Shopee: the late bird that gets the worm?

The Checkout is Tech in Asia’s free newsletter that breaks down the biggest stories and trends in ecommerce. [Read from your browser]( The Checkout Welcome to The Checkout! Delivered every Thursday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in ecommerce. If you’re not a subscriber, get access by [registering here](. Hello {NAME} , Even after getting hooked on Netflix’s Minimalism: A Documentary about the Important Things, I still ended up ordering about 12 times from Shopee this past month amid a lockdown in Vietnam. I know impulsive buying isn't good for your health and purse, but I can’t help it. In Vietnam, office workers often joke that they meet couriers delivering Shopee orders more than their family members and friends. That, however, speaks volumes about the popularity and scale of Shopee, which was a latecomer to Southeast Asia’s ecommerce game and is now on top of it. So it makes sense that Shopee is now on a quest to bring its model of free shipping and no commission fees to conquer new markets across the world. As usual, parent firm Sea Group remains quiet about Shopee's position in Brazil and recent reports about its recruitment of sellers in Poland and India. Despite only entering Brazil less than two years ago, Shopee now has the second-highest number of active users in the country, trailing after Argentina-based ecommerce player Mercado Libre. Will Shopee easily win over Poland and India as well? Not so fast. In India, Shopee has Amazon, Flipkart, and a host of social commerce firms like Meesho to deal with. In Poland, Shopee will face a well-financed Allegro, which is still riding high on its public listing. In this week's big story, Tian Wen dives deeper into Shopee’s global gameplan. -- Huong THE BIG STORY  [How Shopee can succeed in Poland, India]( Image credit: Timmy Loen Shopee is stepping into familiar territory in both countries, but its playbook may not have all the answers for success. DEEP READ 1️⃣ [Christmas at risk as supply chain “disaster” only gets worse]( Inventories are at an all-time-low. That means Santa Claus might not have enough presents to deliver this year - at least in the US - even though [Black Friday shopping]( kicked off early. According to Bloomberg, US retailers are facing unprecedented struggles due to disruptions in the global supply chain. The pandemic has caused manufacturing hubs like Vietnam to close for months, causing [potential delays]( in the shipment of iPhone 13 units and [Nike shoes](. (Aren’t they just must-have Christmas gifts?) TRENDING NEWS Check out Tech in Asia’s coverage of Asia’s ecommerce scene [here](.  1️⃣ [Jeff Bezos, Tencent back US$87m round of Indonesian B2B ecommerce startup Ula]( Ula's founding team (from left): Riky Tenggara, Derry Sakti, Nipun Mehra, and Alan Wong / Photo credit: Ula The richest person in the world is finally getting serious about Southeast Asia. Through his family office, Bezos Expeditions, Jeff Bezos joined other high-profile investors such as Tencent, B Capital Group, Sequoia Capital India, and Northstar Group in a US$87 million round of Ula, an Indonesian business-to-business ecommerce startup. Why it matters: Ula has raised US$117.5 million in less than two years. Launched in January 2020, the startup, which digitalizes warungs, has a star-studded lineup of competitors like Warung Pintar, GudangAda, BukuWarung, Mitra Bukulapak, and GoTo Group. It’s estimated that warungs account [for 97% of Indonesia’s domestic employment](. The massive market opportunity has led to a race to modernize millions of these stores across the archipelago, from connecting them with suppliers to providing loans. Ula is Bezos’ first investment in Southeast Asia. It’s unclear whether this would potentially lead to Amazon itself being more serious about Southeast Asia. The region has added [70 million]( online shoppers since the start of the Covid-19 pandemic. Within the region, Amazon is currently only available in Singapore and has various failed attempts to expand to other Southeast Asian countries, including previous [talks]( with Gojek. In recent years, the US tech giant seems to be more interested in tapping the region’s vendors (rather than buyers) who want to sell internationally through its [Amazon Global Selling]( program. And Ula’s investment can add more momentum in that direction. 2️⃣ [GoTo Group to up its stake in Indonesian supermarket operator]( Photo credit: Hypermart GoTo Group, the merged entity of Gojek and Tokopedia, is strengthening its offline presence. It will join in the capital raise of Matahari Putra Prima, which operates more than 200 supermarket outlets in Indonesia. Why it matters: The online-to-offline race in groceries seems to be heating up in Indonesia. Another publicly listed supermarket operator, Supra Boga Lestari, was [acquired by Blibli]( an ecommerce player backed by local conglomerate Djarum Group. This echoes Alibaba’s [control]( of Chinese supermarket giant Sun Art, and its participation in a [US$400 million investment]( in Vietnam’s Masan Group, which operates supermarket chain Vinmart. The pandemic has elevated groceries into perhaps the hottest ecommerce vertical. Southeast Asia’s online grocery space (we mapped out the key players [here]( is still wide open as most players grapple with low margins and remain unprofitable. Those who can find the right offline partners might end up with the winning formula. 3️⃣ [The end of China’s fast-growing group buying?]( Photo credit: Nice Tuan Community group-buying in China might have hit the ceiling. Most of the big techs that offer the service have to scale back because the cash-burning model is seemingly unsustainable, according to Pandaily. These include Chengxin Youxuan (by Didi), Nice Tuan (by Alibaba) and Jingxi Pinpin (by JD.com). Why it matters: The pandemic accelerated the community group-buying model, putting players in a cash-burning war. Consumers were heavily subsidized, especially those who live in lower-tier Chinese cities. But the model can’t last forever, and more headaches might arise from additional [regulatory restrictions]( on group buying. This is a warning sign for startups in Southeast Asia that are betting on the same model. For more insights, you can check out Tech in Asia’s previous analysis on the community group-buying race in Indonesia [here](. STARTUP WATCH 1️⃣ Thrasio [inches closer]( to official India entrance The US-based leader in the ecommerce roll-up model will reportedly pay between US$30 million and US$50 million for its first acquisition in India, according to The Economic Times. The target is [Lifelong Online]( which sells consumer durables in segments like kitchen, grooming, fitness, and home appliances.  2️⃣ [Udaan]( in talks to raise US$537 million for expansion The India-based B2B unicorn will [reportedly]( close its latest funding round worth 40 billion rupees (US$536.5 million) within the next few weeks, according to Livemint. This would potentially put Udaan’s valuation in the range of US$4.5 billion to US$5 billion.  3️⃣ Philippine parenting ecommerce firm [Edamama]( raises debt financing from Innoven Capital This is Innoven Capital’s [first investment]( in the Philippines. Edamama provides a digital gift registry, baby product subscription services, and online classes for children and parents. That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to our preference center at the bottom of this email. In the meantime, if you have any feedback or ideas, feel free to get in touch with Terence, our editor-in-chief, at terence@techinasia.com. See you next week! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? 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