Executive Summary

Shopee intends to tap into the emerging social commerce market in Vietnam, serving larger consumer pools with high
Situation demand for convenient shopping solution & social interaction collaboration

Shopee faces low-efficiency cost issues & seeks for

highly competitive advantages model comparing to
competitors
Disruptive social
Leverage current
Challenges business model
commerce business
models development
Shopee's ecommerce platform is now performing
impressively but is threatened stagnancy

Short-term Long-term

Questions What are the potential opportunities & challenges for Shopee VN relating to social
commerce trends in VN? How can Shopee fit into this market?

Business model of innovation 

Strategic 
Approach Ultimate cost efficiency method
Yielding users (buyers & sellers) through socialization  
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Executive Summary  Market Dynamics Opportunities Challenges Business Model Recommendation
Social commerce – the next generation of Commerce is a promising market for
Shopee
Vietnam Social Commerce Market is estimated to … by both growth in Orders & Gross Merchandise
grow 9 times bigger in 2027 Value (GMV)
2027E
101%
Global
2020 $2600B

$475B
+30% APAC
$300B CAGR $1500B

28%
$10B
Vietnam

$90B Order GMV

Source: Research and Markets; Bain & Company; iKala
~65% of it is Social Commerce

The exponential growth of Online New consumers

2nd 1
Largest Fastest growing
VN's Social Commerce is E-commerce st E-commerce 71M  shoppers in 41% to Internet
supported by: market in SEA market in 2026 2025 economy services
   
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Executive Summary  Market Dynamics Opportunities Challenges Recommendation
Diverse preference in buying behaviors, categories & the growth of live-sales appear as the source of potential
for Shopee to join the market  
Women (25-34 years old)- the buying decision- On social commerce, shoppers are Live-sales appears as 1 of the rising
makers are emerging as highly potential shoppers spending on a wide variety of products, popularity way of shopping
with the top categories are...
Is the frequency of buying
2 times via livestream on social
/week commerce channel
#1 Fashion 
~35%  Vietnamese engagement
#2 Cosmestic  with social media shop is
via live stream
#3 Home appliances 

The most preferred ways of building trust for both gender Among top frequently purchased goods, significant Livestream is a raising trend, yet associated trust
are to read shops’ reviews, listen to friends and family  generational variations were found  issue expose to be the biggest concerns

Source: Desion Lab report, Ikala report 2020, Team analysis

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Executive Summary  Market Dynamics Opportunities Challenges Recommendation
With the strength & availability of payment & supply chain ecosystem, Shopee
exerts to be highly potential towards tapping this market 
Current functional offerings of social commerce platform for merchants 
Customer
Set-up Marketing  Sales Payment Logistics support/
After sale

Logistic
Optional Marketing tools. Selling to Support to
Addional support in (including
Large E.d. ads, tailored customer customers via  live
setting up virtual delivery) via in-
variation by product directly through chat, chat bot, call
store house or third
player recommendations e.g social seller center,..
party providers

Easy set-up
Fundamental Intergration with
(minimum
Required payment
complexity of signing
elements processing 
up) 

Where Shopee can add value Where other social commerce platforms are doing well

Source: Thien Viet report, Team analysis 

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Executive Summary  Market Dynamics Opportunities Challenges Recommendation
Vietnam social commerce is an emerging market with no dominant players
holding resourceful ecosystems Each platform has its own merits that outstands others. While social
media take community advantage, e-commerce platforms has an edge
Social driven over shopping ecosystem

Key features

Deliver quickly
Payment ease
Familiar shop

Entertaining
Trustworthy
Community

Convenient
Easy to use
members
Social Media 
Commerce
driven
E-commerce
platforms

Social commerce narrows those feature gaps, serving

larger pool of consumers by offering in-demand, future-
Successful s-commerce models led purchasing solution

Source: Global Research, 2022

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Executive Summary  Market Dynamics Opportunities Challenges Recommendation
 Shopee with the aspiration to discover a new source of growth with lower cost
of acquisition
Location Age Livestream performance
Growth vs
No. H1 2022
2021
​<18 ​<18
15 10 Seller Livestream
72 26% 86%
Rapid growth 72 ​>35  27 Adoption
​>35  12
40 ​18-25
Daily Unique Viewers 500000 180%
32
Daily orders  45000 50%
26 ​18-25 38
13 58 Conversion rate 9%
15
​% New Buyer 15 13 58 ​26-35 ​26-35 Much higher than average 2% conversion
20 22
​%Buyer 20 22 Age range that potential and financial independent 18-25 rate of traditional ecommerce
(gen that active on social media in Vietnam)
​Hanoi  ​Ho Chi Minh ​Others
Promotions Category
Cost to acquire 1 customer ($), Top 3 Fashion
by method in both Growth
and Volume Top 1 by
1.5 The most
are (1) Health Volume
1 effective & Beauty and
promotion is but Last by
0.5 (2) Home &
by Low price living growth
0 initiatives
Voucher Low Price Free Promotion
Initiative Treatment - Fashion is now at stagnant stage
- Growing demand in (1) Health & Beauty and (2) Home & living
Jan-22 Feb-22 Mar3-22 Average category
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Executive Summary  Market Dynamics Opportunities Challenges Recommendation
Shopee has many characteristics to be successful in Social Commerce, yet
there are 4 main challenges …

