[Case study] How to sell on Shopee?

August 1 2022

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What is Shopee? It is a new player in the e-commerce market. Over the past few years, it has established a massive career in Asia, entering Poland in 2021. Along with its aggressive sales strategy and advertising campaign, it may prove to be an important market player. Thanks to a powerful advertising campaign, launched in May 2022, it has already become the third most important e-commerce platform, right after Allegro and Aliexpress. It was possible by pumping tremendous amounts of money into the market and flooding it with advertisements and special offers for customers and traders alike. How to sell on Shopee? Is it even profitable?

Shopee – what is it and who is it for?

Shopee is an e-commerce platform similar to Amazon, Aliexpress or Allegro. It allows sellers to offer their goods while Shopee itself acts as a massive aggregator of products and bargains, as well as a place where it is possible to sell and promote them. That is right, bargains. When entering the Polish market, Shopee targeted its still undeveloped part – customers and sellers who have not yet been convinced by the Internet, afraid of higher prices. This is why, for the first few months, the platform was tempting with zero commission on sales (which, however, was introduced in July 2022).

This is definitely an issue worth fighting for. According to research conducted by various entities, around 87% of customers shop online. The problem arises when these figures are analysed in detail. Only 35% of customers shop once a month, and very active consumers, for whom the Internet is the primary shopping channel, account for 13%. These numbers show that the potential for e-commerce development in Poland is still great. With the dynamic development of the warehouse space, the increasing number of companies selling online and the professionalisation of marketing activities, this market remains spacious. All the more so since, in terms of Central and Eastern European standards, this country has potential. Approximately 38 million Poles and at least hundreds of thousands of Ukrainians (who have been living here or moved here permanently after the war) create large and promising growth potential.

This is how Shopee app looks like

Dynamic changes in Polish e-commerce

The market is constantly opening up. Not only to Ukrainians, but also to untapped consumer groups. People who buy online occasionally, unconvinced individuals and seniors are perfect targets for the giant. It also includes people who converted to e-commerce after the COVID-19 situation. Many customers have been persuaded by the convenience of shopping and no longer want to return to brick-and-mortar shops. In Poland, brick-and-mortar shops recorded a decline of 12 percentage points while online channels increased their sales by 16 percentage points.

Despite the massive boom in recent years, especially due to COVID, the Polish market is still wildly promising. Customers buy enormous numbers of products, and they will buy even more. As I write these words in July 2022, inflation of nearly 16% is raging through the country. This is also driving online shopping and stimulating the search for bargains. In Poland, e-commerce is based on the sale of electronics and non-essential items (such as books and cosmetics). So far, online grocery shopping has gained interest, but it is still not a large percentage of transactions. However, this may change over time.

Especially since the dynamics of the Polish market and its structure keep changing. While in 2018-2021, the growth resulted from the migration of customers between sales channels, recently, it has become more organic. And it does not stem only from the closure of brick-and-mortar shops due to restrictions. It is driven by a natural need and the state of being convinced by the Internet as such. Also, by the search for bargains (the so-called smart shopping).

All this is what the Asian platform is targeting. If you are wondering how to sell on Shopee, take note of the giant’s tactics. Right from the start, it offers customers a one-off PLN 15 shopping voucher and additional discounts. This is a place where you can literally buy everything – from electronics to baby nappies. This is exactly what you can find on Amazon. However, the platform is currently more similar to Aliexpress.

The Polish ad for Shopee

How to sell on Shopee – how does the platform fit into the Polish market?

According to Strategy & Polska, the value of the domestic e-commerce market will increase from PLN 94 billion to PLN 187 billion by 2027. 54% of this growth will stem from three categories – fashion, electronics and health and beauty. The share of large platforms, such as Allegro, Amazon and Shopee, will rise as well – from 45% to over 55%.

This will mean greater and greater monopolisation, which is something I have been emphasising for some time now. How to sell on Shopee? The best way is not to sell, but to optimise the performance of your e-commerce shop and not to play by the rules imposed by the giants. Do not pay commission. Do not meet the strict standards enforced by these platforms. Of course, these types of companies, especially Allegro, have professionalised the market and forced the sellers using these websites to comply with higher quality standards, provide better customer service and, last but not least, maintain a professional return policy.

I have no doubt that Shopee will have to pursue this approach if it really wants to compete in Poland. And this is a good thing. However, the further monopolisation of the market leaves smaller shops dependent on the “whims” of these giants and constant increases in commission. There is also the never-ending struggle to maintain the status of a “five-star” seller. To learn more about this topic, you can read the article on alternatives to Amazon.

No shop can compare with the resources of Allegro, Amazon or Shopee. At the moment, the last company is the third most important platform in Poland. With a reach of more than 36% and almost 11 million real users, Shopee has plenty to offer. For example, the company has introduced the so-called “safe shopping guarantee”. This means that the seller receives the money only after the buyer has confirmed the receipt of the order. If the customer does not receive the goods, Shopee refunds the money.

The Gemius study – largest e-commerce platforms in Poland

This feature is a significant advantage over other platforms, let alone small e-commerce shops. The company can afford to enter a new market like Poland and gain almost 11 million users in just a few months. Its strategy lies in the patience of the investor, as the company has colossal financial resources. In Asia, it employs Jackie Chan to star in its TV commercials while in southern Europe – Christiano Ronaldo. In this context, the purchase of rights to remake the hit children’s song “Baby Shark”, on which the melody line for Shopee’s global commercials was based, appears to be child’s play.

