How Shopee’s closed ecosystem operates in Vietnam

DNHN - To cope with fierce competition from e-commerce platforms, Shopee has not only increased its online sales activities but also sought to enhance the experience to attract customers.

Shopee’s ecosystem is gradually being completed with the addition of digital finance. Photo: Vinalink
Shopee’s ecosystem is gradually being completed with the addition of digital finance. Photo: Vinalink.

According to the newly released F&B market report, ShopeeFood is currently the most popular online food delivery channel in Vietnam, accounting for 42.94% of businesses using it. On the consumer side, nearly 50% of respondents said they would choose ShopeeFood to order food if all other platforms did not have any promotions.

The report also states that ShopeeFood provides 41% of total revenue for food businesses. ShopeeFood is currently operating in 22 localities nationwide. The platform was officially launched in 2021 after SEA - Shopee’s parent company based in Singapore acquired Vietnam’s food delivery app Now.

In addition to ShopeeFood, SEA also operates the e-wallet ShopeePay in Vietnam. Currently, all payment transactions on Shopee and ShopeeFood are made through ShopeePay, creating a closed ecosystem for SEA in Vietnam.

Illustration
Illustration.

In addition, SEA has launched a buy-now-pay-later service called ShopeePayLater and a lending service called SEasy. For users, ShopeePayLater provides a spending limit in advance and repayment later, while SEasy helps sellers ensure a seamless cash flow and expand their business on the platform. This strategy has helped Shopee become a major growth driver for SEA, surpassing the traditional revenue-generating segment of gaming. Shopee’s revenue contribution to the SEA Group has increased from 38% in 2019 to 69% in 2023.

Currently, Shopee is facing fierce competition from TikTok Shop, especially after TikTok Shop invested US$1.5 billion to acquire Tokopedia in Indonesia. To cope with this issue, Shopee is focusing on increasing its livestream sales activities and improving the shopping experience. A typical example is allowing customers to return products after 15 days and free shipping, a new policy that has been applied since the beginning of March in Vietnam.

H.C

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