Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. Japan
  4. Japan Exchange
  5. SoftBank Group Corp.
  6. News
  7. Summary
    9984   JP3436100006

SOFTBANK GROUP CORP.

(9984)
  Report
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Singapore's Shopee changes the game in Brazil's e-commerce sector

08/30/2021 | 10:22am EDT

Aug 30 (Reuters) - Sea Ltd's Shopee took just two years to become Brazil's most-downloaded shopping app, winning users to its low-cost marketplace with its game-changing approach to e-commerce: in-app mini-games offering coupons to winning users.

The Singapore-based company has combined online shopping with the gaming nous of its separate mobile game arm Garena - creator of "Free Fire", Brazil's most-downloaded title for eight consecutive quarters - to generate sales analysts estimated at almost a third of local champion Magazine Luiza SA.

Back home, Shopee only needed five years to become Southeast Asia's most-visited e-commerce website, overtaking the likes of Lazada, backed by China's Alibaba Group Holding Ltd, and Tokopedia, backed by Japan's SoftBank Group Corp.

"Shopee has a track record in Southeast Asia of coming into the market late, looking at how others have solved existing problems and then building a system to leapfrog those issues," said analyst Jianggan Li at advisory firm Momentum Works.

Shopee's early surge highlights the space left for foreign entrants to grow in a sector once dominated by regional firms like Magazine Luiza and Argentina's MercadoLibre Inc.

To be sure, the startup's timing was fortuitous, launching in Brazil just as the COVID-19 pandemic drove consumers away from physical stores, pushing up 2020 e-commerce sales by 44% to $42 billion, showed data from Brazilian payments company EBANX.

Shopee - akin to Alibaba's AliExpress, carrying Chinese-made knick-knacks - emerged as Brazil's top app by downloads and time spent in use, showed data from analytics platform App Annie.

Shopee said in a comment to Reuters following the initial publication of this story that it now has more local domestic sellers in Brazil than cross-border sellers.

Yet, in pursuit of growth, Shopee is still losing money, propped up by Sea's profitable gaming division. In the second quarter of this year, Garena posted an adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $740.9 million even as the e-commerce arm lost $579.8 million.

"Money being generated by one side of the business, which is a cash cow, is being reinvested aggressively in Brazilian e-commerce - with success," said Itau BBA analyst Thiago Macruz.

GLOBAL AMBITION

Sea's Brazil foray is just one element of its global ambition. Investment arm Sea Capital is also considering putting money into startups in Latin America and beyond, said a person with knowledge of the matter, who was not authorized to speak with media and so declined to be identified.

The firm has also taken Shopee to Chile, Colombia and Mexico where, unlike Brazil, it has no locally based staff and so has partnered social media influencers to increase brand awareness, said two people familiar with the matter.

Sea, whose shareholders include Chinese gaming leader Tencent Holdings Ltd, declined to comment.

The firm has disclosed little data about Shopee Brazil, but Itau BBA analysts estimated the value of goods and services sold on the platform last year hit 12 billion reais ($2.27 billion).

The average price on its marketplace is 40 reais, other estimates showed, less than a third that of e-commerce leader MercadoLibre, which often carries higher-value branded products.

Sea's biggest challenge for Shopee Brazil is delivery in such a vast country. It reduced its reliance on the local postal system this year in favor of private carriers, but is still competing against rivals with proprietary delivery services.

Shopee aims to have one main logistics partner per country in the region, a company source told Reuters.

The company itself expects e-commerce growth in the region to spawn more delivery partnerships, as happened in Southeast Asia, Sea executives told analysts on a call this month.

On the same call, Group Chief Corporate Officer Yanjun Wang called Brazil "a good market for continued investment."

LOCAL SELLERS

Competition in Latin America's largest economy stepped up this month when Shopee's nearest rival in terms of product offering, AliExpress, opened up its marketplace to domestic sellers charging single-digit commission. AliExpress had been in Brazil for 11 years; Shopee did similarly after its first year.

Small-business owner Luciana Carvalho began selling plastic packaging products on Shopee in February, attracted by the free shipping and 6% commission - compared with MercadoLibre's 17%.

"It's easy to sign up, calculate your commission, get your delivery tags, your receipts. It makes us invest more in the platform," she said.

