 2022.
  15. ^ 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". Business Insider. Retrieved 20 September 2022.
  16. ^ Choo, Yun Ting (19 September 2022). "Some Singapore staff affected in Shopee's latest job cuts | The Straits Times". The Straits Times. Retrieved 20 September 2022.
  17. ^ "The Natural Progression of C2C Business Models, Garena Shopee's Venture into B2C". ecommerce IQ. 22 May 2017. Retrieved 10 April 2018.
  18. ^ "Sea Limited Form F-1". U.S. Securities and Exchange Commission. 18 October 2017. Retrieved 10 December 2017.
  19. ^ Hwei, Liang (16 December 2015). "CEO Chris Feng On Shopee's Rise In Southeast Asia, & Avoiding Carouhell". Vulcan Post. Retrieved 17 August 2022.
  20. ^ "Shopee partners up with Pos Malaysia". Marketing Interactive. June 2016. Retrieved 17 August 2022.
  21. ^ Timmerman, Antonia (10 May 2017). "Bizzy acquires Alpha; Shopee partners Pos Indonesia". DealStreetAsia. Retrieved 17 August 2022.
  22. ^ a b 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". Moneycontrol. Retrieved 29 November 2021.
  23. ^ LatePost (24 March 2021). "Here's how Lazada lost its lead to Shopee in Southeast Asia (Part 2 of 2)". KrASIA. Retrieved 17 August 2022.
  24. ^ "Shopee x Cristiano Ronaldo". The Drum. Retrieved 27 October 2024.
  25. ^ Wilson, Scott (2 March 2022). "Cristiano Ronaldo's 'Shopee' advert in 2019 is still terrible". GiveMeSport. Retrieved 27 October 2024.
  26. ^ "E-commerce platform Shopee confident of sustaining strong growth". The Star Online. 18 October 2019. Retrieved 22 October 2019.
  27. ^ Tan, Zhixin (22 August 2019). "iPrice report has Shopee down as the most popular shopping platform in Southeast Asia". KrASIA. Retrieved 22 October 2019.
  28. ^ Balea, Jum (27 September 2017). "Lazada slams Sea's claim that Shopee is the top regional ecommerce player". Tech in Asia. Retrieved 14 April 2022.
  29. ^ Chew, Jeremy (21 March 2018). "Who leads e-commerce in Malaysia? Lazada or Shopee?". e27. Retrieved 17 August 2022.
  30. ^ "Shopee found to be the most popular e-commerce site for Indonesian mothers". Marketing Interactive. 6 April 2018. Retrieved 14 April 2022.
  31. ^ a b "Sea's Shopee opens new distribution center in Brazil". Reuters. 1 November 2023.
  32. ^ "Shopee enters France, Spain, and Poland in aggressive European expansion". KrASIA. 19 October 2021. Retrieved 13 January 2022.
  33. ^ Poh, Olivia (1 March 2022). "Sea's Shopee Exits France Just Months After Europe Foray". Bloomberg.
  34. ^ Poh, Olivia (14 June 2022). "Sea Cuts Jobs in Shopping, Food in First Major Downsizing". Bloomberg. Retrieved 17 June 2022.
  35. ^ "Platforma Shopee kończy działalność w Polsce". TVN24 (in Polish). 12 January 2023. Retrieved 12 January 2023.
  36. ^ Niño Bautista, Roehl (4 January 2022). "Shopee ramps up hiring in South Korea". Tech in Asia. Retrieved 13 January 2022.
  37. ^ "Shopee to close India operations tomorrow. Read its message for shoppers". Livemint. 28 March 2022. Retrieved 28 March 2022.
  38. ^ Petraeus, Michael (17 August 2022). "Alibaba loses the world to Shopee, as S'pore's hit app now sells more than the Chinese giant". Vulcan Post. Retrieved 17 August 2022.
  39. ^ "Sea's Shopee shuts operations in Argentina, Chile, Colombia, Mexico: Sources". The Straits Times. 9 September 2022. Retrieved 14 September 2022.
  40. ^ "Shopee, la competencia de Mercado Libre, abandona la Argentina". Perfil (in Spanish). 8 September 2022. Retrieved 20 September 2022.
  41. ^ Carmelle Lacuata, Rose (7 June 2019). "Scammed? Why Blackpink fans spent tens of thousands of pesos for Shope meet-and-greet". ABS-CBN.
  42. ^ Rose M. Afinidad-Bernardo, Deni (7 June 2019). "Shoppe apologizes for alleged #ShopeeScam at BLACKPINK meet and greet in Manila". The Philippine Star.
  43. ^ Stephen C. Canivel, Roy (7 June 2019). "Online store Shopee probed for BLACKPINK promo". Philippine Daily Inquirer.
  44. ^ Florene, Ursula (13 April 2021). "Anger boils in Indonesia as Shopee allegedly underpays its couriers". KrASIA. Retrieved 17 August 2022.
  45. ^ "Is Shopee a villain or victim in this turbulent economy?". KrASIA. 5 September 2022. Retrieved 13 September 2022.
  46. ^ 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". Weibo. Retrieved 13 September 2022.
  47. ^ "Sho-pissed: Buyers call for mass uninstall, deletion of Shopee after brand teases Toni Gonzaga as new endorser". Retrieved 10 November 2022.
  48. ^ "Empty cart?: Shopee receives backlash after tapping Toni Gonzaga as endorser". 30 September 2022. Archived from the original on 10 November 2022.
  49. ^ "Shopee layoffs: Tech redundancies necessary for industry, say analysts".
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