Shopee to enter France in aggressive international push

SHOPEE, the e-commerce arm of Sea, is preparing to push into France as part of its global expansion outside of South-east Asia, two sources close to the company said.

A website for e-commerce sales in France was live on Tuesday (Oct 19). A check by The Business Times showed that the domain is operated by Shopee Singapore and registered to Sea's Singapore headquarters in the one-north district.

Shopee declined to comment on the matter.

France is the third market in Europe into which the online shopping platform has set foot, just weeks after its debut in the continent. The company is testing the waters in several new markets and has already made inroads into Spain and Poland, after an aggressive expansion into Latin America earlier this year. Shopee is also looking to make waves in India as it onboards sellers and ramps up hiring.

In France, Shopee will take on incumbents such as Amazon, Cdiscount, Leboncoin and eBay. Amazon is a key player in the market and held a 17.5 per cent market share for physical goods as of 2018, according to research by Kantar. France is also a top-performing market for AliExpress, noted venture builder Momentum Works.

Shopee is likely to muscle in with big incentives for shoppers, as early indications suggest. The website that went live displayed discount coupons and an offer of free delivery. Shopee has not listed any logistics partners, but has teamed up with Stripe to process payments on its site.

Shopee's aggressive internationalisation comes as parent Sea, currently valued at US$197 billion, raised US$6.3 billion in September in the largest equity offering of the year. Although the group has not spelled out specifically what the cash will be used for, industry attention has turned to the e-commerce expansion - still a heavily loss-making venture.

This financial firepower comes with strings attached. Shopee could be under pressure to replicate in Europe the meteoric growth it enjoyed in its home market, but industry players reckon it is still too early to tell whether it will achieve the same traction.

Having a strong team to execute its plans is crucial. "If you look at the way Shopee launches certain businesses - they build a competent team and once they are confident that this team can execute, they go ahead," said Li Jianggan, chief executive of Singapore-based Momentum Works. "Now we're living in this environment where they just raised US$6.3 billion, and they probably have lots of expectations to deliver the growth."

He added that there have been slight concerns from investors about whether key management personnel can effectively manage people across different geographies.

Shopee seems to be following a specific playbook when expanding in newer markets. "Their approach of entering new markets looks at whether they are equipped to offer services that are better than local players, rather than going in blindly just because there are no big players in the target markets," said Kristine Lau, an associate at global research firm Third Bridge.

Research from Facebook and Bain have suggested that online retail penetration in Brazil was 8 per cent in 2021, close to South-east Asia's 9 per cent, implying an underserved market in which Shopee can grow.

The company took just two years to become the most downloaded shopping app in Brazil. It lured users to its platform with marketing campaigns and increased user engagement through easy-to-play games.

Despite its international push, Shopee's hiring plans show that the company is still not planning on abandoning its lead as the top e-commerce player in South-east Asia. It recently posted over 1,600 new openings on its career platform - concentrated in Singapore, Manila and Ho Chi Minh City - as it gears up for battle in its home markets.

The shares of Sea, which is listed on the New York Stock Exchange, rose 0.7 per cent, or US$2.59, to close at US$357.09 on Monday (Oct 18).

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