Shopee parent company: Never reported profit

Net loss for many years

According to Nikkei, Sea Ltd. – the parent company of e-commerce platform Shopee – reported a net loss of $617 million for the fourth quarter of 2021, up from $523 million a year ago.

In 2021, the company achieved a revenue of USD 9.95 billion, more than double that of 2020; while the net loss increased to $2.04 billion, from $1.61 billion. Sea’s e-commerce revenue is expected to total about $9 billion in 2022, up from $5.1 billion in 2021.

Ecommerce was one of Sea’s main growth drivers, but the loss from this segment amounted to $941 million in the fourth quarter. Shopee has grown rapidly amid the pandemic, becoming the most visited e-commerce platform in the 6 countries it operates in.

Sea is the leading e-commerce and digital entertainment provider in Southeast Asia. The company splits into three core internet businesses – digital entertainment, e-commerce, and financial services. The three units are respectively named Garena, Shopee and SeaMoney.

Shopee’s parent company suffers a heavy loss

Sea was founded by Forrest Li, who was born in China but now holds Singaporean citizenship. Sea’s largest shareholder is Tencent Holdings Ltd., China’s social networking “empire”.

Sea went public in 2017 and quickly became the most expensive public company in Southeast Asia. Investors bet on Sea’s growth potential in the fields of games, e-commerce and financial services in foreign markets.

Many difficulties

Forrest Li, president and CEO, said that with many economies reopening in the fourth quarter and into this year, he observed a moderation in online activities and fluctuations in the degree of similarity. user action. This shows that improving profitability remains a key challenge for a fast-growing startup like Sea.

Another difficulty Sea faced in the Indian market. Over the past two years, India has banned hundreds of Chinese apps, including Free Fire, a game by Sea. Investors are worried that India may even ban Shopee, Sea’s second pillar. Shopee currently has about 300 employees and 20,000 sellers in India.

On February 14, Mr. Li reassured shareholders at the annual shareholder meeting that the company had the situation under control, but did not comment on India’s ban on Free Fire.

Li admitted, Free Fire is not available in the Google Play and iOS app stores in India, due to “unforeseen government actions”. Meanwhile, the populous emerging country is already a core market for Sea’s gaming business.

Sea is a rare Southeast Asian technology company listed in the US

The company expects its e-commerce business to “achieve a positive adjusted EBITDA (earnings before interest, taxes, depreciation and amortization),” Li said.

In an interview with Nikkei Asia, Li eased concerns by saying that the company could become profitable at any time by cutting marketing costs.

Yanjun Wang, Sea’s corporate director, admitted during a conference that the company was affected by the slowdown in online activity, as well as by unexpected government actions in India during the project. his newspaper.

“The company lost some of its gains as the pandemic unfolded. The drop also partly reflects the situation in India, where Sea is experiencing some difficulties,” said Sea senior executive Yanjun Wang. stated.

The company also reallocates resources during global expansion. Sea will close its e-commerce operations in France, just five months after its October launch. France was one of the first European markets it entered, along with Poland and Spain.

Sea is trying to consolidate its early success in Brazil, where it started an online shopping business in 2019. However, the company faces competition from e-commerce giant MercadoLibre of Latin America.

Their online shopping arm, Shopee, pulled out of France, a major market it entered just a few months earlier.

In 2021, Shopee was assessed by the Office of the United States Trade Representative (USTR) to have a very high level of counterfeit goods sold on all platforms. Shopee is accused of not having an investigative procedure with a third-party seller.

In addition, the copyright holders said Shopee did not have procedures or tools in place for notice and takedown procedures, anti-counterfeiting tools, and necessary information about the right to support claims. counterfeits on each platform.

Shopee also does not have a tool to prevent these objects from registering another account to continue selling. The platform only locks the seller’s account when they have repeated and escalated violations.

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