$SE

Been thinking a lot about the long term value of Shopee’s VIP membership.

Management has been subsidising it heavily and that is reflected in gross margins. AOV has almost certainly fallen massively as a result.

But I believe the long-term value here is being overlooked.

Q1 2025: 1M members

Q2 2025: 2M members

Q3 2025: 3.5M members

Q4 2025: 7M members

The rate of growth is incredible, and despite that, it represents only 1.75% of the entire user base (400M).

At an average membership price of $2 at the moment, it’s a no brainer for most shoppers even in SEA.

This is the first step towards creating predictability in its revenues. Personally, I think we can expect north of 10% in the coming years.

The total active user base will also grow at the same time. Let’s use arbitrary numbers here to prove a point. With Shopee still rapidly expanding within Brazil, I think it is inevitable we see 500M active users sometime in the next 5 years.

Let’s also assume Shopee manages just 10% conversion of active users into members. That would equate to 50M members paying $2 a month or $24 a year, totalling $1.2B.

While this might not seem like a huge number, it is pure profit going straight to the bottom-line. Last year, $SE made $1.6B for the full year, so $1.2B would be a sizeable number.

Again, these are very rough predictions which I believe to be very conservative. For instance, Amazon Prime crossed 250M members in 2025, on an active user base of about 650M people. This equates to a conversion rate of ~38%. With the similar leverage in logistics, and a rising middle class, this is an aspirational target that should be very achievable.

Long-term investors should be happy that management is playing the long game here. A sticky base of members will generate 2-3x the number of transactions of an average user.

The stability of membership fees and certainty of spend is also likely to lead to higher multiples in the very long term.