How Shopee can succeed in Poland, India

Fresh from its landmark US$6 billion fundraise, Shopee now appears to be testing the waters in Poland and India.

Though nascent, these experiments seem to hint at Shopee’s global ambitions. The ecommerce titan is already leading in Southeast Asia, and it’s also made considerable headway in Latin America.

What’s less clear is Shopee’s motives and strategies in these new markets. Why did the firm pick India and Poland? Can it achieve success by taking a page out of its playbook? Does its foray into new markets reveal a grander strategy, or is it just an opportunistic play?

New frontiers or familiar ground?

India and Poland have some similarities with the other markets that Shopee has dominated.

In 2020, both countries counted China among the top markets where cross-border shopping products originated from. One estimate suggests that Chinese products made up 53% of Polish cross-border ecommerce purchases that year.

Shopee’s expertise in facilitating cross-border flows between China and other regions, as well as its direct presence in Chinese cities, lets it take advantage of the consumer demand for Chinese goods in both markets.

Still, Shopee may look at the potential for local-to-local purchases instead. In Brazil for example, the firm now counts more local domestic sellers than cross-border sellers.

Having cracked Southeast Asia by being mobile-first, the marketplace sees 95% of orders being made on its mobile app.

Mobile commerce in all four countries above is expected to grow at double-digit compound annual growth rates. Shopee may be expecting to ride this wave in Poland and India, which still lag behind Indonesia and Brazil in mobile shopping.

Shopee’s two new markets also have immature ecommerce ecosystems. Just 7% of total retail sales in India this year come from ecommerce. Meanwhile, according to a JP Morgan analysis, the average online spend per capita in Poland is just a quarter of the average in Europe, and only 16% of Polish online shoppers have made cross-border purchases so far.

Saison Capital partner Visa Kannan spots another link in the chain. “What all of Shopee’s target markets have in common … is a young, internet-savvy population, with 5% to 6% sales coming from online retail.” Kannan was formerly the senior vice president of business at Indian ecommerce firm Grofers.

Straight shot or curveball?

Step one or a one-off?