Shopee scales its digital-first business as online shopping becomes the new normal
The growth of e-commerce during the COVID-19 pandemic presented an opportunity for Shopee to expand its services and drive the digital economy in Southeast Asia.
- More businesses are shifting towards building a super platform as consumers adopt contactless transactions and engagements
- Shopee’s mobile-first approach aims to enable digital payments in Southeast Asia and strengthen its merchant ecosystem
- Shopee and Visa sign five-year strategic partnership to power the digital growth in the region and provide services for MSMEs to digitalise their businesses
Tapping the potential of e-commerce market
In the digital era, companies are establishing their own super apps or super platforms to grow beyond their core business and expand to other services. Tencent, Alibaba, Grab, and GoJek are some of the companies that have leveraged their platforms and succeeded to scale their ecosystem of services. Among recent players aiming to expand their business is Shopee, an e-commerce platform in Southeast Asia and Taiwan.
Southeast Asia is still at the nascent stage of growing its digital economy. As the young and tech-savvy population comes online, the region is shaping to become one of the fastest growing e-commerce market globally. Terence Pang, chief operating officer of Shopee, highlighted the opportunity in building a digital-first business in Southeast Asia. “There is a large untapped potential in the fastest-growing e-commerce market in the world. Overall, the region’s gross merchandise value (GMV) grew 23% from 2018 to 2020, faster than that of China, India, and the US.”
Pandemic accelerated digital drive
Shopee exhibited leadership in Southeast Asia and Taiwan in the shopping category by average monthly active users and total time spent in-app on Android as of the second quarter of 2020 (2Q2020). According to mobile data and analytics platform App Annie, Shopee ranked first in the shopping category by downloads in Southeast Asia and was among the top three worldwide by downloads in the same category in 2Q2020.
In addition, the COVID-19 pandemic has proven the need for businesses to go digital. With mobility restrained due to enforced lockdowns, consumers have resorted to online and mobile transactions for their daily needs including banking and shopping. “On average, people are spending more time on Shopee a week with 95% off orders on mobile. For example, shoppers in Singapore spent 40% more time in-app per week,” Pang said.
In line with this, e-commerce is driving the adoption of digital payments. “In Indonesia, 80% of the total digital payment purchases on Shopee were by users aged 18 to 34. Older users are also starting to use digital payments as we saw a 45% increase in the digital payment transactions among users over the age of 50,” Pang added.
Shopee and Visa team up to boost e-commerce
Shopee and Visa forged a five-year strategic partnership in a bid to accelerate participation in the region’s digital economy. As part of the regional agreement, Shopee and Visa aim to support MSMEs as more businesses go online. To help businesses respond to the pandemic, Shopee launched a Seller Support Package and introduced Shopee University and Shopee Masterclass to equip sellers with online business knowledge.
Part of the regional agreement is to provide more options for consumers in e-commerce engagements and financial transactions. Other than offering digital payments, Shopee has launched credit cards with Maybank in Malaysia, Kasikornbank in Thailand and VPBank in Vietnam. Shopee and Visa will also launch similar co-branded cards in other markets including Indonesia.