Shopee: Hitting the Pause Button on International Expansion?

In May 2022, Shopee Pte. Ltd. (Shopee), the e-commerce division of Singapore-based Sea Limited (Sea), was at a critical juncture. Over the past several years, fuelled by the growth of its e-commerce business, Shopee had achieved rapid revenue growth. Starting from Singapore and Southeast Asia, the company had expanded its international footprint to countries in Europe, the Indian subcontinent, and Latin America. But early 2022 brought several new challenges for Shopee: Sea’s stock price plummeted as investors sold off high-growth and unprofitable Internet stocks; and Shopee exited France and India rapidly because it was facing pressure from multiple sources, including an industry association in India and the Indian government, which had banned sales of Shopee’s best-selling game in India. Shopee had to carefully choose an appropriate strategy for further international expansion. Should it pause its international expansion and consolidate in the short term or carry on with the rapid pace of expansion?

This case can be used in undergraduate- or graduate-level courses on strategic management or international business and strategy. The case can effectively illustrate issues relating to competitive advantage, international expansion, and emerging market environment and strategy. The dilemma at the end of the case facilitates the evaluation of strategic alternatives. Shopee’s historical strategy illustrates the carving out of a differentiated position in an industry, the cultivation of appropriate skills, and the successful implementation of an e-commerce strategy by an Internet firm. The company’s recent challenges effectively illustrate the nuances of rapidly expanding internationally and of competing in emerging markets. After going through the case discussion, students should be able to do the following:<ul><li>explain the creation of competitive advantage by a young company;</li><li>understand the imperative(s) to internationalize young firms in a technology industry;</li><li>assess the advantages and disadvantages of rapid international expansion;</li><li>identify the importance of non-market factors (versus market factors), especially in an emerging economy; and</li><li>evaluate the various options for a young company to achieve growth, and recommend an appropriate course of action given the turbulent environment and the company’s strengths.</li></ul>

• international expansion
• competitive advantage
• emerging market
• market environment
• sprinkler strategy
• ecommerce
• market factors
• non-market factors
• growth
• strategy
• India