BUSINESS MODEL CANVAS Shopee SWOT ANALYSIS

BUSINESS MODEL CANVAS
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Figure 1.0 Business Model Canvas
The business model canvas was originally developed by Alex Osterwalder and Yves Pigneur as
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a visual framework for planning and testing the business model of an organization.
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Business model canvas is a strategic management tool that lets business visualize and assess
their business idea or concept. It’s a one-page document containing nine boxes that represent
different fundamental elements of a business. The business model canvas beats the traditional
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business plan that spans across several pages, by offering a much easier way to understand
the different core elements of a business.
The right side of the canvas focus on the customer or the market which are considered as the
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external factors that are not under one’s control. Meanwhile, the left side of the business canvas
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focus on the business itself which stresses on the internal factors that are mostly under the
business control. In the middle, the value propositions represent the exchange of value between
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the business and customers.
Business model canvas are said to be important for business as it provides a quick overview of
the business model and is devoid of the unnecessary details compared to the traditional
business plan. Next, the business model canvas visual nature makes it easier for reference and
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comprehension. Besides, the canvas clarifies how different aspects of the business are related
to one another and how it can help in brainstorming session in defining the business model of
an organization effectively. The nine elements include in the business model canvas are Key
Partners, Key Activities, Key Resources, Cost Structure, Value Proposition, Distribution
Channel, Customer Relationship, Customer Segments and Revenue Streams.
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Shopee Business Model Canvas
I. Key Partners
Key partners are the relationships that a business have with other businesses to
ensure the success of their business model. These partnerships are forged in order
to reduce risks and acquire resources.
Shopee partners over 70 courier service providers across its markets to provide
logistical support for its users. It firstly collaborated with logistics start-up, Ninja Van,
for item pickup and delivery. Other delivery partners in the region include Pos
Malaysia, J&T and DHL. Secondly, third-party sellers, publishers and digital content
producers are all key partners in Shopee’s operations. Manufacturer of the physical
goods that are stock in Shopee’s warehouses are the obvious key partners.
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II. Key Activities
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Shopee key activities include marketing, research and development, platform
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management and service provisioning.
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In terms of marketing, Shopee has been making significant investments in its
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marketing efforts alongside partnerships in a bid to establish dominance in Southeast
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Asia’s highly competitive e-commerce landscape. Shopee marketing operations is
responsible in conceptualizing and implementing go-to market activities to achieve
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increased usage and visibility. The team covers area including Campaigns
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Management, Community, Public Relations, Partnerships, Offline Marketing and

Design.
Next, Shopee has also been focusing in research and development to innovate and
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introduce new services to improve their existing offerings. This key activity allows
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them to stay ahead of its competitors. For instance, Shopee aims to provide all users
a safe and secure platform to buy and sell online. With that, they have collaborated
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with various payment service provider to process such payment in a fast, convenient
and secure manner and is still exploring for more option to bring more convenience
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to the buyers.
Thirdly, Shopee has been very efficient in maintaining its platform for the ease of use
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by both sellers and buyers. For instance, the introduction of Sub-Account platform in
Shopee is a multi-shop and multi-role management system which allows sellers to
set up different permissions for sellers’ shop to process daily operations. This way,
sellers can have a team of members to manage different shop functions such as
operations, customer service and more.
III. Key Resources
Shopee’s has various key resources including physical resources such as fulfilment
centers which is its warehouse and supply chain automation. Besides, Shopee really
value its workers as they play such an important role to help the business to boom
and expand. Internet shop with no physical address are nothing without the people.
In Shopee, the human resources role has always remained a strong, necessary and
pertinent role in the function of the business themselves. Apart from that, finance
also require Shopee to have cash, line of credit and the ability to have stock option
plans for employees.
IV. Cost Structure
Shopee’s cost structure is driven by value. It means that the company function on a
system that benefits them economically. Its fulfilment centre is a crucial component in
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this regard as it allows Shopee to operate on a global scale. Other essential
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elements utilized in the cost structure of Shopee include its customer service centers
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as well as software development centers across the world.
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V. Value Proposition
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Shopee has cemented its position as providing a safe, convenient and reliable
shopping platform, which is why they continue to utilize its services repeatedly. At
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first glance, one might not be convinced about Shopee’s unique value proposition. In
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fact, the app does bear striking similarities to Carousell.

