After defying the odds to become the top e-commerce company in Southeast Asia in 2020, Sea Limited (SE -0.60%) is making 2021 the year it branches out beyond its home markets in a big way. Though the COVID-19 pandemic was a boon for e-commerce companies worldwide, it likely slowed Sea's ability to hire new teams in new countries.

Yet as the calendar turned to 2021, Sea is now aggressively rolling out its Shopee-branded e-commerce platform to more and more countries as the year rolls on, with an eye on developing markets where e-commerce is relatively underpenetrated and its mobile video game Free Fire is a hit.

Though Sea had initially set foot in Brazil in 2019, 2021 has brought its international reach to another level. Shopee entered Mexico in February, followed by Chile and Colombia in June. Just last week, Shopee announced it was hiring and looking for sellers in the massive Indian market. Sea's stock has been rising this year, as each new market represents another revenue and profit opportunity.

Shopee shows no signs of slowing down. This week, the company made landfall in a brand new continent, while sources also say it may soon strike at the home turf of rival MercadoLibre (MELI 1.65%).

A globe in a shopping cart.

Image source: Getty Images.

Shopee makes landfall in Europe with an underpenetrated opportunity in Poland

On Tuesday, Reuters reported that Shopee is preparing to launch in Poland, which would mark its first foray into Europe.

Some may wonder why Shopee is starting with Poland in Europe. Part of the reason the company was able to overtake established rivals in Southeast Asia in terms of market share was because those markets themselves were vastly underpenetrated, leaving room for a new entrant to grab up new e-commerce adopters. So the choice of Poland may have to do with the country having just 14% e-commerce penetration in 2020 -- a number that fell to 9.5% in the first quarter, as stores reopened following the distribution of vaccines. That penetration is lower than the European average.

Meanwhile, Poland's size, while perhaps small compared with Europe as a whole, could be somewhat significant for Sea Limited. The country's 2020 gross domestic product (GDP) was nearly $600 billion. Meanwhile, Sea's established and newer markets of Southeast Asia, Latin America, and India combined for around $10.4 trillion in GDP last year, so adding Poland would increase Sea's total addressable market by around 5.8%.

Apparently, (AMZN -0.34%) agrees there's opportunity in the country, as the U.S. e-commerce leader set up its own local e-commerce site there in March. It'll be interesting to see Sea and Amazon, two of the most aggressive companies on earth, square off in Poland and likely India, as well.

Young woman holds up a tablet and credit card while reclining on a couch.

Sea Limited is making its first foray into Europe. Image source: Getty Images.

Sources say Argentina, MercadoLibre's home market, could be next

In that same Reuters report, two sources familiar with Sea also said the company plans to launch Shopee in Argentina in the coming months. Shopee made landfall in Latin America with the 2019 entry into Brazil, which is MercadoLibre's largest market, so the competitive confrontation isn't entirely new. However, Argentina is MercadoLibre's original home market and home to its headquarters.

It may seem striking that Shopee will challenge MercadoLibre's supremacy. Of the countries it's in, MercadoLibre grew the fastest in Argentina last year and this year, and its Mercados Envios logistics service penetration is also the highest in Argentina.

Is there room for Shopee? Likely yes. During 2020, Argentina saw the fastest e-commerce growth of any other country, according to eMarketer, which also forecasts that Latin America will have the fastest growth in digital buyers in 2021. E-commerce penetration of total retail sales was only in the low single digits in Argentina prior to the pandemic, so there's likely a long way to go for the Argentinian market if it grows toward the world average of 18%.

2021 will be Sea's toughest challenge yet

In any case, if 2020 marked the rise of Sea's dominance in Southeast Asia, 2021 will be the year it started a fierce competition with both Amazon and MercadoLibre across the globe, sometimes in otherwise "neutral" terrain.

It should be interesting to watch these global all-stars slug it out in the years ahead, as more and more of retail sales go digital. Yet it's also possible a rising tide will lift all boats and that all three stocks will do well amid their continued global expansion.