Shopee exited Poland: mismatch with the market
Wojciech R. Bolanowski, MD PhD
Chief AI Officer, retail and digital banking, payments and fintech in EU, GCC, SEA, enthusiast of cross-border banking
Wersja polska/Polish version:
The package from China
Recently I got the package with the purchase I made on Shopee.pl on January 12, 2023. On the same day Shoppe announced that it would leave Poland. The last day for purchasing on the platform was January 13th, just one day after I made my shopping there. It is quite likely that I was one of the last customers of Shopee.pl. The package arrival reminded me about the event almost a month later. I wonder if it is much sense to come back to the past and discuss deeply the reasons why ecommerce giant (Shopee is a market leader of far Asia and reports more than 230 mln. Active customers) left mid-size central European market. The major discussion on the subject took place just after the announcement, anyway.
One of the last packages from Shopee.pl
Mismatch with the market
Generally, all agreed that Shopee underestimated the specific of the new market it entered. Poland was the first, but not the only market in European Union the company entered in 2021. Yet, without much success. Shoppe had already left France, before announcing the same step in Poland. Company said they want to focus on Latin America as the most promising region for their expansion. They also added a significant macroeconomic uncertainty of the region to the list of the decisive factors. However, experts blame uniform market strategy, not adjusted to European specifics, for the failure of Shopee adventure on the continent.
Homepage of Shopee on January 13, 2023 …
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… and another screenshot made on that day
Misleading positioning and terrible user experience
Indeed, there was not discount strategy, quite long delivery times, and domination of China-located e-stores which was the worst. Buyers understand that to get the cheapest stuff they need to accept some limitations and inconvenience. The problem was that there was already Chinese eCommerce platform in Poland. AliExpress was easily recognized as the place-to-go for cheap stuff, which one must wait for, but eventually enjoys the favorable pricing. And, for sure, AliExpress is a real China, Shopee not. The positioning of the platform seemed to promise something beyond the cheapest discount on the internet and advertising, including the famous viral clip with soccer super-star Christiano Ronaldo, created more sophisticated expectations. However, buying on Shopee was nothing better experience than using any other China-inspired marketplaces. Chaotic, overcrowded, non-intuitive marketplace with horrendous ways to interact with sellers and unclear customer dashboard was too much for demanding, European customers. It is enough to say that text chat with e-shop was not a real time tools and frequently seller staff was not available on-line to answer customer questions.
More and more mismatch
All those factors are common also among digital start-ups in financial services. Neglecting positioning, ignoring importance of user experience, failing to deliver promises are major reasons why so many neobanks could not take off. Eventually, Shopee was not the service they claim to be, user experience was disappointing failure, value proposition was not different from the one of AliExpress (which was earlier on the market and more recognized as a platform to buy Chinese stuff). There was virtually no benefits which were recognized and cherish by the European customers. There was no the same day delivery, no loyalty program (still, there was some complex bunch of bonuses and internal currency which was hard to understand and even harder to use by an average buyer), but there was a complex and weird logon/login system. Personally, I opened two separate, independent customer accounts without realizing this fact till the moment I buy something on one profile and could not see my order while being logged in the other. Shopee was, so to speak, the victim of the mismatch between market expectations and their own, successful elsewhere, operating model.
Growth is not enough
Subsidizing parcels delivery and aggressively promoting discount policies Shopee was able to gain a lot of recognition and significant traction in Poland. It took less than half a year to registered 11 million users and became the third ecommerce platform in the country. AliExpress, however, was still more popular, occupying the second place. It showed, again, that growth of volumes is not the only or decisive element of conquering new markets. The lesson could be a valuable reminder for both start-ups fighting for their first customers as well as for global companies aiming to invade another regions. For Shopee the latter was a case.?Maybe the lack of clarity about future struggle with well-established competitors was a major reason for Shopee to cut losses fast and leave. Interestingly, the number one of Polish eCommerce is a local champion Allegro.pl. The company already resisted the invasion of some foreign heavy weight players like eBay, which had come here in 2005 only to exit few years later.
It is history: footnote showing Poland as a country where Shopee is operational (January 2023) note that although countries are listed with their Polish names (e.g. Tajwan, Brazylia) yet Poland is written in English
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