Southeast Asian e-commerce giant Shopee has opened five new distribution centers in Brazil in recent months to improve shipping processes and reduce lead times, according to the Brazilian daily Valor.
The new centers are located in the cities of Sao Joao do Meriti, Campinas, Ribeirao Preto, Contagem and Santana do Parnaiba.
Since its launch in Brazil in 2019, Shopee has been one of the most popular e-commerce apps because of the competitive prices it offers.
The increasing investment in Brazil demonstrates Shopee's confidence in the market, especially given that it has slashed spending and cut many jobs in other regions this year.
Driven by the e-commerce boom during the COVID-19 pandemic, Shopee's gross merchandise volume increased dramatically. Shares of Sea, the parent company of Shopee, have surged from around $40 a share before the pandemic to a high of $370 last year.
With impressive revenue growth, Shopee began aggressive expansion in 2020 and 2021: established operations in Spain, France, Poland, India, and South American countries such as Chile, Colombia, Argentina.
This year, however, the scrappy company has had to scale back as the global e-commerce boom fades, coupled with concerns about tighter monetary policy and rising costs. The company has announced exits in India, France and Spain, and has begun cutting staff in food delivery and digital payments in several markets. The layoffs will extend to its e-commerce teams in Mexico, Argentina and Chile.
Chris Feng, chief executive officer of Shopee, said in an e-mail to employees, “Given elevated uncertainty in the broader economy, we believe that it is prudent to make certain difficult, but important adjustments to enhance our operational efficiency and focus our resources.”
Like other fast-expanding companies that have yet to achieve profitability, Sea's stock price has plummeted this year and is currently standing at around $70 per share.