Garena’s Shopee sees strategic long term partnership with Pos Malaysia

Shopee regional MD Ian Ho and Pos Malaysia group CEO Mohd Shukrie Mohd Salleh.

The e-commerce marketplace unit of Southeast Asia’s largest internet company Garena, Shopee is looking at a long term collaboration with national courier Pos Malaysia to tap onto the growing e-commerce sector.

For starters, Shopee and Pos Malaysia have teamed up to give all sellers on the platform free shipping.

Since the launch of the free shipping programme, some customers have seen business grow two to three times, Shopee said.

Shopee regional managing director Ian Ho said the free shipping programme runs until the end of June, although both parties may consider extending if it is well-received.

The programme grants sellers a capped subsidy for deliveries of items across Malaysia.

“I think it’s going to be a long term relationship will Pos Malaysia. There are two main components to e-commerce, one being payments and one is logistics. At Shopee, we don’t have our own logistics arm so the natural choice is to work with the largest courier service in the market that we are in,” he said.

“One of the reasons we have this free shipping progamme is because we found that for sellers, one of the biggest barriers to entry is shipping; a lot of their budget goes into shipping. We took a look at who our sellers are using and found that more than 70 per cent of them are using Pos Malaysia. The intention was not to change behaviour,” Ho explained.

He added that the collaboration with Pos Malaysia will go beyond free shipping, to also include the new initiatives Pos Malaysia has targeted at e-commerce business owners.

Pos Malaysia group chief executive officer Mohd Shukrie Mohd Salleh noted that “e-commerce is the way forward” for the company’s growth, looking to provide for the needs of consumers and e-commerce players.

The national courier has thus far launched an E-commerce Hub in March this year, to provide businesses and consumers a wider platform and reach via online marketplaces.

It has also recently introduced the Pos Laju EziBox to enable entrepreneurs, consumers and the public to collect items at their own convenience.

“This service will soon be extended to Shopee’s shoppers to select Pos Laju EziBox as their alternative to the Pos Laju shipping or delivery address,” Salleh said.

He added that Pos Malaysia will add over 100 more EziBoxes around the country.
In addition, Pos Malaysia will also be rolling out a drive-through service for consumers to pick up their items on the go, Salleh said.

“Malaysia is an important market”: Ho

Barely six months since its launch in the Malaysian market, Shopee has garnered over one million downloads, and more than a million products uploaded for sale on the platform.

The customer-to-customer (C2C) social marketplace, launched in Malaysia in December 2015, is a free-to-use platform with no listing and commission fee.

Addressing DEALSTREETASIA’s question on its revenue strategy, since it is a free platform at the moment, Ho said that the company is focused on building up its platform at this stage.

When asked about the investments Garena is channeling into growing Shopee, Ho declined to comment.

Garena has said that the recent $170 million Series D funding led by Khazanah Nasional Bhd will largely go into building Shopee’s business in the region.

Shopee is currently rolled out in seven countries – Singapore, Malaysia, Indonesia, Thailand, Vietnam, the Philippines and Taiwan.

It is also collaborating with national couriers in Thailand and Taiwan to address logistics needs of e-commerce business owners in those countries.
Ho said there will be more of such tie-ups in the countries Shopee has footprint in.

In Malaysia, aside from Pos Malaysia, it has also partnered GDex.

Similarly, Shopee is also partnering the largest courier services in other markets it has entered.

When asked how Shopee sets itself apart from other similar players already established in the region, Ho said Shopee has secure payments and logistics services, which other C2C marketplaces may not have.

“We provide safety for sellers and buyers. The other thing that sets us apart from other similar players is our social platform where buyers and sellers interact directly. When buyers have a problem with the item they purchase via the platform, they can talk to the seller and when the sellers have something to promote, they can reach out to their buyers directly. We believe the sellers are able to own the buyers,” he said.

Shopee also formed a dispute resolution team to help buyers and sellers solve any problems that arise between them.

“We always encourage all transactions to go through Shopee so we can protect both buyers and sellers,” he said.

On market potential in Malaysia, Ho noted that the e-commerce segment makes up only 1 per cent of the retail market in Malaysia. “We can see that the propensity for growth is enormous,” he said.

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