Sea e-commerce unit Shopee to shut India operations

  • E-commerce and gaming firm Sea Ltd (SE.N) said on Monday it is withdrawing from India’s retail market just months after starting operations there, the second pullback this month in an overseas expansion drive, as the loss-making firm faces a weak growth outlook.
  • The withdrawal, effective beginning 29 Mar 22, comes weeks after its e-commerce arm Shopee said it was pulling out of France and after India banned Sea’s popular gaming app “Free Fire”.
  • After the ban, the market value of New York-listed Sea dropped by USD16bn in a single day, leading some investors to cut holdings in the Singapore-headquartered company.
  • Shopee said in a statement its withdrawal came “in view of global market uncertainties” and that the company would make “the process as smooth as possible”.
  • Sea earlier said revenue growth of its e-commerce business was expected to halve to around 76% in 2022 from a blistering 157% in 2021, amid fewer online purchases and engagements as more countries emerge from the pandemic.
  • Shopee’s India business began in Oct 21 as part of an aggressive international push that saw it expand into Europe. Sea’s market cap at the time was as much as USD200bn. It has since dropped to USD64.76bn in Mar 22.
  • The local unit, Shopee India, recruited local sellers and launched a shopping website and app. India’s fast-growing e-commerce market was already dominated by such players as Inc and Walmart’s Flipkart.
  • One person with direct knowledge of the company’s thinking said Shopee’s decision to exit from India was sparked in part by stricter regulatory scrutiny that saw Sea’s gaming app Free Fire banned as part of a crackdown on companies allegedly sending data to servers in China.

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