How Shopee plans to make the pandemic windfall a permanent gain

As economies wax and wane between sweeping lockdowns and tentative re-openings, Southeast Asia's largest ecommerce company, Shopee, is working with brands to build nimble offerings and campaigns that suit the fluid environment.

The retailer has enjoyed an increase in onboarding by companies that are suddenly more interested in ecommerce thanks to plummeting bricks-and-mortar sales. Now Sea Group-owned Shopee, like its peer ecommerce platforms, faces a twofold challenge. First, it must make sure it delivers for its new and existing clients while being mindful of shifting consumer sentiments as the pandemic continues. Secondly, it has to encourage its new brands to stick around so it can turn the pandemic windfall into long-term success. 

Shopee has had a unique view of the pandemic's waves, seen through the lens of incoming orders. For example while some countries such as Indonesia and Malaysia were early into lockdowns and confinements, Singapore with its circuit-breaker was a belated entrant. Online, this meant consumer preferences switched, at different times in each market, from essentials to work-from-home needs to office gear, as consumers tried to adjust. 

Ian Ho, Shopee's regional managing director, told Campaign Asia-Pacific that as ecommerce has become the main shopping channel, purchases have followed a set path across geographies. While consumers initially flock to the site for essentials such as toilet paper, cleaning supplies, diapers and baby food, they then move onto WFH requirements such as computer accessories (microphones and monitors), plus educational aids and toys as they spend more time confined with children. As economies slowly and inevitably open up, Shopee has seen interest in segments such as cosmetics morph from easy home skincare offerings to makeup products for a gradual return to the office.

To try to target these shifting consumer trends, Shopee has adopted a two-pronged strategy. While it has been working to bring brands—big and small, homegrown and multinational—onto its platform, it has also been working to devise country-specific campaigns, depending on each country's lockdown state.

Even before the pandemic hit, Southeast Asia was a high-growth market for ecommerce. For example, there are 360 million Internet users in Southeast Asia, and 90% of them connect to the Internet primarily through their mobile phones, according to an e-Conomy SEA 2019 report from Google. While the market has tripled in four years to cross $100 billion in 2019, it was also forecast to exceed $300 billion by 2025. However, the decimation of other online categories, such as ride-hailing and online travel, is likely to mute this optimistic forecast, even if ecommerce picks up some of the slack. 

Given these statistics, Shopee is pushing brands to do more online. In the case of Reckitt Benckiser  and the Dettol brand, Shopee offered consumers cost savings from exclusive promotions and shared content through a Mythbusters-style website. Elsewhere, with L'Oreal's Maybelline brand, Shopee helped sell the popular lipstick collection, Superstay Matte Ink, in Singapore, Thailand and Indonesia, offering shoppers a chance to participate in a Tiktok #SuperstayChallenge using a lip-color changing filter.

With P&G, the owner of brands such as Pantene, Venus and Pampers, Shopee has launched Show Me My Home, a microsite offering products categorised by rooms. A staggered launch of the microsite will be available to consumers in key SEA markets including Malaysia, Indonesia, Singapore, Vietnam, Thailand and the Philippines.

"2020 has changed the way people live, work, and shop online," says Ho. "The current situation has materially accelerated a shift to online lifestyles that is broad, deep, and irreversible."

To sustain consumers' interest in ecommerce, Shopee has been onboarding dozens of brands onto its platform, from across Southeast Asia and the world, to sustain growth. "As offline-focused companies, these sellers have been reluctant to go online," Ho says. "However, the pandemic has pushed them to change their mindset." 

To make them stick with Shopee, the ecommerce platform has pieced together a short onboarding process, offers help with supply-chain issues and has offered seller support packages (education and marketing funds) including aid such as vouchers and free shipping to help businesses weather the crisis. 

The platform's formula seems to be working, with brands queuing up to be seen. Ho points to international brands such as Sasa (which closed its physical stores in Singapore and partnered with Shopee for its online retail strategy in February 2020), Adidas, Under Armour and most recently Muji, as examples of new brand tie-ups for the platform. Southeast Asia native brands, such as Topvalue.com (Thailand), Matahari Department Store (Indonesia), Buttonscarves (Indonesia), Naelofar (Malyasia), have all benefited from coming online during the pandemic, Ho says.

Enroute, Shopee has unearthed some new opportunities during these promotions. For example, Malaysian modest wear brand Naelofar launched an official store on Shopee to widen its digital footprint and was able to leverage this presence to market its special Raya Collection nationwide. "To penetrate deep into each market, we ensure that we personalise products available to consumers, especially at this time," Ho says. "We want consumers to come to Shopee for the convenience of shopping online and return a second and third time for our catalogue and pricing."

Shopee's financials, revealed in parent company Sea's latest quarter results, show positive trendlines. Gross orders reached 429.8 million in the latest quarter, an increase of 111.2% year-on-year, from 203.5 million in 2019. In April 2020 alone, gross orders grew over 140% year-on-year. In key markets such as Indonesia, mobile wallet total payment volume exceeded $1 billion a year after launch. 

Sustaining this breathless growth might be dependent on Shopee not simply adding more sellers and brands and consumers to the mix, but also convincing shoppers that they can find products that suit highly personalised requirements, says Ho. The firm has recently launched a membership-based service called Shopee Moms Club, which enables mothers to find products and brands for their needs. To build a sticky business, some products are only available to members, who also get discounts on items such as diapers and helps the platform build stronger ties with this group. Now, Shopee wants to do the same thing with other segments such as health and beauty.