Singapore-based Shopee takes India's e-commerce market by storm

Becomes second-most downloaded app on Google Play; overtakes Amazon, JioMart, Myntra in daily, monthly active users

Shopee entered the Brazilian market focusing on lower ticket items followed by the growth of high value products
Surajeet Das Gupta New Delhi
3 min read Last Updated : Jan 22 2022 | 6:07 AM IST
It’s a worrying time for e-commerce players like Meesho, Amazon, and Ajio because Singapore-based Shopee, launched only in November, has become the new love of Indian consumers.

It has shot into the coveted position of being the second most downloaded app in India (just behind Meesho) according to Sensor Tower figures for January. It has touched 21 million app downloads and over 20,000 sellers before the month is even over. 

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In terms of daily and monthly active users, it has overtaken Amazon, JioMart, Myntra and Ajio and is just behind Meesho and Flipkart, according to a study by J P Morgan Asia Pacific Research. A study by Apptopia shows that Shopee has 10 million daily active users and over 21 million monthly active users to date.    

Shopee is focusing on long tail categories. According to JP Morgan, 35 per cent of its gross merchandising value is accounted for by fashion, followed by mobiles and accessories (19 per cent) and home and furniture (14 per cent). It also sells electronics, consumer appliances, groceries, and health and beauty products.

The platform has differentiated itself from most other competing e- commerce players, with the exception of Meesho. It is offering free delivery to consumers and does not charge sellers a commission. Its monetisation model is similar to Meesho’s which also depends primarily on advertising.

However, unlike its competitors, Shopee does not have its own logistics so it has tied up with independent platforms like Delhivery. As a result, the delivery time is longer than its competitors. But the pricing and discounts it offers are more or less comparable to its competitors, especially Meesho’s.  

Shopee is part of the Singapore-based and NYSE listed consumer internet giant, the Sea group. It is one of the largest e-commerce platforms in south east Asia and Taiwan with over 343 million monthly visitors.

Started in 2015, it also serves consumers across Latin America in Brazil, Mexico, Chile and parts of Europe such as Poland, Spain and France.

Its launch in India, though, came under attack from the Confederation of All India Traders which urged the government to ban it as a ‘Chinese’ company violating FDI rules. The confederation alleged that the company has come to India through a complex structure to get  Chinese investment in through the back door.

Chinese company Tencent, which had invested in Sea when it listed in the NYSE, raised $3 billion this month by selling a part of its stake in the company. It continues to hold a 18.7 per cent stake.

According to J P Morgan, Shopee’s expansion in ASEAN and Brazil  could be the same playbook it will use for India too, assuming the company has long term aspirations here and is not merely testing the market.

Shopee entered the Brazilian market focusing on lower ticket items followed by the growth of high value products. Then, it hired local management and went in for an aggressive marketing and sales strategy.  

Topics :ecommerceonline retail

First Published: Jan 22 2022 | 6:07 AM IST

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