This article first appeared in Chinese on Momentum Works’s WeChat platform, translated into English by our team.
This morning (11 September), many media outlets in China were forwarding a story: Shopee will launch a short video app in Southeast Asia to directly challenge TikTok. This also matches the speculation from many on why Sea needs to raise more than $6 billion dollars in its latest issuance of shares and senior debts this week.
However, it is unlikely that Shopee or Sea will see short video as a key short term focus. A few thoughts:
- Ecommerce platforms venturing into social is a very challenging undertaking. In US and China we have seen many failures. Sea’s management would understand this, and have done detailed research.
- Many in China attribute such failures to the company’s “gene”. But what is ‘gene”? It’s organisation, people and leadership. How to get it right? Find the right people, give them enough power, and use the whole organisation to enable/power them (not to drag them down as it is often the case).
- It is extremely difficult to do the above right. Sea Group did it when it ventured into ecommerce from gaming, but in short video, you can’t make it happen by simply poaching a few key employees of TikTok.
- TikTok is fast and aggressive in Southeast Asia: LinkedIn shows its employee count (including that of ByteDance) in Singapore has surpassed 1000. In Indonesia the whole shopping experience is already possible without leaving the app. Shopee and many other ecommerce platforms are already working with TikTok (for the latter’s traffic).
- The short video industry is not crowded – because there is NO viable competitor to TikTok in Southeast Asia and beyond. Facebook and Kuaishou are all far behind, and have their own organisational issues to deal with.
So the bigger possibility is that, as short video (including live streaming) is just showing its potential in Southeast Asia (and will penetrate into other regions sooner or later), Shopee has already done some trials in the area. These are limited, and it will need more support on short video for its ecommerce operations.
To really challenge TikTok, Shopee or Sea Group will need a great, exceptional leader in the social area. Finding such a person is extremely difficult, and will largely depend on luck.
So, no need to be overly excited about Shopee’s move into short video. You can instead focus more on its ecommerce globalisation.
Btw, announcing additional issuance right before 9.9 shopping festival is a great move. And do not forget we still have 10.10, 11,11 and maybe 12.12 before the end of the year: