After Southeast Asia, will Shopee create a legend in the Latin American market?

In June, Shopee opened online sales websites and social media links in Colombia and Chile. In February of the same year, Shopee announced the opening of a site in Mexico. Earlier in 2019, Shopee opened a site in Brazil. Is Shopee going to make a big push into the Latin American market?

We all know that Shopee has been occupying the Southeast Asian market for many years. In just a few years, Shopee has occupied the largest share of the Southeast Asian market. The editor checked Shopee's financial report last year and found that its annual turnover reached US$35.4 billion, which is twice that of 2019 and 57% of the total transaction volume of the entire Southeast Asian e-shopping platform.

After taking a bite of the Southeast Asian market, can Shopee continue to enter the Latin American market with its head held high and even surpass the former?

Latin America has twice as many countries as Southeast Asia and is geographically wider. Both have similar population sizes, both exceeding 600 million people.

Latin America has two large economies, Brazil and Mexico, which account for nearly 70% of the GDP of the six largest economies in the region. Meanwhile, the two largest economies in Southeast Asia, Indonesia and Thailand, only account for about 54% of the total GDP of the six largest economies. It is not difficult to understand why Shopee first chose Brazil and Mexico when planning the Latin American market.

On average, Latin Americans also have higher incomes than Southeast Asians. The GDP per capita in Latin America is $7,400, while Southeast Asia is only $4,900. This means that Latin Americans will have higher purchasing power. At the same time, the e-commerce penetration rate in Latin America is 6%, which is similar to Southeast Asia. The higher income and lower e-commerce penetration rate in Latin America create a huge market opportunity for Shopee .

Currently, Shopee is working to increase brand awareness and acquire more users through various promotions and marketing activities. These efforts have achieved certain results.

Shopee’s app is currently the second most active e-commerce app in Brazil, behind Argentinian e-commerce platform Mercado Libre. In less than two years, Shopee has gone from zero active users to more than half of its largest competitor, which is amazing.

Despite this, Shopee will still face many challenges.

In the short term, Shopee will need to spend a lot of money on sales and marketing to build its brand and acquire users in new markets.

Another cost that Shopee must manage is delivery costs. This cost is likely to be higher among Southeast Asian and other Latin American competitors. This is so because Shopee focuses on smaller cities in Latin America where logistics infrastructure is less developed.

In addition, many e-commerce companies such as Alibaba , Etsy, and Shein have also entered the Latin American market , intensifying competition in the region. However, where there is competition, there is a market . Can Shopee win another battle? We will have to wait and see.

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