As TikTok Shop (TikTok 商店） rapidly expands in Southeast Asia, Shopee (虾皮) faces one of the toughest challengers in its history. Founded in Singapore in 2015, Shopee was once the undisputed leading e-commerce platform in markets like Vietnam and Indonesia. Today, it is focusing on live streaming, short videos, and viral marketing to engage users, which requires it to raise seller fees to cover increased operational costs.”
Shopee is evolving quickly: expanding Shopee Video, partnering with YouTube and Facebook, and optimizing logistics through Shopee Express. But as China’s Lishi Business Review (砺石商业评论) observes, staying ahead demands more than speed—it requires agility, deep local understanding of Southeast Asia, and a careful balance between expanding business and making profits.
Still a household name among the Southeast Asian Chinese community, Shopee is a subsidiary of Sea Limited (冬海集团), a Singapore-based tech conglomerate listed on the New York Stock Exchange. By 2024, Shopee had captured over 52% of Southeast Asia’s e-commerce market, generating a GMV (Gross Merchandise Value) of US$66.8 billion (around S$90.8 billion). In six key markets—including Indonesia, Vietnam, and Thailand—it remains the top local e-commerce platform. GMV measures the total value of goods sold on a platform over a given period.
Shopee began as a mobile-first C2C platform, using platform escrow to build trust between buyers and sellers. Its early trajectory mirrored that of China’s Taobao (淘宝）, yet today the company faces serious pressure. With TikTok Shop aggressively entering Southeast Asia, Shopee’s market share is steadily declining in key markets like Vietnam and Indonesia.
In 2015, Forrest Li （李小冬）— a Chinese national freshly graduated from Stanford with an MBA, carrying US$100,000 in student loans, and with a wife and daughter—moved to Singapore. Sea Limited, the company he founded, had already established a presence in Southeast Asia through online gaming.
At the time, Singapore’s e-commerce market offered limited product variety compared with Taobao, and ordering was cumbersome—a pattern repeated across Southeast Asia. The region has around 600 million people across 11 countries, speaking different languages and using different currencies while many lacked bank accounts. Li saw opportunity in this “blue ocean” market.
Shopee launched its mobile app in Taiwan in 2015, emphasizing the C2C model with the slogan: “Sell in 30 seconds.” Sellers could snap a photo, enter a few details, and launch a store in half a minute. This mobile-first strategy was deliberate: smartphones were far more common than PCs in the region, and Shopee made opening an online store as simple as posting on social media.
Low trust in the market posed another challenge. Buyers distrusted unknown sellers, and sellers worried buyers would not pay. Shopee addressed this with the “Shopee Guarantee”: payments were held in escrow until buyers confirmed receipt.
In July 2017, Shopee introduced Shopee Mall, a B2C model featuring over 200 established brands. The strategy combined C2C for a wide range of niche items and B2C for trusted brands, appealing to both cost-conscious and quality-conscious shoppers.
Logistics in Southeast Asia presented further challenges. Indonesia alone has over 17,000 islands, and the Philippines more than 7,000. Shipping was costly and slow. Shopee initially partnered with over 70 local logistics providers—including Ninja Van in Singapore, Pos Malaysia, and Pos Indonesia—and later launched Shopee Express (SPX) to provide same-day and next-day delivery, which now competes with TikTok Shop’s partner J&T and has become a mainstream delivery channel.
Low bank account and credit card penetration made cash-on-delivery (COD) dominant in Indonesia, Vietnam, and the Philippines. Shopee adopted a two-step approach: maintain COD for the unbanked while introducing ShopeePay, an in-app wallet operated by SeaMoney, to foster online payment habits. Initially a bridge, ShopeePay quickly solved payment challenges, educated users, and built trust. By 2025, it became Sea Limited’s second-largest business, generating US$3.8 billion, or 16% of total revenue.
Anticipating TikTok’s rise, Shopee launched live streaming and short video features, such as Shopee Video, in 2019. Celebrity marketing amplified reach—for instance, Cristiano Ronaldo starred in a “Baby Shark” ad that went viral, reaching 19 million users and tripling sales during the campaign. These efforts helped Shopee capture mindshare early, fueling rapid growth.
While Shopee drew inspiration from Taobao, replicating a Chinese model in Southeast Asia is not a straightforward task. JD.com (京东) attempted its heavy-asset approach applied in China —self-owned inventory, large warehouses, and strict quality control—but Southeast Asia’s fragmented geography made this unsustainable.
Shopee instead embraced deep localization: country-specific teams, local influencer partnerships, promotions tied to local holidays, and content in local languages. Even granular strategies, like selling individual mask sheets rather than whole boxes, catered to local demand. This localization effort created a competitive moat difficult for rivals to copy.
However, deep roots come with trade-offs, noted Lishi. While competitors like TikTok Shop do not need deep localization, Shopee’s entrenched systems can become a liability. TikTok Shop’s “content-as-shelf” model—embedding products directly into videos, articles, or livestreams—disrupts traditional search-based e-commerce.
In Vietnam, Shopee’s market share fell from 61% in 2023 to 56% in 2025, while TikTok Shop rose from 24% to 41%, narrowing the gap from 37 to 15 points in just two years. Shopee responded by promoting Shopee Video, collaborating with YouTube and Facebook, and charging higher seller commission rates in key markets—projected to generate an additional US$400 million annually. But this dual strategy presents a dilemma: content growth requires active seller participation, but higher fees push some sellers to TikTok Shop.
Shopee’s rising fees and TikTok Shop competitions force sellers to optimize operations, balancing stability with growth. Many now adopt a “dual-platform” strategy: Shopee for core income, TikTok Shop for incremental growth—mirroring the dual Taobao-Douyin (抖音） approach in China. Douyin is the sister app of TikTok in China.
This clash raises a broader question: will the future favor traditional “shelf e-commerce” or content-driven commerce? Lishi asked. In China, Douyin has eroded Taobao’s traffic edge, yet both platforms are converging: Douyin adds search and marketplace features, Taobao increases short video and live-stream content. Neither model has fully displaced the other.
Southeast Asia’s fast-growing, still-maturing market demands more than copying China—it requires integrating localized operations, efficient logistics, and rich content in platforms. Shopee’s struggle is emblematic of the evolution of the world’s fastest-growing e-commerce region. Shopee’s story is far from over, Lishi remarked.
