Shopee, the largest ecommerce platform in Southeast Asia, was in an all out expansion mode (new markets, new verticals) in 2021 – and its parent Sea Group’s market cap briefly hit US$200 billion.
2022 was a totally different matter. Its market cap is down almost 90%. Its headlines the entire year have been negative – geopolitics, product slowdown, people and profit issues, and probably most troubling – the rise of TikTok Shop.
To discuss some of the common questions and concerns from the community, Momentum Academy held an online event: “Off the Record: Shopee’s turbulent 2022” event on 17 November 2022.
More than 400 investors, founders and corporate executives registered for the event. Progressively we are publishing some of the key points of the presentation. In the third part, we got to know the competitive landscape around Shopee. Here is the fourth part:
Comparing Poland and Indonesia reveals quite interesting similarities (beyond the flags): The urbanization rate and economic growth rate are quite similar – even though Indonesia’s population is around seven times that of Poland. However, there is a big difference when it comes to invested capital. Indonesia received almost 10 times the amount of venture capital compared to Poland. So the question arises: Have we invested too much in Indonesia or too little in Poland?
Poland’s ecommerce infrastructure was already quite complete, with logistics networks, parcel lockers and bank-enabled digital payment quite prevalent in the country:
Shopee has brought its shopping festivals, tested and proven in Southeast Asia, to Poland. Polish consumers, especially those aged between 40-60 who had lived through the age of communism, are actually very responsive to campaigns and promotions – as the experience of scarcity made them want to buy more:
The brand ambassador is Slawomir – a musician who produces songs of the famous (in Poland) genre called disco polo or rock polo. For most people, his music is associated with happiness, freedom and a colorful life – values that are thereby also indirectly attributed to Shopee.
In Poland, there is a strong local player called Allegro, publicly listed in the Polish bourse. Allegro has been around since the late 1990s and has built a very sophisticated business. Their income stream is obviously much richer compared to Shopee, AliExpress or Amazon. Just for comparison, until recently the amazon.pl website was translated from German and the stores were operated from Germany:
Let’s take a look at Europe as a whole. It seems to be a heterogeneous and therefore a complicated market. Cultural differences make a one-size-fits-all strategy impossible and require companies to actually go to a market and find out what works and what does not:
Shopee France actually stopped being a serious player before the end of 2021 (i.e. six weeks into its entry), which was two months ahead of its announcement of departure, at the end of February. For whatever reason, French consumers were just not responsive to the campaigns and shopping festivals:
It remains unclear if this was goodbye forever or if Shopee will return with new resources at a later date.
You can download a complimentary copy of the full presentation of Off the Record: Shopee’s Turbulent Year 2022 as well as our other reports for a behind-the-scenes look at Shopee and the future of e-commerce in Southeast Asia.
If you want to watch a replay of the event on our YouTube channel, click here.
We also received a lot of interesting questions from participants which we have compiled and answered them – You can find them here.