The cross-border e-commerce sector is abuzz with news of massive layoffs at Shopee, confirming earlier industry predictions of a global contraction. While markets in Europe and South America have already seen setbacks, even its home turf in Southeast Asia now faces challenges.
The layoffs have been swift and severe, with reports of employees being dismissed immediately after morning meetings. Though the severance package offers N+2 compensation, departments have been decimated at rates of 30%-60%, with some teams facing 90% cuts. Key affected units include video services, Android development, business lines, and Content Service, while the food delivery division was entirely disbanded.
Southeast Asia: A Battleground for E-Commerce Giants
As Shopee consolidates its operations around Southeast Asia, competitors are capitalizing on the region's growing potential. TikTok Shop's recent performance highlights both the market's promise and the missed opportunities in Shopee's European strategy. Similarly, Pinduoduo's Temu is aggressively expanding into Southeast Asia, with many Amazon sellers relocating operations from Western markets to Singapore.
The region's appeal lies in several key advantages:
- Faster logistics compared to Western markets
- Shorter payment cycles
- Lower operational risks despite smaller order values
Emerging Alternatives for Sellers
Industry observers note two particularly promising models for regional expansion:
Independent storefronts allow brands to maintain control over customer data and avoid platform restrictions, while TikTok Shop leverages its vast user base and social commerce capabilities for rapid customer acquisition.
The choice between these approaches depends on product characteristics and operational capabilities, but both demonstrate that multiple viable paths exist in cross-border e-commerce beyond traditional marketplace models.
Navigating a Complex Market
While Southeast Asia presents significant opportunities, its competitive landscape and cultural diversity require careful strategy. Success demands thorough market research and adaptation to local consumer behaviors and preferences.
As platforms recalibrate their global strategies, sellers must remain agile in identifying the right markets and business models to stay competitive in this evolving sector.