1.

Introduction
The purpose of this research paper is to examine the development and growth of new venture.
Accordingly, Shopee Company was chosen for further assessment and evaluation. This paper
will examine the current challenges that the company is facing, providing further
recommendations for expansion and development. Also, it will be analyzed the growth
process of the company, followed with its market opportunities, competitive advantage and
evaluation of the factors that led the company to success. Finally, the research paper will
present complete identification of the development and justification of the challenges that the
company is currently facing.

1.1 Company Background

Shopee is a part of Sea Group, which was founded in 2015. Shopee is a leading mobile
platform in Southeast Asia and is B2C/C2C based e-commerce company. It has become on of
the fastest growing online department stores, with operations in Singapore, Indonesia,
Malaysia, Taiwan, Thailand, Philippine, Vietnam, etc. Shopee offers large section of products
which range from electronic equipment, home decoration even health and beauty products.
The platform is a region designed, in order to provide customers more convenient, fast,
simple and secure online shopping made through logistics support and user-oriented
strategies. Sea group is a [ CITATION Sho19 \l 1033 ].

1.2 Business Enterprise

As already mentioned, Shopee is one of the biggest leading e-commerce platforms in today’s
competitive online marketplace. The mobile platform had a fast growth and development
since its start of operations. The rapid progress enabled the company to take the lead in the
market and gain competitive advantage. Accordingly, Shoppe’s traffic range is constantly
increasing, so in 2017 it was documented that there were more than 80 million application
downloads on Apple Store and Google Play. Followed with 180 million products applied by
over four million entrepreneurs. Also, it was recorded that the monthly average traffic for the
desktop and mobile app is more than 1.3 million [ CITATION Sim19 \l 1033 ]. The Figure 1
visualize the total visits of mobile platforms in 2018 in Southeast Asia.
 Figure 1: Mobile Platforms Traffic

Nevertheless, in 2018 Shopee turn out to be on second place as a top e-commerce platform.
After examination of data in Malaysia, Shopee is rated as one of the most visited mobile
platforms on the regional level. So, the traffic ranking for 2018 showed that Shopee is on
second place with 12.3 million visitors, with constant increasing numbers. The mobile
platform overtakes the e-commerce market in Malaysia and other Southeast Asian countries.
Accordingly, the monthly traffic by visits in Malaysia is shown in Figure 2. Shopee holds
15% of market share in Asia of total visits [ CITATION Ale18 \l 1033 ].
 Figure 2: Monthly visit traffic for 2018

Moreover, Shopee not only shows major raise in visitor count, but also implies a significant
increase in sales. Consequently, in 2017 it was recorded that the company generates more
than 3.75 billion USD valuation [ CITATION Hua18 \l 1033 ].

Figure 3: Mobile Platforms Ranking

2.0 Competitive Advantage

Shopee is one of the leading mobile e-commerce platforms in SEA and Taiwan. Shopee has a
proper platform for customer, offering different products, its secure and fast online shopping
experience via strong support in payment method and shipment from Shopee [CITATION
Placeholder1 \l 1033 ]. What makes Shopee company different from other competitors

 Customer satisfaction : Shopee’s customers are really satisfied with service , because
Shopee provide service for customer for 24 hours per day and 7 days per week
.Shopee is the first that has a robust payment solution which involves iPay , banks
transfers and credit card .therefore , Shopee also has “ a money -back ” once a
customer purchase an order and might the product has defects ,wrong items were
delivered .lastly , Shopee provides The live chat to provide better communication
between buyers and seller .
  Promotions activities: One of the competitive advantages of Shopee which is
providing competitive price and cheaper piece compare to Lazada specially once it
comes to bags, clothes and toys epically during sale season, New Year, Chines New
Year CNY and Hari Raya. [ CITATION mys17 \l 1033 ]
 Free shipping: Shopee provides free shipping during 3-7 days with minimum order of
18rm and above. Shopee put purchased items inside cardboard with foam to avoid any
damage during shipping, also the item covered with paper from outside with Shopee
logo on it.[ CITATION Sel18 \l 1033 ]

 User friendly interface: The website and application are easy to use, customer needs
only to click to get information about the product and will be many options available
for each product.

2.1 Shopee Mall

Shopee has come up with Shopee mall, new portal which is provides many different products
from more than 180 brands such as Reckitt Benckier and Philips. Therefore, all items which
provided on the Shopee mall are real and buyers can get free shipping with no minimum
spend, also 15 days return policy once consumer purchase an order. Shopee Mall is providing
sales of up to more than 70% off and voucher codes. Shopee mall make create its service as
B2C marketplace.[ CITATION Sal17 \l 1033 ]

The developed of Shopee mall a key move for consumers in creating Shopee as an industry
leader as well as one-stop platforms which provides all customers’ requirements. [CITATION
STA18 \l 1033 ]

Lastly, Shopee Mall able to help brands to get more buyers while developing consumer
confident

2.2 Shopee Moved to C2C

Shopee heating up with consumer to consumer C2C, is an app with c2c platform which is
currently available for android devices and IOS? There are many C2C3 market places but no
one of them has a good payment or logistic solution [ CITATION Ben15 \l 1033 ].