Competitors

Types Players Lack of social engagement and

interaction with sellers and other
Mass Market (Social Medias with purchase
functions)
customers

Disruptive Players (Focus on Tier 2-3 cities, with Hyperlocal social commerce
customize business model and products) model to tackle unsolved
customers
Customers
Shopee has tapped into social commerce with livestream model. However, Watching live stream is the
LEAST important factors that influence the purchasing decision of consumers on social commerce in
Vietnam in 2022 only 20% Trust issue
In Vietnam, buying online in Social media ranked last in trust for Vietnamese consumer with only 24%
especially from people aged over 40
Company
Free Shipping Voucher  3,944 5,564 7,648 High-cost (Warehouse and
logistics operations, delivery and
Shipping cost is more expensive in smaller cities, customers have to use more shipping voucher promotions)
Source: Global Research, 2022, Statista, 2022, BCG, 
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Executive Summary  Market Dynamics Opportunities Challenges Recommendation
 To fully capture the opportunities & overcome challenges, 2 key development
pillars for Shopee are identified to thrive in Social Commerce
Social Reselling model
Content-driven
Content created by brands/
partners/ consumers that drive
discovery, engagement & call to
action

From Powerhouse Experience-driven

to People-powered
Livestream
Shoppers participate in interactive
shopping experiences along the Community Group Buy model
journey
\
Network-driven
People leverage their network to
obtain bulk cost-saving, drive sales
& earn commissions

Main focuses Team Purchase model

Community
Social Reselling Team Purchase
Group Buy

It's not about attracting users to Shopee, it's

about bringing Shopee to them!
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Executive Summary  Market Dynamics Opportunities Challenges Recommendation
…Which helps Shopee to successfully embrace 2 big & potential market segments
Social Reselling Community Group Buy Team purchasing
- Geography: metro & tier 2 cities - Geography: tier 2, 3 & beyond cities Suitable across markets
- Turbochargers entrepreneurs - Women (e.g., housewife) and/or
(mostly women); Students low-income groups
To whom?
wanting to do business
• Compelling
• Sellers to choose products on • Sellers to focus on leveraging their End-consumers to aggregate
opportunities
Shopee & sell it to customers social circles orders by pooling a group of for both
• When order is placed, the goods • Community leaders/Local pickup online users with shared
will be directly delivered from points to aggregate orders from interests & preferences buyers &
Do what? supplier to the end customers near-by locals in the neighborhood
& receive commission
sellers
Reseller: End-consumer: Community End-consumer: End-consumer:
- Minimum or no - Direct seller leader: - Convenient to - Save logistics cost • Economies of
upfront
investment
support
- Product
Generate income
with minimum
buy
- Buy at better
- Buy at better price with
more discount by inviting
scale for
Benefits - Inventory & consultation upfront price with little/ more people to join Shopee to
(VP) delivery investment no delivery cost
facilities support enjoy
Higher volume More interaction
& sales between users

Reinforce Lower supply More users Better user

More social
model chain cost (buyers & sellers) experience

More saving to users More trust & recognition

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Executive Summary  Market Dynamics Opportunities Challenges Recommendation
Rather than a handful power placing in big retailers/brands, the math is shifting
towards individuals and smaller businesses power with support from below enablers

Users

Business model Enablers

Influencers Resellers
Creators Experience- Live- Polite live-stream Quality content ->
Encourage UGC
driven streaming content community-based

Social
Small brands Reseller's commission Partnership with social platforms (Zalo)
reselling

Network- Community Reseller's 

Partnership with social platforms (Zalo)
Commerce driven group commission
Enablers
Reseller's 
Team buy Partnership with social platforms (Zalo)
commission

Develop applications for group interaction: messaging,

entertaining, sharing, etc via commerce platform
Big
Brands
Big Big
Brands Brands

Source: Global Research, 2022

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Executive Summary  Market Dynamics Opportunities Challenges Recommendation