Is Shopee a threat to MercadoLibre’s dominance in Brazil?

Ecommerce in Latin America is growing fast, and it has attracted international heavyweights including Amazon and Alibaba, all vying for a spot in the lucrative market.

Similarly, Southeast Asia’s Sea Group entered the ring in late 2019, setting up its ecommerce arm Shopee in Brazil. After a year of operations has, not only has Shopee scaled up in the country, but it’s also expanding to Mexico.

Brazil is still a gold mine of untapped opportunities, but gaining a foothold there is challenging. Its logistics sector is still nascent, and ecommerce penetration is low compared to countries like the US or China. Moreover, the market is dominated by regional players like Argentinian ecommerce firm MercadoLibre.

This is not to say that Shopee doesn’t have what it takes to make inroads in the region, but it does have a lot on the plate. While establishing itself in a new market, the company is fending off rivals at home, and many of them have dialed up their efforts amid the Covid-19 pandemic.

Finding its footing

Shopee made its foray into Brazil in October 2019, initially aiming to boost the country’s cross-border business.

In just a year, the unit went from a pilot initiative to a team of over 250. The company has also recently started to work with local sellers, according to its website.

Photo credit: Shopee

Shopee seems committed to scaling its operations in Brazil.

Pine Kyaw, the country head of Shopee Brazil, was formerly the managing director of the company’s high-growth Vietnam operation.

Shopee Brazil has poached a number of senior staff from MercadoLibre and is currently recruiting for 48 positions in São Paulo. But while the growth in Shopee’s headcount in the country seems rapid, it’s still a drop in the bucket compared to the thousands of employees that the company has in other markets.

Tech in Asia reached out to Sea about its expansion in Latin America, but the company declined to comment.

It’s evident that Shopee has been trying to build a stronger presence in the region. In February, it rolled out an app for Mexico, its second Latin American market.

Biting off more than it can chew?

Challenging but lucrative