Shopee provides organized platform for C2C sellers whom used the social media websites
such like Mudah, Facebook, to sell their own products.Shopee Malaysia became popular so
fast because there were only few online shopping websites which provided the kind of end to
end trading facilities involved, payment gateway[ CITATION Izw17 \l 1033 ] .

As with other C2C marketplace, Shopee provides a chat function between sellers and buyers
to contact, to ensure the quality of sellers posting in the platform, they are required to verify
their bank account and phone number [ CITATION Ben15 \l 1033 ]

Shopee is trying to be different from its competitors .so Shopee came up with its own secure
payment solution known as “Shopee Gurantee” once transaction happens, the consumer’s
funds go to a separate bank account that held by Shopee [CITATION Mic15 \l 1033 ]

2.3 Shopee partnership

 Shopee is online c2c platform which achieve to empower entrepreneurs equally

businesses and individuals, to sell and purchase safely and securely on mobile.
Shopee Malaysia partnerships with POS Malaysia, to give a chance into new business
opportunity specifically in e- commerce sector.[ CITATION adv16 \l 1033 ]

 Shopee partnership with Facebook to help leading retail brands support their e-
commerce presence, both are working together to share benefits of industry practices,
how brands/ shops adopt certain tools, for example Facebook advertising to make
their online visibility increase.[ CITATION man17 \l 1033 ]
2.4 Segmentation, Targeting and Positioning (STP)

2.4.1 Segmentation
Shopee opens new segmentation to the consumers, consumer while shopping at Shopee can
find materials and grocery. Shopee focuses in low price strategy to take a place in the market.
for seller Shopee, needs to attract suppliers and choose the right suppliers to guarantee the
supply quality things are well-defined

2.4.2 Targeting
by using MASAD analysis

2.4.2.1 Measurable
Segmentation of consumers

each day Shopee grocery collects round 10 orders, the numbers of visitors around 400people, so 30%
of consumers will return and around 30% new consumers each month. Shopee is targeting more than
3.5 million suppliers of simple Shopee’s items

2.4.2.2 Accessible
Shopee has high growth average and still improving so the total of target for dissimilar industry are
achievable

2.4.2.3 Substantial
this stage will make Shopee earn (1 million USD) value in 2020. which is really huge amount of profit
compare to 2017.
2.4.2.4 Actionable
according to the market there are many competitors, people offering online shopping service, or might
be known as grocery shopping, all competitors will post information and prices of the items on their
own websites.

2.4.3 Position

3.0 Key Success Factors of Shopee

As already mentioned, Shopee is the fastest growing and leading e-commerce company in
Asia. Shopee succeeded impressive rapid growth in just few years, that overtook among
competitors as the top mobile shopping application. Also, Shopee achieved to be a leader in
terms of web traffic and rating as the best application among Google Play and iOS App Store
[ CITATION Sim19 \l 1033 ].
The company managed to accomplish fast growth and success for the reason of several key
aspects. Initially, the company was niche in the market, implementing new aspects in the e-
commerce marketplace. That was followed by many innovative features and strategies that
brought huge success to Shopee. Nevertheless, the main vision of the company was to create
more holistic and safer e-commerce experience for customers. The main success of the
company is based on the inadequacy and weaknesses of the competitors. Accordingly,
analysis was made of all the shortcomings from the competitors and afterwards unique
platform was created that covers everything[ CITATION The15 \l 1033 ].

Shopee company started with immediate success as a niche in the market place,
differentiating from other e-commerce companies. The vison of the company is to have low
barriers of entry for both buyers and sellers, built in payments, mainly free delivery, chat
system, logistics and transaction management system. Accordingly, the company started with
customer to customer (C2C) business model. The main vision of this platform is to connect
independent buyers and sellers on one place to incorporate and communicate simply.
Moreover, Shopee success is mainly based that is not a typical e-commerce platform, it’s a
niche m-commerce which indicates consumers purchase through their mobile devices.
Consequently, when Shopee started its operations, the m-commerce was already established
and mature market. So, the company determined as a mobile commerce since mobiles are
more used nowadays than computers. This way the usage of the application is more
convenient for both sellers and buyers. Moreover, Shopee does not have charges for
advertising, transactions and product listing. This niche made the company growth and
expansion very fast across seven markets in the first years of operations, Shopee expanded in
Singapore, Malaysia, Indonesia, Thailand, Vietnam, Philippines and Taiwan [ CITATION
Sri17 \l 1033 ].

