Sampling, advertising and events: Shopee ramps up strategy in 2022

E-COMMERCE platform Shopee is pulling out all the stops to capture a greater market share this year. The company, owned by New York-listed Sea, plans to launch more shopping events for the luxury segment and invest deeper in advertising, regarded as a key monetisation strategy for the group.

A dominant force in South-east Asia, Shopee has more ambitious plans to become a global brand following rapid expansion into new territory over the past two years. It has a presence in 16 markets across Asia, Latin America and Europe, taking on incumbents in India, France, Poland and Brazil.

Shopee’s chief operating officer Terence Pang said Shopee's strategy is to intertwine its services tightly with consumers' lives - a tactic also pursued by South-east Asian tech majors such as Grab and GoTo. (see amendment note)

It's the reason why Shopee ventured outside of its core business of e-commerce to provide food delivery services in Indonesia, Malaysia and Thailand. "It's not just the food delivery business that we're interested in, but how do I engage and find more ways to feature in and be a part of my consumer's lifestyle? That's what we're going after," said Pang, in a speech at the Shopee Brands Summit on Thursday (Jan 13).

Investors piling into Shopee-parent Sea during the pandemic sent the group's share price skyrocketing, making it the South-east Asia's most valuable company. E-commerce was seen as a massive engine of growth and from Q1-Q3 last year, the unit recorded a 88.9 per cent year-on-year growth in gross merchandise value to US$44.4 billion. New users increased 1.4 times.

Shopee Mall, a space for brand owners and authorised distributors, saw an 8 times increase during the pandemic in the number of users shopping online at least once a month.

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A new mega shopping event will be introduced on Mar 15 to increase the number of deals for shoppers in the first half of the year, the company said on Thursday.

Four new Shopee Premium regional campaigns will be launched to cater to increasing demand for premium and luxury products. Traffic on Shopee Premium has grown 8 times in traffic, with shoppers outside tier 1 cities contributing to more than half of purchases.

Both Shopee and Lazada have been aggressively launching sales events, but questions have been raised about potential consumer fatigue and whether the platforms have adequate infrastructure to consistently support a seamless buying experience.

Industry observers have noted that the strategy is to develop a muscle memory for shopping on these players' platforms - a sentiment echoed by Shopee's Pang.

"We have successfully managed to inculcate some habits with our consumers. They understand the cadences and have integrated shopping into their lives. And I think that's really the first phenomenon that we think will stay beyond Covid," he said.

Advertising will be another key push for the company. Last year, sales generated by Shopee Ads tripled from the first-half of the year to the second-half.

Brands on Shopee Mall can now buy new homepage banner display ads to showcase their campaigns, the company said on Thursday. Shopee will also be one of the first e-commerce platforms to integrate Facebook Ads for online sellers.

And with consumers looking to try products before buying them online, the company will be building a sampling channel to help brands in the FMCG, beauty and toys, and kids and babies categories attract new shoppers.

Shoppers can buy product samples and receive vouchers for their next purchase. Brands that participated in the pilot of this initiative at last year's 12.12 shopping event recruited up to 90 per cent of new buyers, said Shopee, without specifying the lower range of results.

Amendment note: Due to a source error, an earlier version of this article included inaccurate figures cited in Pang's speech, about average time spent by users on Shopee's platform.