Off the Record: Behind Shopee’s Doors
How you can use Shopee’s strategies and tactics to empower your organisation and career.
Event Sneak Peak
Building on the success of Momentum Works “Who is Shopee” report, Momentum Academy hosted an exclusive event on “Off the Record: Behind Shopee’s Doors.” The event saw over 400 registrations and received a lot of great questions and feedback.
In this recap, we share a selection of Momentum Academy’s insights on Shopee’s strategy and growth logic. For the full insights, reach out to Momentum Academy at [email protected].
1. Company logic & leadership strategy
In our perspective, Shopee (and Sea Group) have a clear strategy that they have been relentlessly executing. The 3 major strategies we identified were:
- Building strong core of scale: using free shipping to spin the flywheel
- Leveraging on last mover advantage
- Copy of proven models and tactics from China
2. Free shipping – “How long can they burn? It’s not sustainable.”
Many people have spoken critically about Shopee’s free shipping strategy and how it’s not sustainable. Maybe it’s not meant to be.
But free shipping allows the company to drive scale and customer experience, which in turn drives value across the flywheel from merchants to end customers. The flywheel model, which we adapted from Amazon, shows how Shopee is spinning their flywheel.
More importantly, the growth allows them to offer more services (digital financial services, on-demand logistics, etc.) to bring in even more customers and retain existing ones.
3. Late mover advantage, is there such a thing?
The chart above shows that Shopee has not been the first player in many areas they have explored, at least not quite yet.
We think this strategy is deliberate. They wait for existing players to educate the market and come in to reap the benefit when the market is ripe.
They seem to be doing the same thing for Shopee Fresh, Xpress and the other areas they are expanding into.
4. Copying is a virtue
In Southeast Asia, it has been established that you can reference business models from China – every large tech player is doing that.
However, what exactly do you copy? In a market where things are substantially different from China, you will need to adapt and manage the local team effectively. So while copying is a good strategy, blindly doing so can cost a company.
5. People and culture
We also explored people and culture, a huge topic in tech companies today. Shopee has often been scrutinized in this aspect.
While high turnover tells a part of the story, we think it is important to assess it from a company logic perspective.
- For a high growth company, how should we look at turnover – the first fundamental question we need to ask, is high turnover a bad thing?
- Bear in mind, we all tell ourselves we need to be agile and iterate – and for a company growing at a high speed, does the same apply to people?
- We always need to look at turnover in a granular way – what exactly is causing high turnover? Where is it happening – in the warehouse, tech department or is it the business heads? These mean very different things to the organisation.
High turnover can be a form of iteration or also a sign of doom. Shopee is being tested right now.
History gives us a lot of lessons, and we took a look into Alibaba’s people strategies and how they built a world-class team.
If you would like to bring these insights and strategies back to your team, reach out to Momentum Academy at [email protected].