The e-commerce platform developed and grew with the success of customer to customer
(C2C) business concept. Initially, Shopee decided to change its operations and strive for
bigger success by implementing the business to customer concept (B2C). The new business
model will allow Shopee to strengthen and expand market segments and include many big
and international brands. Customers can experience more convenient shopping, which will be
offering quality and authenticity of products coming from worldwide leading brands.
Accordingly, with implementation of B2C model, the company will establish leadership as a
platform that can cover all the customer needs [ CITATION Aus18 \l 1033 ].

Furthermore, Shopee introduced a whole new idea and direction that is different from the
competitors and the typical e-commerce platforms. The company developed an entire new
approach of shopping, combining social networking features such as: hashtags purchase,
store tracking, friends and optimization of direct interaction. The hashtag feature allows users
to easily follow the latest trends and sales. Also, it enables synchronization with your
Instagram account, so it allows to track the popular hashtags and purchase accordingly. The
application also has another innovative feature that is called “walk” which allows users to
follows their favorite sellers and keep up with the latest updates and suggestions. From the
seller’s perspective, the application allows them to boost their features and sales by
positioning their posts more prominently and accordingly to the buyer’s searches [ CITATION
Man18 \l 1033 ].

Additionally, another implemented social networking feature is the chat feedback. The
platform chat room provides freedom to buyers and sellers to communicate easily. Shopee
was also inspired to implement this feature according to Asian culture style selling, which
buyers and sellers exchange information directly, evaluating credibility, consult and bargain.
Accordingly, the platform allows to achieve this interaction and built relation between the
buyers and sellers. This whole concept creates confidence when it comes to online purchase.
This allows customers to have a completely different e-commerce experience than other
platforms. The chat allows customers to directly communicate with sellers for further
information like additional pictures and provides space where they can negotiate for price and
promotions for bulk purchasing. All of these features provide highly social, friendly and safe
environment for customers[ CITATION Teg15 \l 1033 ].

Another factor that brought huge success for Shopee is the seasonal promotional events that
boosted market growth. The company makes immense sales and promotions during some
periods of the year. The promotions are sometimes even up to 90% discount. Therefore, the
biggest success with sales Shopee achieved, was on 11.11 event. The company generated 11
million orders during those 24 hours. It was recorded that around 58.000 orders were sold in
just one minute. These m-commerce strategies were implemented several times and
concluded to be huge key success factor for the company [ CITATION The18 \l 1033 ].

4.0 Challenges That Shopee Need to Overcome

Legality aspect and transparency of Shopee are done well by the company. For example,
when today comes a new product, where people are getting crazy about the use of new and
branded products. However, over time people may be tired of using baruk products. They
will assume to not use the merchandise, just use a low-cost product and clear its existence
however the standard remains sensible. Their mindset needs to be modified. Their lifestyle
and personality will conjointly modification. So this Shopee company should be ready to face
the challenges that positively return up within the future to return [ CITATION Rie18 \l 1033 ].
The Shopee company must be ready to perform varied ways in which to be ready to maintain
existence and supply new breakthrough options.

Trust hold the most crucial part in online transaction because it is influenced the

patron assessment toward the online retail such as Shopee. Lack of trust prevented consumers
from partaking in on-line group action so create trust crucial in e-commerce[ CITATION Rie18 \l
1033 ]. Trust has influenced consumer purchase intention toward Shopee considerably shows
that the customers are willing to simply accept the weakness of the online transaction as a
result of they have already got the positive expectation relating to the online retail behavior.
Also, this might result in the satisfaction of the customers and expected outcomes[ CITATION
Rie18 \l 1033 ].

4.1 Price sensitive customers challenge:

although middle incomes in Asia are growing and consequently the average group is
growing, the per capita income of most customers in rising markets of Asia remains less than
a 10th of those developed countries such as u. s. and Singapore. The mentality of “every
penny counts” and Low incomes make Asians among the top worth sensitive customers
worldwide[ CITATION Sun15 \l 1033 ]. This mindset has been compounded by e-commerce
provides price sensitive buyers the ease of having the ability to match costs online [ CITATION
Sun15 \l 1033 ].

Other challenges faced by online retail growth in Asia embrace customer concerns regarding
whether orders can make it on time, the circumstance of the goods on arrival and the security
of funds transfers throughout the proceedings [ CITATION Rie18 \l 1033 ]. Features like this hope
a lot of for the future to be bettered. To win consumer confidence in Asia. Shopee cash back
guarantee and the choice to pay on delivery, the existence of warranty and alternative cards.
Or else of managing online transactions have helped provide ease and certainty for online
shoppers for the first time[ CITATION Rie18 \l 1033 ].

