Yesterday, Shopee Poland put out an announcement, saying that the site will close at 23:59 on 13 January 2023.
Thus, Shopee has exited all the new markets it had entered during the pandemic. The following slide came from the deck at Momentum Academy’s sharing: Off the record: Shopee’s turbulent 2023 two months ago. Back then, Poland was the only one standing (Shopee had entered Brazil before the start of the pandemic):
Momentum Works released Shopee in Poland report in October 2022, where we gave a systematic overview of Poland’s ecommerce market, logistics and payment infrastructure, competitive landscape (notably the 3 “A”s – Amazon/AliExpress/Allegro), Shopee’s tactics in the market, as well as whether it is indeed a launch pad for Europe.
In the conclusion of the report, we mentioned the following points:
Poland is a price-sensitive country, where buyers are more responsive to promotions and discounts compared to their counterparts in many parts of Europe. This has allowed Shopee to replicate its success formula in Southeast Asia that consists of promotions / shopping festivals, free shipping and cross border.
Using Poland as a springboard for the rest of Europe, while making logistic sense, is challenging as consumer behaviour in each country can be quite different. Shopee is learning the lessons Amazon and AliExpress had learnt (and are yet to overcome).
While Covid-19 has accelerated ecommerce adoption in Poland (as everywhere else), the inflation and war in Ukraine in 2022 have altered the dynamics drastically. The situation could get worse as US interest rates continue to climb, and winter is approaching.
“Hang in there” is probably the best strategy for the next three quarters at least.
Well, instead of hanging in there, Shopee chose to quit. It might not be a bad thing if it chooses to focus on Southeast Asia to eventually prove to investors that it can make money.
We will see that aside from TikTok Shop, whether Pinduoduo will come to disrupt the market.