Max Bosenko

$SE Being my largest position, I obviously think a lot about the risks of owning the business. I think the clearest one people point to today is TikTok Shop, and rightfully so. I'll be honest, I have been very impressed by their execution and I believe it is the smartest commerce model seen in years. They have 3 key strengths imo: 1. Creator-led distribution Creators are probably the best sales channel any merchant/e-commerce platform can hope for. They review, demo, compare and entertain while earning affiliate commissions. TikTok Shop gets free content and traffic. Essentially, merchants now have thousands of micro-salespeople that they don't even have to pay to advertise for them. It is a true win-win-win. 2. Full-stack funnel Most platforms only control part of the chain. For instance, Meta/YouTube control attention but don't have the checkout funnel. Amazon/Shopee and the like control the checkout funnel but don't control discovery. TikTok Shop is the only business that controls both. That is convenience that cannot be understated. Users discover content, choose the product and checkout all within the same app. It's seamless and perfect. 3. Algorithmic discovery This is what TikTok Shop is best known for. Traditionally, e-commerce was just shopping but online. Consumers already knew what they wanted and then hop onto e-commerce platforms to search for the product. TikTok Shop creates demand. Users buy items that they either didn't know they needed, or actually don't need (but want it anyway). This expands the addressable market massively, especially for trend-driven, impulse-friendly categories like beauty, fashion, gadgets, and home products. Why this matters for $SE Shopee: TikTok Shop isn't just "another marketplace" like Lazada, Tokopedia. It’s a structurally different commerce model, and a real competitive threat that deserves to be taken seriously. So what do I think as a $SE shareholder? First, I don’t think this is a zero-sum game overnight. TikTok Shop is phenomenal at discovery-led, impulse-driven commerce. But a huge portion of e-commerce is still: - Planned purchases - Price comparisons - Repeat buys - Necessities and replenishment - Higher-ticket/Higher-risk items That sort of behaviour is precisely where Shopee's strengths lie. To me, Shopee's strengths today lie in: - Massive buyer and seller liquidity Shopee has hundreds of millions of active buyers, millions of active sellers. This leads to huge SKU breadth and deep price competition in most categories. This creates a flywheel where buyers come because there's selection and good prices while sellers come because that's where the buyers are. TikTok Shop is growing fast, but it still needs to build seller depth in each category, price competition and most importantly, reliability and consistency at scale. - Deep logistics integration Over the years, Sea has built and integrated warehouses, sorting hubs, last-mile partners, cross-border logistics etc... This is especially key in a region like SEA where geographies are fragmented, with varying infrastructure quality and customs regimes. Fast and reliable delivery increases conversion while predictable delivery increases trust. Owning their own logistics network also allows for lower cost per order and scale improves the unit economics over time. TikTok Shop lacks this and instead relies on 3rd party logistics partners, meaning they have lower margins and higher cost per order. - Local market execution SEA is not one homogenous market. Each country has different nuances. For instance, Indonesia is more price-sensitive, continues to rely on COD (albeit declining in share gradually) and is a logistical nightmare. Thailand has high urban concentration which makes it geographically simpler than ID/PH for eg. Thai consumers are more brand-conscious in certain categories and compete more on UX, trust and speed. Malaysia/Singapore are generally more developed, with higher card and e-wallet penetration. Logistics infrastructure is also much stronger, hence more expectations on delivery speed, reliability etc. SEA has spent a decade here localising payment methods, logistics partners by country, UI/UX by market, campaigns, promotions and shopping festivals. There is also lots of seller tooling and support. This regional operational depth is likely to be key for Shopee. - Habit and repeat usage A large portion of Shopee's volume is about replenishment of household items, repeat SKUs, similar stores, categories and buying patterns. This creates habit and behaviour that consumers default to over time. People are not going to want to discover new types of toothpaste/toilet paper each time or watch videos on buying detergent. Hence for these use cases, Shopee is faster, more predictable and well placed to serve. TikTok Shop is also creating tons of new demand that Shopee could very well benefit from. Many consumers in SEA will still revert to price comparison. Due to Shopee's deep liquidity and competitiveness in pricing as discussed above, it is likely that their platform is where prices are lowest. (Although that has been skewed due to TikTok Shop's heavy promotions/discounts) Shopee is not giving up on the discovery game either. It has partnerships with Meta and YouTube in Southeast Asia. As part of the Meta deal, there are new features that allow affiliate creators to tag Shopee products in Facebook posts and Reels, enabling shoppers to click and complete purchases on Shopee. Collaborative ads are also being piloted, letting brands and sellers highlight products from Shopee catalogs during Facebook Live sessions. There is also the YouTube Shopping Affiliate Program that enables Shopee sellers to have their products promoted by eligible YouTube creators via YouTube videos, Shorts & livestreams. Creators tag the products promoted in their YouTube videos which will redirect traffic directly to the specific product on Shopee. Viewers can tap the “View Product” button directly in the video to see product details & purchases on Shopee all without leaving YouTube. As we know, Meta and YouTube together still control a massive share of time spent and possesses the largest creator ecosystems in the world. This turns those very creators into promoters for Shopee merchants in the same way TikTok Shop has. So far, there is quite limited information on how successful these have been, but I expect it to be a needle-mover sooner rather than later. Bottom line as a $SE shareholder TikTok Shop is a real, credible, and structurally strong competitor. It absolutely raises the bar for Shopee. But Shopee isn't standing still and they have operational moats that allow it to continue being a major player. My base case today is that TikTok Shop becomes a major commerce channel in SEA, especially for discovery-led categories and Shopee remains the dominant utility for price discovery, planned purchases, everyday commerce etc, while increasingly plugging into the social discovery upstream. That's why I'm still very comfortable owning $SE today.