Shopee’s success in Brazil justifies global expansion

Earlier this month, ecommerce platform Shopee shuttered its business in Poland.

This was the Sea Group subsidiary’s most recent exit, following four Latin American markets as well as France, Spain, and India.

Shopee’s departure from these countries raises the question of whether its foray outside its home markets of Southeast Asia and Taiwan was a waste of time and money. Should it, like fellow US-listed tech peer Grab, simply have stayed focused on Southeast Asia instead of attempting to go global?

The big exception

The answer to that question might depend on Shopee’s long-term performance in the one country we haven’t mentioned: Brazil, the firm’s first Latin American market.

The country is the economic linchpin of Latin America. It contains the region’s largest population and biggest economy, with 214 million people and a gross domestic product (GDP) of US$1.6 trillion in 2021, according to the World Bank.

Image credit: Timmy Loen

It also bears many similarities to Indonesia. Brazil’s economy accounts for around 40% of the six largest Latin American countries, much like Indonesia’s 37% share among Southeast Asia’s top six. Around 43% of Latin Americans are Brazilian while 47% of Southeast Asians reside in Indonesia. Both countries have similar levels of internet and ecommerce penetration, although Brazil’s GDP per capita is about 73% higher than Indonesia’s.

See also: Brazil could become Shopee’s biggest market, beating even Indonesia

The upshot of all this is that the Brazilian market is huge and could be a potential gold mine for Shopee going forward.

Topping the charts

Shopee’s app is performing well in Brazil and has shown staying power. Over the past three years, it has been among the two most downloaded shopping apps in the country, topping the list in 2021.

In terms of all-time downloads, it is the third most-downloaded shopping app in the country, after Latin American ecommerce giant MercadoLibre and the Brazilian platform of Dutch classifieds major OLX.

Shopee also boasts the most users. According to Data.ai estimates, it overtook MercadoLibre to emerge as the top shopping app by monthly active users last year.

Still in the red

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