C2C marketplace Shopee officially launches in Singapore
By Benjamin Cher November 24, 2015
- App-only platform had soft launches in other SEA countries
- Focused on social interaction, with trending searches and categories
WHILE the South-East Asian e-commerce space already sees major players like Lazada and Rakuten duking it out, the battle is heating up within the consumer-to-consumer (C2C) space too, with the official launch of Garena-backed Shopee in Singapore.
Shopee, which competes against the likes of Carousell and Gumtree, is an app-only C2C platform that is currently available for iOS and Android devices.
It had soft launches in Indonesia, Malaysia, the Philippines, Taiwan, Thailand, Vietnam, and also Singapore back in June.
“While there are other C2C marketplaces out there in the region, none of them have a good payment or logistics solutions,” claimed Chris Feng (pic above), head of the South-East Asia and Taiwan mobile business at Garena, as well as Shopee chief executive officer.
“A fairly large part of the market is not fulfilled – there is no payment or logistics support for buyers and sellers,” he told a media briefing at the official launch in Singapore recently.
The Singapore-headquartered Garena is a regional online and mobile platform provider.
Shopee is partnering Singaporean-based logistics startup Ninja Van to provide integrated logistics solutions for sellers to deliver their products.
Shopee will collect and deliver the product on behalf of the seller, to the buyer via Ninja Van. Buyers can also opt to pick up at the seller’s shop as well.
Shopee is looking to solve problems on both sides of the equation, after hearing buyer and seller woes, according to Feng.
“What we hear from the market is, how do I get a more secure and better payment solution? How do I make sure what I get is what I wanted?
“At the same time, we are also looking at support tools for sellers who need to manage the entire last-mile supply chain, from management tools to logistics solutions,” he added.
The startup is looking to reduce the barriers to entry, with its Power Seller tool being able to help a seller open a ‘shop’ in 30 seconds, according to Feng.
“You can just take a picture and put a name and price on it, and it’s good to go,” he quipped.
On the payment front, Shopee is introducing an escrow service for payments – similar to what Alipay has been doing for Taobao and Tmall for years.
“Essentially, we keep the money until the buyer is happy, and if there is a dispute, the buyer will settle with the seller,” Feng said.
“The seller is incentivised to keep the buyer happy to get better ratings – if things get serious, we will come in and mediate the dispute,” he added.
Beyond just having integrated payment and logistics solutions, Shopee is also focused on the ‘social aspect’ of shopping.
“We enable sharing of items among friends, creating a home feed of what your friends and favourite shops are buying and selling,” Feng said.
“We also enable sharing of hashtag searches for items, as well as trending hashtags for buyers and sellers to see what the popular trends are, in real-time,” he added.
As with other C2C marketplaces, Shopee also has a chat function for buyers and sellers to interact.
In ensuring the quality of sellers listing on the platform, the startup requires them to verify their phone numbers and bank account.
“We also have a special team to look through suspicious and fake items, which are filtered out by both user reports and our own filters,” Feng said.
“Sellers who do not meet our standards or comply with our regulations will be removed from the listings,” he added.
These differentiators have paid off, with the platform currently listing three million items, four million installs, and claims the top 3 spot in the countries it has done a soft launch, Feng claimed.
Revenue model, funding
Shopee will not be charging any listing fees or taking a commission from sales.
“In China, if you look at how TaoBao makes money, it’s in search placement fees,” said Feng.
“For us, it’s a combination of the eBay and Taobao model, but more like Taobao in charging for search placement and advertising,” he added.
Garena, as the holding company for Shopee, has been providing the necessary funding to date, according to Feng.
This has allowed Shopee to do more than the usual startup, from having soft launches in multiple countries to even hiring one of the world’s biggest public relations firms.
“We’re still funded by Garena and not thinking about getting external funding yet,” he said.
Besides the funding, Shopee also gets the benefit of Garena’s expertise, especially on the payment front, he added.
The dual role he plays in Garena and Shopee is complementary and is not an issue, said Feng.
“It’s interconnected because it’s all in the mobile business,” he said. “A lot of experience can be shared.”
When asked whether this was Garena’s way of diversifying its business, Feng was coy.
“Garena is an Internet business and we are always looking at new and better ways to serve customers,” he said.
“This is just one example and not the only one,” he added.
Garena, while mostly known as a publisher of free-to-play games with micro-transactions, has a venture capital arm, as well as a video production arm which runs its non-gaming related YouTube channel.
Over the next six to 12 months, Shopee will be working to grow its ecosystem and making improvements to its app.
“We also want to make the best user experience as possible, while offering more payment or logistics options to buyers,” said Feng.
In terms of markets, it will not be looking outside of South-East Asia for the moment, he added, preferring to focus on the region.
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