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Singapore's Shopee is Now Bigger Than China's Alibaba
ECONOMY Singapore

Singapore's Shopee is Now Bigger Than China's Alibaba

Michael Petraeus from Vulcan Post noted almost precisely a year ago that by 2022, Sea's e-commerce app Shopee would surpass even the powerful Alibaba in international markets (i.e., everywhere outside of China), based on its development trajectory.

It is now an actuality thanks to Sea Ltd.'s most recent findings.

Shopee recorded US$1.7 billion in revenue for the three months that ended on June 30, 2022, compared to US$1.57 billion (a three percent decline) reported by Alibaba for all of its overseas operations, including Lazada, AliExpress, Trendyol, and Daraz combined.

Given the disparity in scale between Sea Ltd. and Alibaba, as well as the Chinese juggernaut formed by Jack Ma's considerably earlier entrée into the foreign markets, this is all the more amazing.

Considering the contrast in approach, it is also a valuable lesson.

Keterangan Gambar (© Pemilik Gambar)

Shopee, which was established in 2015, was built from scratch by Sea, who paid for it with revenue from the lucrative digital entertainment company Garena.

Alibaba, meanwhile, pursued a multifaceted strategy. Established in 2010, its own retail portal, Aliexpress, linked consumers worldwide to Chinese producers, and a series of acquisitions allowed it to purchase an entire position in a number of significant markets, including Turkey (Trendyol), Pakistan (Daraz), and Southeast Asia (Lazada).

While Shopee continues to grow its business, it has lagged behind, having just named its fifth CEO at Lazada in the past five years.

Although we used to compare Shopee and Lazada, the latter is now three to four times smaller than the former, which handled nearly as much (US$19 billion) in gross merchandise value in the most recent quarter alone as Lazada did in all of 2021 (US$21 billion).

However, it appears that Alibaba's management anticipated the company to simply flourish abroad based on its position, brand, and money — without a clear strategy on how to expand the business outside of its home market. Shopee's performance shows that it did not have to be this way.

The belief that it was only logical for the corporation to expand its sphere of influence in its closest vicinity in Southeast Asia appears to have been the foundation for the purchase of Lazada.

It must have felt like a sure thing to purchase the market leader at the time. Alibaba provided help for a well-established, well-known brand with international reach. Could a tiny upstart compete with the two combined giants?

Alibaba, though, didn't just get a bloody nose in SEA.

The new EU legislation, which eliminated VAT exemptions for low-value goods imported from China, abruptly put an end to its most well-known international endeavor, Aliexpress. Given that the tax raises prices by 20–25%, the price edge suddenly became less pronounced. Alibaba noted a decline in orders on AX as a result in its yearly report.

However, there was and is money to be earned in Europe, as Shopee's entry into Poland, where Aliexpress has long enjoyed some degree of popularity, shows.

Even now, Alibaba receives more visitors to its retail website than Shopee does. However, it also demonstrates that there was room for additional development if Alibaba had simply put in the same amount of effort as its Singaporean rival.

The company's entire global expansion was carried out very cheaply and with a lack of enthusiasm. Despite being years ahead of Shopee in terms of international recognition, Aliexpress concentrated on selling Chinese items and fostering organic growth rather than creating a platform with a global presence, operations, and marketing.

Even now, as Lazada executives discuss quintupling the company's GMV by 2030 and rumors of an entry into Europe circulate, it's difficult to escape the impression that nobody there has any vision or strategy for how to do it.

Naturally, this is fantastic news for Shopee.

Source: VulcanPost.com, NewsAzi.com

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