Shopee’s history and strategy for the Polish market

Shopee is winning in Poland for several reasons – it is a new company, it has managed to attract Polish sellers, it maintains a shopping guarantee and offers bonuses for the first purchase. It has also adopted a reliable discounting strategy, which allows the platform to offer products at really low prices. By doing so, it builds up a following as, in addition to having a tremendous amount of money to spend on very aggressive advertising, news about Shopee also spreads by word of mouth.

How to sell on Shopee? You have to establish your own tactics, which I will come back to later. For now, we can find out how Shopee acquired so many resources. The company has not always been this big and spectacularly successful despite its global presence. For instance, it is a powerful force in Singapore and Southeast Asia. It has quickly failed in France and India. In contrast, it is thriving in Brazil.

Shopee’s headquarters in Singapour

How was it created? The brand is owned by Singaporean company Sea, which originally began its operations in the video game industry. The company was founded by Xiaodong Li, who changed his name to Forrest. It started under the name “Garena” and developed video games. The company generated modest results until its business model changed. The first serious money came from Free Fire – a casual multiplayer game in the ultra-popular battle royale genre. After that, everything progressed rapidly.

Garena entered the e-commerce market with USD 4 billion earned and 150 million daily active users. Shopee was founded six years after Garena, in 2015. It almost immediately became popular within the crowded market as economies of scale became effective. Plenty of money for advertising, a lot of media buzz. Today, Shopee is the largest e-commerce platform in Southeast Asia. It has 343 million visitors per month. Its competitors, Tokopedia, Lazada and Zalora, can only dream of having such popularity.

After only a few years, the giant launched more projects – Shopee Mall, which, in contrast, offers designer and expensive products, and Shopee Food, which stands in opposition to Uber Eats and provides food deliveries from pubs and restaurants. With free delivery.

If you are wondering how to sell on Shopee, you should take into account the fact that such aggressive tactics are profitable. According to the estimates (from the period before an even more aggressive campaign in which Shopee’s TV ad played a major part), the company has earned approx. PLN 30 million. Despite this, the giant still has plenty of work to do. So far, it has gained a strong following in the country and ensured that the brand is widely recognised. Now, it has to compete with veteran retailer Allegro, global powerhouse Amazon and Aliexpress, which has been operating in Poland since 2019. Aliexpress has a branch, a warehouse and even its own parcel machines in Poland. Shopee, on the other hand, has signed a strategic partnership with InPost, but is still managed from its Singapore headquarters.

The Shopee ad – Christiano Ronaldo

Shopee – what can you learn from the giant?

This time, despite the title of this text, I will not show you how to sell on Shopee. Another platform of this type on the market means cementing it and increasing the risk of monopoly. This paradoxically means fewer opportunities for growth for smaller online shops, which have to seek the chance on their own. Dependent on the rule of the game of the giants such as Allegro, Amazon, Aliexpress or Shopee, they have to fight cleverly for their income. 9% commission on Allegro is a lot? I am afraid this is only the beginning.

So what to do? Draw conclusions. You do not need to have a huge amount of money to make money. The Shopee ad is based on a clever theme. It literally drills into the ear and does not let you forget it. This is where the term “earworm” comes from. It is a track to create your own viral campaign.

The second issue is the interface. It is simple, even straightforward. One of the reasons Shopee has been successful is that it does not require any navigation skills from the user. Everything can be reached quickly and easily, and this is a huge advantage for those unconvinced by online shopping as well as for seniors. That is, the target market that Shopee has developed.

Another issue – user reviews. Shopee uses the element of recommendations to reinforce the belief that a particular product is actually good.

Next – coupons. The company often uses internal discount coupons, but also reaches out to external sources. In Poland, for example, Shopee’s fan site is the Pepper forum.

The Shopee ad – various Asian versions

Regular promotions on a day that is also the number of the month are another interesting idea. In the case of Shopee (this is their own idea), promotions take place on 5 May, 6 June, 7 July and so on. This has also worked well in Asian markets, Europe, Brazil or Mexico.

Will all the techniques described above for increasing sales work for you? No. Mainly because of the different nature of the business and the difference in scale. You need effective branding and a well-chosen marketing strategy to be successful. I would be happy to help you, because online shop development is my passion.

The market is consolidating and, in perspective, only the biggest players and those who know how to compete effectively will survive. Do not be surprised, get ready today!

O Autorze

Jarosław Ścislak

Pracowałem nad brandingiem, rebrandingiem, skalowaniem biznesu i strategiami contentowymi dla wielu firm. Tworzyłem strategie marketingowe, contentowe, budowałem od zera działy marketingu, szkoliłem juniorów. Mogę skutecznie pomóc. Poprzez tworzenie kluczowych procesów i integrację ich w jeden ekosystem sprawię, że Twoja firma będzie pracowała dla Ciebie, a nie na odwrót. Część usług które widzisz w mojej ofercie (np. rozwój sklepów e-commerce w opozycji do platform e-commerce) wprowadziłem na rynek jako pierwszy w Polsce.