What’s going on with Shopee in Latin America?

Every day, 100k+ smart people read our newsletter. You can sign up here.

Hello readers,

My knowledge of Latin America is pretty limited. Other than Peru’s Machu Picchu, the Uyuni Salt Flats in Bolivia, and “Despacito,” I know nothing else of the region. So imagine my surprise when I read the news that Shopee expanded to Brazil in late 2019.

What I definitely didn’t know was that Brazil’s ecommerce market is really huge: The country’s sales revenue hit US$20.5 billion within just the first five months of 2020. To put that number in perspective, Indonesia’s ecommerce revenue in 2019 stood at US$18.76 billion. Shopee has also benefited from this pandemic-induced ecommerce boom, and is now gearing up to scale in Latin America.

Today we look at:

• Shopee’s adventures in Latin America
• Sea Group’s optimistic goals for 2021
• Other newsy highlights such as Sea Group allocating US$1 billion for investments and, on the flipside, Alibaba cutting its startup investment by half

PREMIUM SUMMARY

Bagging up Latin America

Latin America’s ecommerce market is enormous – so much so that tech titans including Amazon and Alibaba have set up shop there. The region has also attracted Southeast Asian ecommerce firm Shopee, which entered Brazil in late 2019 and is now scaling up its operations in the region.

• Hola, Mexico: Shopee is growing aggressively in Latin America. In just a year since it entered Brazil, the company has scaled up to over 250 employees and is now expanding to Mexico.
• Shopee pi pi pi pi: The firm has also been aggressive in its marketing efforts, which looks to be paying off: Shopee saw more active users in January compared to other international players Amazon and Alibaba. However, the company still lagged significantly behind large regional businesses like MercadoLibre.
• Bring out the big guns: MercadoLibre is huge in Latin America: It alone accounted for around 25% of total ecommerce sales in the region last year. The company also has its own digital payments, credit solutions, and logistics network. So if Shopee chooses to make a major push in Latin America, it’s in for a huge fight.

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

FINANCIAL SPOTLIGHT

Sea’s ecommerce boom