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Unit for e-commerce at Sea Shopee will come to an end in its operations in India in 2022.

Unit for e-commerce at Sea Shopee will come to an end in its operations in India in 2022.

Sea Ltd., an e-commerce and gaming company, announced on the 28th of march that it is exiting India’s retail market just months after launching operations there, the second reversal in a foreign expansion drive this month as the loss-making company faces a bleak growth prognosis.

About Shopee

E-commerce IndiaIt is a multinational technology business based in Singapore that specializes in e-commerce. Shopee, which is owned by Sea Ltd, was begun in Singapore in 2015 and has since expanded its reach internationally. With a total of three hundred and forty-three million monthly visitors as of 2021, it is primarily regarded as Southeast Asia’s largest e-commerce platform. The firm also services customers and sellers in various countries across the Americas and Europe who desire to buy and sell things online.

The app-based platform created a website to compete with other e-commerce websites in the region, such as Coupang, Lazada, Tokopedia, and AliExpress. To set itself apart, Shopee provides online purchasing security with its own escrow service, the “Shopee Guarantee,” which defers payment to merchants until purchasers get their products. Shopee debuted in Singapore within the month of February within the year 2015 as a social-first, mobile-centric marketplace where users can explore, shop, and even sell.

 The asset-light platform claims to make online shopping easy and secure for both sellers and buyers by integrating logistical and payment support. Shopee’s new six-story regional headquarters in Singapore Science Park opened on September 3, 2019. The new headquarters, which is six times larger than the old headquarters at Ascent Building, has 244,000 square feet (22,700 m2) of space and can house 3,000 people. WeWork had previously occupied this space in Singapore. Due to Shopee’s rapid growth, the lease was eventually relinquished to them. Shopee intensifies its drive into the digital economy in this way.

In Q4 2017, Shopee surpassed Lelong and became Malaysia’s third most popular e-commerce platform. “On both the Google Play and iOS App Stores, it has surpassed Lazada as the best app. A poll of Indonesian consumers conducted by the Asian parent in December 2017 indicated that “Shopee (73%) is the most popular buying platform among Indonesian mothers, followed by Tokopedia (54%), Lazada (51%), and Instagram (50%).

With the launch of a localized site in Brazil in 2019, Shopee joined the Latin American market. They opened additional businesses in Mexico, Chile, and Colombia. It launched its marketplace in Poland in September 2021. Over the subsequent two months, launches were held in Spain and France. The platform had 200 million downloads as of 2019. In Q2 2019, Shopee’s Gross orders increased by 92.7 per cent to 246.3 million, up from 127.8 million the previous quarter. Their gross merchandise value increased by 72.7 per cent to US$3.8 billion in 2Q19, up from US$2.2 billion the previous quarter. 

Alibaba Logo and the History of the Company | LogoMyWayLazada, an Alibaba-backed competitor, has reacted angrily to these GMV assertions. Max Bittner, the former CEO, claimed that GMV figures might be readily inflated “by subsidy programs, and history demonstrates that GMV declines as unhealthy subsidies are removed. According to iPrice’s 21 2019 e-commerce report, Shopee outperformed its competitors, Lazada and Tokopedia, in terms of monthly active users, total downloads, and website views.

Shopee made a soft entry into the Indian market in November 2021. It processes 100,000 orders per day and has over one million app downloads in India’s Google Play Store. However, five months later, on March 28, 2022, Shopee stated that it would cease operations in India at 12:00 a.m. on March 29, 2022. Shopee’s decision to leave India, with direct knowledge of the company’s thinking, was prompted in part by increased regulatory scrutiny, which saw Sea’s gaming app Free Fire banned as part of crushing on businesses allegedly transmitting data to Chinese servers. Shopee launched in Argentina in January 2022, a country where e-commerce has exploded since the pandemic began.

To provide logistical support for its users, Shopee has partnered with over seventy courier service companies across its regions. For item collection and delivery in Singapore, it partnered with logistics company NinjaVan. Pos Malaysia and Indonesia are the two other regional delivery partners. For delivery of purchased items in India, Shopee has partnered with Delivery and Ecom Express.

Anne Curtis, who is an actress, Jose Mari Chan (singer), television personality Sarah Geronimo, boxer and Senator Manny Pacquiao, television personality Kris Aquino, television host and comedian Willie Revillame who is a television host and vlogger Alex Gonzaga, and television actress Kim Chiu are among Shopee’s local brand ambassadors. After Chan, who was the 11.11-12.12 Christmas Sale endorser in 2018 and the 9.9 Super Shopping Day endorser in 2020, television personality Aquino became the new Shopee endorser for the 11.11 Christmas Sale in 2020. Revillame, who is a television host, and comedian, was selected as Shopee’s new spokesperson for the 3.3-4.4 Mega Shopping Sale in February 2021.

Shopee had planned to invest up to $1 billion in India, according to the source, and the decision would damage Indian logistics companies with whom it had inked lucrative contracts. When approached for comment on the statistic, the business said it was “not factual” and that “the decision regarding Shopee India has nothing to do with regulatory problems.” “We’re still working with Free Fire in India to resolve the issue,” the business added.

As part of its cooperation with YG Group, Shopee named Blackpink as its first-ever regional brand ambassador in 2018. In October of the same year, Bambam of Got7 was named the brand ambassador in Thailand. In 2019, Shopee signed a deal with Cristiano Ronaldo, the world’s most famous footballer, to serve as its regional brand ambassador. The deal was revealed on 9.9 Super Shopping Day, Shopee’s trademark yearly shopping extravaganza.

In Indonesia, it has signed two local brand ambassadors: Didi Kempot, who was a late singer, and Nella Kharisma, a singer who will debut in 2020. In 2018, actress Prilly Latuconsina, actor Maxime Bouttier, singer Via Vallen, and singer Rizky Febian became local brand ambassadors, followed by legendary rock group Slank and singer Syahrini in 2019, and former JKT48 member and head Melody Nurramdhani Laksani for Shopee Barokah and comedian Tukul Arwana in 2020. In 2020, a Korean boy band, Kids(stray), will serve as Shopee Indonesia’s brand ambassador for the 11.11 Big Sale and the 12.12 Birthday Sale.

Foreign corporations have been accused by Indian merchants of circumventing restrictions and offering huge discounts that affect the local company, claims that the companies rejected. In recent months, these traders in India have called for a boycott of Shopee.

Amanda Manopo and Arya Saloka from the mega-hit serial opera Ikatan Cinta (Love Ties) were signed as Shopee’s local brand ambassadors at the beginning of 2021. Joe Taslim, an actor and martial artist, was also signed as a local brand ambassador for Shopee’s 9.9 Super Shopping Day in 2021. Nassar Sungkar, a musician, joined SPayLater’s local promotion at the beginning of 2022. Meanwhile, Shopee signed singer Lesti Kejora and her husband, actor Rizky Billar, as local brand ambassadors for the Shopee 4.4 Sambut Ramadan Sale.

BtoB was named the official ambassador for Shopee’s K-Collection, a Korean brand show in which 50 domestic small and medium-sized businesses participate via Shopee’s Live in June 2021. Shopee Singapore, Shopee Malaysia, Shopee Philippines, and Shopee Vietnam are all online shopping destinations. To actively attract local K-pop fans as customers, the group will offer products directly through ