Sea, an e-commerce and gaming firm announced on Monday that it will be withdrawing from the retail market of India just mere months after it had started operations there with Shopee. In Sea’s overseas drive for expansion, this comes as the second pullback as the firm is making huge losses and the scope for growth appears weak. This comes on the heels of India banning ‘Free Fire’, a highly popular gaming app from Sea.
In just a day after the ban, the market value of Sea dropped a whopping $16 billion, which led to some investors cutting their holdings in Sea, which has its headquarters in Singapore. In a statement, Shopee said that market uncertainties across the globe forced it to withdraw, and it would make the withdrawal process as easy as possible.
Earlier this month, Sea had said that its revenue growth from e-commerce would halve to 76% in 2022, from the high 157% last year. This is so because there are fewer purchases online as countries reel from the aftermath of Covid-19. In January, Tencent had announced that it would sell 14.5 million shares in Sea, after which Sea shares dropped by 11%.
Shopee started its India operations in October 2021 as a part of an international aggressive push seeing it expand into Europe as well. The market cap of Sea was $200 billion then, and since that time it dropped to $64.76 billion in the month of March 2022.
Shopee India, the local arm of Sea, had recruited sellers locally and also launched a website and app, at a time when the fast-growing e-Commerce market in India was dominated by giants like Flipkart and Amazon.com. The company maintains that the pullout was not influenced by regulatory factors.
Image source: DY LEE, UX Planet