E-commerce-led profitability in sight
Higher prices and narrowing Brazil losses to improve overall profitability
E-commerce players are focusing on profitability; smaller deliveries have become expensive. Merchants on third-party (3P) e-commerce platforms have increased product-pricing sharply as platforms are charging much higher take rates. Shopee’s well-known market strategy to acquire market shares within a short time was offering free shipping and vouchers in the form of cash. This enabled users to offset some or all their delivery charges. However, Shopee has begun to charge higher delivery charges for smaller deliveries (baskets) considering the mounting logistics costs. This encourages users to consider purchasing from brick-and-mortar stores, thus benefitting physical store players, in our view. Furthermore, effective from April 2022, the free shipping discount was no longer automatically applied upon checkout
When comparing Sheng Siong (SSG) to Shopee Mall, at low quantities, SSG prices are 30% lower. And this narrows when quantity increases since certain Shopee Mall sellers are offering shipping discounts for slightly bulkier purchases. For orders above S$160, Shopee Mall prices come on par with SSG.
While Shopee Supermarket where Shopee owns the inventory is still offering free delivery above S$45 order in Singapore, it offers limited range of products compared to the range available on Shopee Mall. Shopee Supermarket is more price competitive than SSG for both small and big basket size.
