With services like Carousell, Tokopedia, and more, you’d think the peer-to-peer (P2P) marketplace space, where consumers sell to fellow consumers, is all but conquered in Southeast Asia. Not to mention the possibility of Facebook steamrolling over the whole thing like a particularly enthusiastic tropical storm coming in from the west.
Shopee doesn’t think so. The Singapore-based startup has officially launched its mobile-first online marketplace, where people can buy and sell stuff just using their smartphone. The service did a “soft” launch a few months ago in several Southeast Asian markets, specifically Singapore, Malaysia, Indonesia, Thailand, Vietnam, the Philippines, and Taiwan. Shopee is part of Singapore-founded internet and social platform Garena’s ecosystem of apps.
This allows Shopee to set itself apart in this competitive market by addressing what it sees as its competitors’ shortcomings one by one. For example, it provides its own secure payment solution, called “Shopee Guarantee.” When a transaction takes place, the buyer’s funds go into a separate bank account held by Shopee, and they are released to the seller only when safe delivery has been confirmed.
Part of what enables this feature is Shopee’s partnership with Singaporean ecommerce logistics startup NinjaVan for item pickup and delivery in the city-state. In other P2P marketplaces, buyers and sellers have to set up meetings or arrange for shipping and delivery themselves. Here this can be taken care of end-to-end, if the users so choose. The company says it will work with local ecommerce logistics providers to offer that service wherever it’s available.
Another significant addition to the service is a heavy social element. P2P marketplaces do foster communities around them eventually, so Shopee provides the tools for one from the get go. The app provides a Facebook-like news feed, allows users to “follow” one another and get updates on their favorite sellers, and offers the ability to use social media systems like hashtags to facilitate product search and sharing. Features like recommendations, trending sellers and products, and sharing options to other social media round up the service.
The app provides tools for sellers to create their shop, upload item listings and images, and manage their inventory. A “seller assistant” function provides advice and tips to sellers on running their shop. There is also a live chat function for buyers to get in direct contact with merchants.
It feels like Shopee is attacking the problem on every front it can think of, which Chris Feng, Shopee CEO and head of mobile business for Southeast Asia and Taiwan for Garena, confirms. “[It’s about] whether we can serve the buyer better, on services that they are already familiar with,” he tells Tech in Asia. “We are lucky because many users are currently unhappy with existing [P2P marketplace] solutions.”
Tailored to Southeast Asia
It’s an approach that seems to work. The company claims it has three million listings on Shopee and “several million users across the region.” And according to mobile app tracking service App Annie, Shopee’s app has been following or matching Carousell’s in popularity and usage (in Singapore and Taiwan, respectively), and in other markets like Malaysia, Philippines, Indonesia, and Thailand, even surpassing it.
Chris says Shopee and the concept of P2P marketplaces in general is a good fit for the region. In the US, he explains, a business-to-consumer (B2C) model is more prevalent in ecommerce – the market is dominated by industry leader Amazon and other major retailers follow suit. Asia seems much more responsive to the consumer-to-consumer (C2C) model popularized by eshops like China’s Taobao.
Another big incentive for sellers to join the new app is the fact that Shopee doesn’t charge any listing fees or commission at the moment. Chris says the service will most likely make money through advertising, following Taobao’s model.
It’s not unheard of for online services to eschew fees in the early days in order to get more users on board – arguably the lifeblood of every such platform. Whether Shopee is able to keep that up and monetize effectively using advertising is another matter. It’s conceivable that its presence in multiple markets and Garena’s support are likely to keep it going for a while before it has to worry about that.
The shadow of Facebook
But what about the coming storm that could threaten all P2P marketplaces alike in the region? Facebook’s planned Local Market – a proposed consumer-to-consumer ecommerce site within the social network – still looms on the horizon, although there’s nothing to suggest at the moment it won’t just fizzle out harmlessly over the Pacific.
Much like Carousell itself, Chris isn’t too worried about that for now. He feels it’s important for a business to focus on what it does well rather than trying to ride too many horses at once.
“People see [Facebook] as a social space, not a trading space,” he says. He’s not altogether wrong, even though Facebook’s groups have been used as P2P trading hubs for a while now. But they provide none of the features that Shopee provides, Chris claims, such as an effective payment system, delivery, and so on.
“Facebook has social experience, we have selling experience,” he says. That’s why, he explains, it wouldn’t be unthinkable for Shopee to work with Facebook if the social giant ever wants to try its hand in P2P ecommerce in the region. “I welcome Facebook,” he says. “We’re happy to […] advance the business [this way].”
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