The Singaporean giant Shopee is one of the newest and most innovative e-commerce websites to break into the Latin American region. Owned by Sea Limited it first targeted Brazil in 2019 and Mexico in 2021 as its entry points into LatAm. Owing to the success they have had especially in Brazil they have since opened online sites in Colombia and Chile with the hopes to drive this expansion. Dominated by local players, the e-commerce market in Latin America is not easily permeated. Large commercial stores such as MercadoLibre which is headquartered in Argentina and is present in eighteen (18) countries across the region. Country-specific retail and online stores such as OLX and Americanas in Brazil; Coppel in Mexico and Falabella in Chile are also strong players which attract a significant share of consumer revenue.
When Shopee came into LatAm there were also other multinational players that had a strong regional market presence. It is curious then that this Asian behemoth could overrun an e-commerce market on the other side of the globe. It is essential to note that the pandemic played a key factor in the success of Shopee in Latin America as most businesses worldwide opted to take their merchandise online with the creation of mobile applications to facilitate B2C commerce. Their overarching strategy is “mobile-first” hence the development of an e-commerce platform that is a mobile-centric, social-focused marketplace with integrated payment and logistics infrastructure and comprehensive seller services. The “flywheel” strategy employed in LatAm worked in their favour and the latest data on e-commerce “app” visits shows that Shopee has experienced hyper-growth of 885% in access rate over the last two (2) years.
Based on Sea Limited’s 2020 report, the company’s total revenue generated in LatAm has surpassed $1B USD and this number has increased since. In this same year, Shopee amassed approximately $790M USD, a 179.64% increase from the previous. This elevated number is not surprising as the company’s selling strategy has been seamless and advantageous to buyers, as not only are prices competitive, but they provide perks such as free shipping. In Brazil for example items costing 50 Brazilian reais (roughly $10 USD) or less are eligible.
The future outlook of Shopee looks positive, as part of its expansion plans are to eventually launch retail stores in the region and to diversify its product to adapt better to the LatAm market. If executed well, the multinational can expect to have high returns on their investment into the region and become, “the Amazon of emerging economies” as one author states. On the other hand, this decision has to be well-informed as countries like Brazil, the largest South American economy, can pose bureaucracy threats to the internationalisation process.
Broggini is a company that specialises in assisting companies with similar profiles as Shopee’s — or companies of any other business profile — to make research-based decisions which aid and accelerate their clients’ internationalisation process. If you are interested in doing business in the Americas, Europe, or in selected Middle East and African markets, please visit our website to book a preliminary meeting with one of our partners.