Shopee is on track to eclipse Alibaba’s international e-commerce business by 2022 – Health Guild News


Shopee’s parent company, Sea Ltd, released its quarterly results, maintaining the three-digit growth rate, with its revenue at more than 160% year-on-year.

Meanwhile, its main competitor, the Chinese giant Alibaba, reported earlier this month a strong but considerably lower growth of 54% for its combined international companies (Aliexpress, Lazada, Trendyol and Daraz).

These four companies generated revenues of about $ 1.6 billion during the quarter ended June 30, compared to Shopee’s $ 1.2 billion for its Southeast Asian operations alone.

Alibaba does not provide any specific breakdown by business, but given the global reach of Aliexpress, it should mean that Lazada is already badly following Shopee in the region and the gap keeps growing all the time as Singapore’s centricorn has managed to grow its e-commerce. business almost seven times since 2019.

However, even more remarkable is the fact that, at the current rate, Shopee will not only leave Lazada in the dust at SEA, but will overshadow Alibaba’s entire international e-commerce business, even though it operates in a single region. And that could happen as soon as the first or second quarter of 2022.

Financial results of Sea vs Alibaba

Evolution of Q2 results, year after year / Source: Sea Ltd. and Alibaba

Sea’s guidelines for full-year results are estimated at $ 4.7 billion to $ 4.9 billion in revenue in 2021, which would already surpass Alibaba’s international results during the 2020 calendar year.

This gives more credibility to the allegation that Jack Ma’s idea seriously fails outside of China, struggling to get a stronger foothold abroad.

At first glance, more than 50% of year-on-year revenue growth seems respectable, but it not only pales in comparison to its competitors, but only accounts for five percent of the Chinese giant’s annual revenue.

That said, Alibaba is still a leading company in China. Despite years of foreign investment and a popular, nonconformist founder who gave him global publicity, he has still failed to break markets outside his homeland.

Meanwhile, Sea continues to rise during the pandemic, in part because of the strong performance of e-commerce and in part because of an equally solid digital entertainment business that has also benefited from the blockages that keep millions trapped at home.

In total, the company is about to exceed the revenue limit of 10 billion US dollars this year and its shares continue to break records, as it has multiplied by ten since 2019 and has placed the current market capitalization around US $ 170 billion, making it Singapore’s most valuable company.

Chasing Amazon?

Faced with this success, the question is no longer whether Shopee can compete with regional rivals, but whether he can replicate his success elsewhere abroad.

So far, Amazon is really the only truly international e-commerce company. No other technology company has managed to transcend borders in the same way it has, but there must surely be room for a significant competitor to eventually grow.

So far, Chinese rivals have failed to make a dent, despite the proximity to a large, cheap manufacturing base. Other e-commerce clones have taken root in individual countries or regions, but struggle to venture what they know best.

Shopee’s ease in fighting much older, wealthier businesses suggests he may be successful elsewhere as well.

The test of his international ambitions will be his performance in Latin America, where he has already launched in Brazil, Chile, Colombia and Mexico.

Shopee continues to grow in Brazil with nearly 50 million visitors in June 2021, but is still behind the Mercado Livre with 250 million / Image Credit: Similarweb

This year’s annual revenue of $ 10 billion will place it in the top 20 largest internet companies in the world.

But since Amazon is about to surpass US $ 400 billion, it looks like the pie is big enough to keep the Singapore setting growing if it can attract foreign audiences. It looks like the best is yet to come.

Featured Image Credit: Reuters

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