Campaign Asia – As the world emerges from the shadows of Covid, ecommerce giant Shopee is facing some major challenges. Despite increasing its gross profit margin in the first half of 2022 to US$1.2 billion, the company has yet to turn a profit. This is due to a number of factors, including rising inflation and interest rates, as well as setbacks on its internationalisation plans…
Shufen Goh, Co-founder & Principal, R3:
The ecommerce landscape in Southeast Asia is a fragmented one, with no single platform dominating the region. Still, some platforms have made significant headway in their share of spending and time spent on platforms in some markets. Consumers are spoilt for choice and are not loyal or purchase exclusively from any platform.
There is still growth potential for these platforms in markets that are still growing in terms of internet penetration and digital/mobile adoption. Identifying and wooing these new users would be an opportunity to build a relationship early on with them.
Macroeconomic headwinds are cyclical, and there is enough past evidence of continued investments in the right places paying off handsomely. Platforms like Grab and Shopee have scaled at all costs with speed to acquire customers, but they haven’t yet meaningfully created a deeper relationship with customers superior to alternatives. The acquisition has been extraordinarily tactical and short-term.