The Driving Force Behind Sea Ltd.’s Remarkable Stock Surge
In the highly competitive e-commerce landscape of Southeast Asia, Shopee has achieved a remarkable corporate turnaround, with its parent company, Sea Ltd., seeing its stock surge by over 300% since the beginning of 2024. A primary catalyst behind this staggering success is the development and implementation of its proprietary in-house delivery network, SPX Express. This strategic decision to build a homegrown logistics operation came after Shopee’s delivery pipeline struggled to keep up with the explosive demand it experienced during the Covid-19 pandemic. To address this reliance on third-party carriers, Sea Ltd. committed a significant investment of nearly US$1 billion in 2022 to build its own logistics arm. This crucial move has allowed SPX Express to dramatically grow its market share from a non-existent presence in 2022 to approximately 25% in Southeast Asia by 2024, effectively helping to lower overall delivery costs for the company.
A Community-Based Hyperlocal Delivery Model
A key feature of the SPX Express network is its innovative hyperlocal model, which effectively leverages the existing infrastructure and workforce of local communities. This unique system is powered by an army of local individuals, including homemakers, students, and retirees, who act as both couriers and community hubs. The model’s ingenuity is highlighted by its strategy of using private homes as makeshift collection and sorting points, a highly efficient approach that has allowed Shopee to establish more than 3,500 of these sites across Singapore alone. This community-focused approach not only adds a personal touch to the delivery process but also significantly contributes to operational efficiency, as evidenced by the fact that 90% of all parcels in Singapore are delivered the very next day.
Maintaining Competitive Edge and Fueling Future Growth
The success of Shopee’s new model has pushed Sea Ltd. closer to a major milestone: a US$100 billion market capitalization. The company’s e-commerce arm is now projected to account for a significant portion of its record-breaking second-quarter revenue. While formidable competitors like TikTok Shop and others continue to pose a significant challenge in the market, industry analysts believe that Shopee’s impressive retention of market share is directly tied to the unparalleled efficiency of its SPX Express network. This proprietary delivery model helps to reinforce Shopee’s presence in the fabric of local life, from bustling urban centers to quiet neighborhoods, providing a crucial and sustainable competitive edge that analysts believe will be key to its continued dominance in the region.