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However, from the carefully designed UI and subcategories to the tools and
mechanisms to allow smoother transactions between the seller and buyer. Shopee
may have more offer than the competition. Shopee comes packed a range of free
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inbuilt business tools. One of the is the “Seller Assistant” feature. For sellers with a
substantial inventory, Seller Assistant helps to organize items and measure store
performance. This allows the app to make suggestions on which products need to be
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restocked or reduced in price.

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Next, Shopee ensure smooth transactions to avoid fraudulent deals by making the
registration process more stringent than other platforms. Sellers have to provide
their phone number to verify their account. They also have to supply their bank
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account number if they wish to receive payment online. Through its “Shopee
Guarantee” payment service, sellers only receive the money in their account once
the item has been successfully delivered.
VI. Distribution Channel
Shopee’s website and application operate as its largest channel. Different version
exists on its site that aids and abets customers according to its region. Having
business online is the most popular distribution channel as it is convenient and
reduces distributor’s cost for getting information to the customer and securing orders
from them.
VII. Customer Relationship
Shopee performs a number of activities for maintaining good customer relations. This
is the reason the company has always met and exceeded their demands and has
created value proposition in the eyes of customers. There are several strategies
conducted by Shopee to retain its customers.
One of the ways to attract sellers to use its platform is to offer them something that
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other online marketplaces are not offering. And in this case, some obvious ones were
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zero commissions, zero payment fees and subsidized or even free shipping.
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Next, customer retention should be connected with content marketing. Shopee uses
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content marketing and social media to attract customer to use its platform. Shopee
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has created a weekly video series named #ShopeeAdvice to promote products on its
website. #ShopeeAdvice was created with the aim of showing consumers light-
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hearted and easy to consume content that ties back to the variety of categories that
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Shopee has.
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Besides, to boost its sales, Shopee turn their visitors to sales conversions. Shopee
provides in-app features that enable sellers to make numbers reflect their earnings.
One of the keys to improve Shopee sales is to have the sellers become more visible
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to its potential customers. The Shopee MY campaigns feature enables sellers to

plaster certain products into portions of the website that is most visited by buyers.
Lastly, Shopee designed Top Picks From Shop to increase cross-selling. With this
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feature, sellers are able to add four to eight products in a single collection that can be
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displayed on one’s product pages. This encourages buyers to add more of the sellers’
products to their cart and thus increasing overall Shopee sales.
VIII. Customer Segments
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Shopee uses demographic segmentation. It includes basic attributes for each

customer, including age, gender, language and geographical region. In the meantime,
Shopee has also set its new target and long-term strategies which is to target different
segments of the population in the country via its app. Shopee head of seller
management Zed Li said this strategy will not only support sellers, but also help build
purchasing habits in the future.
IX. Revenue Streams
Shopee generates revenue through sales, advertising and affiliate program. Shopee
positioning at this moment is to be free like Facebook/Google with a powerful
advertisement feature for revenue. Shopee My Ads is a feature in Shopee that enable
sellers to increase exposure for their product listings by way of placing
advertisements on Shopee’s web platforms and mobile app. Shopee generates
revenue through the amount charged to sellers for every click they received from their
Shopee ads known as the clickthrough rate (CTR).
Besides, Shopee has also engaged in affiliate marketing program. Shopee has
launched its affiliate program with ACCESSTRADE as its affiliate marketing strategy.
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The platform is said to be user-friendly, secure, well managed and supported
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anytime, anywhere. The potential to generate revenue is immensely based on the
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numerous success stories from those who have signed-up under AccesTrade.
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BUSINESS MODEL CANVAS

the business and customers.

Management, Community, Public Relations, Partnerships, Offline Marketing and

fact, the app does bear striking similarities to Carousell.

restocked or reduced in price.

to its potential customers. The Shopee MY campaigns feature enables sellers to

Shopee uses demographic segmentation. It includes basic attributes for each

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