This article first appeared in Digital Edge, The Edge Malaysia Weekly on March 10, 2025 - March 16, 2025

E-commerce has become a crucial platform for micro, small and medium enterprises (MSMEs) and many are finding opportunities to grow through online marketplaces.

Shopee, one of the country’s most-visited e-commerce platforms, has placed a strong emphasis on supporting local businesses, says Terence Siau, country head of Sea Ltd Malaysia.

Beyond just providing an online marketplace, the platform integrates local sellers into its ecosystem, from warehouse operations to logistics and workforce hiring. Unlike platforms that rely heavily on foreign merchants, Shopee prioritises Malaysian entrepreneurs, ensuring that local businesses have a dedicated space to reach consumers.

Siau says this focus on hyper-localisation has contributed to long-term economic growth, helping small businesses expand their reach, enhance their digital capabilities and compete in an increasingly digital economy.

“Hyper-localisation has been our winning formula since day one and will continue to guide our future efforts.  The majority of sellers on Shopee are MSMEs,” he adds.

For instance, the #ShopeeSapotLokal campaign, introduced in 2022, encourages Malaysians to support local businesses by buying from local sellers on the Shopee platform.

“This initiative aims to boost the Malaysian economy by empowering local entrepreneurs and promoting the growth of home-grown brands. By choosing to shop local, consumers can contribute to job creation, support local communities and enjoy authentic products made in Malaysia,” says Siau.

Shopee was launched in 2015 as part of Singapore-based technology company Sea’s e-commerce and digital financial services. Shopee is the company’s e-commerce platform, while Garena is its digital entertainment arm and SeaMoney its digital financial services division.

Sea was originally founded as game development company Garena in 2009 and later rebranded as Sea Ltd in 2017 to reflect its expanded business interests.

Meanwhile, Shopee became one of the leading e-commerce platforms in Southeast Asia and Taiwan, offering a wide range of products and services to consumers and sellers.

“Shopee was set up in 2015. We thought there was an opportunity to set up a marketplace that is always available to our consumers and also to the small businesses in the countries that we operate in, connecting them and enabling them to scale,” says Siau.

Malaysia’s strategic geographical location within Southeast Asia, alongside supportive government policies, has enabled Sea to cultivate a significant presence, especially in the burgeoning digital economy.

“Sea Ltd’s core objective through Shopee was to bridge the gap between small businesses and consumers in the digital economy. Shopee serves as a platform for local businesses, especially MSMEs, to bring their products online and reach a wider customer base,” he says.

A report by retail insights company Cube Asia, titled What Malaysia’s E-Commerce Market Data Says About Its Future Growth, reveals that Shopee recorded the highest traffic with over 43% traffic share among e-commerce marketplaces in Malaysia in 2023. The platform had 37 million monthly web visits and 629,000 monthly app downloads on Android phones.

To keep up with evolving market trends and competitors, Shopee also embraced social commerce through its app.

“As e-commerce matures in this region, so too do consumer expectations in several ways. Consumers seek more interactivity and trust to guide their purchases. We launched Shopee Live so that customers can get inspiration and interact with sellers to find out more and ask questions before making their purchase,” says Siau.

To help customers better discover products through their community circles, Siau says the company works with key opinion leaders and influencers through affiliate programmes to help them inspire their followers with relevant products.

“With Shopee Live, we are seeing a huge growth compared to the traditional. I think we have a higher uptake of video shopping. Also within Southeast Asia, there is a higher degree of acceptance as well,” he adds.

Siau says this shift has also benefited sellers, with over 75% of Shopee affiliates having successfully created personalised content and human-centric shopping experiences for their audiences.

Shopee Live is a function that allows merchants and sellers to host live stream sessions to promote their shops and products directly to buyers. Introduced in 2022, the feature lets buyers interact with the sellers via chat in real time to find out more about the products being marketed and purchase them directly while watching the live stream.

Common pain points MSMEs face when trying to expand regionally or internationally include the high costs of setting up international operations, effective marketing strategies for foreign markets, managing processes across borders and providing adequate customer service to international clients. These challenges collectively prevent them from effectively scaling their businesses.

Siau says while it is possible for businesses to set up and sell directly through social media or their own websites, they struggle with issues of cross-border trade, such as selecting logistics providers, import and export permits and taxes too complicated for rural or small-scale businesses to manage.

“We started the effort way back in 2021 and it will continue into 2025 where we are going to expand our logistics for Shopee presence to Sabah and Sarawak, especially for the underserved population,” says Siau.

“When I say more effort in Sabah and Sarawak, we mean a substantial investment in logistics. The challenge lies in the distinct physical infrastructure of the region, which, despite using the same logistics companies, makes deliveries from Peninsular Malaysia considerably more expensive.”

This, he says, serves as a disadvantage for the population in Sabah and Sarawak and Shopee Malaysia is trying to resolve the issue so that cross-border logistics are much more accessible for businesses, especially MSMEs.

Other than logistical hurdles, Shopee is also tackling the financial barriers that MSMEs and consumers face in the digital economy. As an e-commerce website, the company recognises the evolving landscape where digital financial solutions are emerging in the market.

Shopee’s buy now pay later (BNPL) service SPay Later, introduced in 2021, seeks to address the financial needs of underserved segments of the population by providing alternative credit access. This initiative also enables Shopee to assess user financial behaviour and establish credit scores for individuals with limited credit history, facilitating the allocation of appropriate credit limits.

SPay Later offers a 30-day credit deferment, which can be extended to three months, with no fees attached. This credit deferment can also be extended to six to 12 months, where a 1.5% processing fee is charged every month based on the full sum of the order.

In 2023, Shopee introduced another digital microfinancing service, SLoan services, which provides microloans to both sellers and buyers looking to gain a bit of working capital and assistance in smoothening their cash flow.

Siau sees these services as a complementary solution on Shopee’s platform and that this can provide some relief for smaller businesses or less fortunate consumers who are in need of some extra money, be it for personal or seasonal reasons.

“I think one of the key things is how users have reduced their reliance on some other forms of loans. Over 47% of users have stopped or significantly reduced borrowing from their friends and families and 42% have stopped going to pawn shops,” says Siau, citing data from Shopee’s survey of BNPL consumers.

There are measures in place to tackle late repayments. These include accounts being frozen to prevent further accumulation of debt and, in certain circumstances, charging RM10 to unlock an account.

In addition to providing accessible microfinance, Shopee also reinforces financial literacy programmes for its users.

One of its many initiatives includes being a collaborator on Bank Negara Malaysia’s yearly Karnival Kewangan event, where Shopee will go to the ground to educate the public on financial management, financial literacy and smart borrowing.

Siau says it has engaged 150 trainers to teach 15,000 teachers on financial literacy after a survey by Bank Negara revealed that schoolteachers are vulnerable to scams.  The teachers in turn can relay this information to their students. The topics include budgeting and fraud awareness. 

“It’s about increasing awareness and the frequency to constantly educate people, just like how you would teach your parents to not open suspicious links. It’s the same approach here, and we are trying to target different segments now too,” he adds.

Siau says Shopee has also begun working with the Sarawak government’s Financial Education Network and the financial industry on a pilot training module on personal finance management for 30 key trainers of the Ministry of Education in the state.

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