In a move toward profitability, Shopee has since raised commission to 18% - as much as twice marketplaces can charge in some Southeast Asian countries, indicating Latin America's potential profit margins. Carvalho continues to use Shopee, though she prefers MercadoLibre for its "unbeatable" delivery.

To further improve profitability, Goldman Sachs analysts said Shopee could start selling higher-ticket items, as it has in Southeast Asia. Momentum Works' Li expects Shopee to add financial services to its Brazil app as it has in Indonesia.

"I wouldn't be surprised," if they reached number one, said Li, "Given what they have done in Singapore, Indonesia and Malaysia, Thailand."

($1 = 5.2948 reais) (Reporting by Jimin Kang Additional reporting by Fanny Potkin Editing by Christian Plumb, Christopher Cushing and Mark Potter)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ALIBABA GROUP HOLDING LIMITED 0.14% 177.42 Delayed Quote.-23.87%
EURO / BRAZILIAN REAL (EUR/BRL) 1.94% 6.5778 Delayed Quote.2.56%
MAGAZINE LUIZA S.A. -3.50% 13.25 End-of-day quote.-46.89%
MERCADOLIBRE, INC. -1.25% 1583.94 Delayed Quote.-5.01%
MSCI SINGAPORE (GDTR) -0.26% 6830.166 Real-time Quote.17.36%
SOFTBANK GROUP CORP. -2.06% 6574 End-of-day quote.-18.42%
TENCENT HOLDINGS LIMITED -0.79% 505.5 End-of-day quote.-10.37%
THE NASDAQ COLOMBIA INDEXED MARKET -0.44% 379.353768 Real-time Quote.-14.85%
All news about SOFTBANK GROUP CORP.
02:08pSOFTBANK : WeWork shares jump on debut after two-year struggle to go public
RE
06:00aCORRECTED (OFFICIAL)-FOCUS-Tech stampede as investors hunt Latin American unicorns
RE
02:49aJapan's Nikkei falls nearly 2% on election, China Evergrande jitters
RE
02:04aSOFTBANK : Notice of Selection of Prime Market in Tokyo Stock Exchange New Market Segments
PU
02:04aSOFTBANK : Dividend Payout (Interim Dividend)
PU
02:00aSoftbank Group Corp. Announces Interim Distribution for Fiscal Year Ending March 2022, ..
CI
10/20Japanese shares fall as techs track Nasdaq's weak finish
RE
10/20GLOBAL MARKETS LIVE : Kering, Netflix, Roche, United Airlines, Xiaomi...
10/20GoTo to Get Pre-IPO Funding from Abu Dhabi’s Sovereign Wealth Fund
MT
10/20Nikkei 225 Edges Up 0.1% on Tech, Interest-Rate Outlooks
MT
More news
Analyst Recommendations on SOFTBANK GROUP CORP.
More recommendations
Financials
Sales 2022 6 040 B 53 021 M 53 021 M
Net income 2022 1 310 B 11 498 M 11 498 M
Net Debt 2022 15 330 B 135 B 135 B
P/E ratio 2022 8,63x
Yield 2022 0,67%
Capitalization 11 262 B 99 011 M 98 858 M
EV / Sales 2022 4,40x
EV / Sales 2023 4,11x
Nbr of Employees 58 786
Free-Float 69,3%
Chart SOFTBANK GROUP CORP.
Duration : Period :
SoftBank Group Corp. Technical Analysis Chart | 9984 | JP3436100006 | MarketScreener
Technical analysis trends SOFTBANK GROUP CORP.
Short TermMid-TermLong Term
TrendsNeutralBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 15
Last Close Price 6 574,00 JPY
Average target price 10 325,87 JPY
Spread / Average Target 57,1%
EPS Revisions
Managers and Directors
Masayoshi Son Chairman & Executive President
Yoshimitsu Goto CFO, Director & Senior Managing Executive Officer
Raul Marcelo Claure Chief Operating Officer & Executive Vice President
Tim Mackey Chief Legal Officer & Group Compliance Officer
Masami Iijima Independent Outside Director
Sector and Competitors
1st jan.Capi. (M$)
SOFTBANK GROUP CORP.-18.42%100 665
AT&T INC.-9.91%184 994
T-MOBILE US-9.57%152 177
KDDI CORPORATION21.53%72 158
AMÉRICA MÓVIL, S.A.B. DE C.V.23.40%57 847
VODAFONE GROUP PLC-7.39%42 513