As more people come online, the challenge is for eCommerce startups to continue innovating,
as well as tap into more niche segments [ CITATION Hus15 \l 1033 ]. At the end of the day, if
consumers are satisfied and happy with their online transaction, it’s safe to say that they’ll
continue to shop in that app. That will aid with retention and greatly lower user acquisition
costs – one of the primary factors driving marketing spend[ CITATION Hus15 \l 1033 ].
4.2 Strategic Challenges
Shopee faced two main challenges. furthermore, in conceptualizing its overall strategy, the
first challenge was hanging the proper correspondence between offline and online selling
methods to speak with customers and users. This balance could only be attained through a
deep discernment of the customers’ desires and preferences in all market like conducting
deep studies into the customer’s online shopping behavior, preferences.

4.3 Shopee Competitors

In Southeast Asia, direct competitors of Shopee are Carousell (Singapore) and Tokopedia
(Indonesia), in Vietnam there are at least 4 challengers in the same section. It can be
mentioned as 5giay.vn, chotot.com, Sendo.vn (FPT) and more recently Zalo (VNG). In
particular, Sendo.vn and Zalo (Zalo Shop) are the two most active way Shopee [ CITATION
Sho16 \l 1033 ].

Although Carousell remains the predominant leader in the mobile marketplace scene in
Singapore, it faces strong competition from other mobile C2C marketplace, corporations such
as Gumtree Singapore and Shopee that are capable to distinguish themselves from carousel
by giving distinctive options and services [ CITATION Hus15 \l 1033 ]. While the rising
importance of the mobile commerce market would mean that additional mobile-focused
marketplace, corporations are expected to in the within the competition, consumers should
rejoice as there will soon be additional choices and variability for them once selecting a fluid
market[ CITATION Sho16 \l 1033 ]

5.0 Recommendation
As per the challenges discussed earlier in this research, in order for Shopee to sustain its
competitive advantage through a various cultural and social landscape as well as to overcome
challenges mentioned, Shopee need to continue hyper localizing its content across the
relevant channels in all the region. Shopee are aware of that no strategy which will be
systematically applicable, and will have to be sure of on using distinctive strategies and
techniques to form it each as an item and a brand stand out from its peers [ CITATION Eco18 \l
1033 ].

Shopee will have to be obliged as well to be adaptable, engaging a smart assortment of

offline and online advertising channels to maximize consumer touch points. The efforts are
spread to its local entrepreneurs and sellers with Shopee college , with chances for them to
become better marketers and retailers[ CITATION Eco18 \l 1033 ]. Shopee mall should carry on
securing additional brands and prove itself as a noticeable location for established brands to
be set up online in Shopee. 

Online retailers such as Shopee should maintain their product so the customers purchase
intention toward them will be enhanced due to the perceived cost of the customer additionally
increase[ CITATION Eco18 \l 1033 ]. Every company particularly online shop should build a lot
of trust toward the customer primarily based on the flexibility, benevolence and integrity of
the company to sustain their customer intent to buy.

6.0 Lessons Learned

There are several factors and considerations that business leaders need to take into notice
when contemplating business in Asia. Nowadays, businesses are joining the digital revolution
in order to gain competitiveness, flexibility and integration. The Asian market is open to new
technologies, mobile initiatives and willingness for new innovations. Asian market and
consumer are technology based and digital oriented. Accordingly, these markets are unique
business ecosystems, which exploit many opportunities, they are open for new technologies
and mobile platforms. For instance, there are many leading Asian companies in the e-
commerce market. Accordingly, business leaders or policy makers that are interested in the
Asian market and consumers should take into consideration some key contemplations. In
order to be involved and succeed in the marketplace, business leaders need to possess
competitive advantage, flexibility, integration and insightfulness. The key to successful
leadership and business making is to understand infusing digital processes and harnessing
data. Another important implication for business leaders is the necessity to be more
competitive and customer oriented. Finally, to survive in today’s competitive digital era,
leaders needs to seize digital initiatives for creation of unique business operations and
customer satisfaction. With today’s technological advances, leaders need to be focused for
company’s growth and gaining competitive advantage through innovation and uniqueness
[ CITATION Hao15 \l 1033 ].

7.0 Conclusion

Shopee is one of the successful e- commence company in southeast Asia. Shopee should take
on consideration to improve the e-commerce world by giving a stage to interface purchases
and merchants in a single network. Due to the high competitive market in terms of electronic
commerce, the company will need to concentrate on uniqueness as well as low-price strategy
in order to maintain in good position in market. Going global further than South East Asia
could be a critical challenge for Shopee due to the environmental factors such as logistics as
well as language barriers since it is online platform based. To conclude that, sustaining in the
top of e-commerce companies in Asia would be a difficult objective for the company because
of the development of technologies that happens fast nowadays.