Sea Limited: The Shopee Brazil Playbook

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So, this was already under your plan, right? What you're describing is your plan?

Then I studied the seller aspect and had my eureka moment. That was the fragility of Mercado Libre when we joined. Sellers relied heavily on Mercado Libre and were very dependent on them. During the pandemic, with no physical stores, Mercado Libre dominated ecommerce. However, sellers generally disliked Mercado Libre. They charged an average 25% take rate, sometimes 27%, and sellers couldn't negotiate or complain. Mercado Libre retained their payments and obligated them to pay for advertising in an arrogant manner.

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So, this was already under your plan, right? What you're describing is your plan?

Sellers had limited alternatives. Magalu was struggling, Amazon, at that time, had zero relevance, or sellers could try to do direct sales with their own websites, and a little through Americanas. So if the seller left MELI, they were dead.

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So, re-leveraging Correios and paid acquisition, paid customer acquisition.

At that moment, they had around 500,000 sellers. I could identify them, although I didn't know the revenue or GMV. By simply looking at the biggest sellers and the units each one sold, and knowing the average value because it's published, I hired an army—literally thousands of people in Asia, where labor is cheap. They entered the public pages of MELI and scraped everything that was publicly available: the sellers, the prices, the main SKUs, how many items. Within 45 days I had an estimation of the most important sellers in Brazil. I could even estimate their revenues because I knew how much they were selling, in rough numbers. I got the whole list.

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