Visa has announced a five-year regional strategic partnership with e-commerce platform Shopee that intends to spur greater participation in Southeast Asia’s digital economy.
The agreement includes collaboration on a number of initiatives to extend access to the digital economy for micro, small, and medium enterprises (MSMEs) across Southeast Asia.
These businesses will be incentivized to digitalize their business on Shopee and adopt digital payments through Visa. The payments giant will also tap on Shopee’s extensive user base to expand its presence with Southeast Asia MSMEs and online shoppers, the announcement said.
Shopee and Visa will also launch co-branded credit cards in selected markets in partnership with local banks in the next few months. The cards will offer shoppers integrated and seamless rewards and allow Visa to reach more local consumers, Shopee said.
When a small business goes digital, it’s plugged into a much broader commerce landscape. Visa is working to help any business, regardless of their size or location, better attract and serve more local and global customers by getting enabled to accept digital payments in a safe and secure manner,» Neil Mumm, Visa’s regional head of merchant sales and acquiring, Asia Pacific, said.
The announcement noted that Southeast Asia is on track to become the fourth-largest economy by 2030, with an increasing share of GDP driven by the digital economy.
The region’s e-commerce market is estimated to be worth $150 billion by 2025, up from $38 billion in 2018, according to a report by Google.
Shopee, which is owned by internet gaming, commerce and digital payments firm Sea, is a force to be reckoned with in Southeast Asia. Launched in 2015, the platform accounted for nearly a quarter of the combined gross merchandise value in Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam in 2019.
Sea’s second-quarter earnings, released in August, indicated revenues of $1.3 billion – almost double from the quarter before, fuelled by revenue gains in online gaming and e-commerce, jumping 62 percent to $716 million and almost tripling to $511 million, respectively.
The company remains unprofitable, with losses for the quarter growing 59 percent year-on-year to $373 million, largely due to Shopee’s costly battle for market share with regional rivals Lazada, which is owned by Alibaba, and Tokopedia in Indonesia, also backed by Alibaba.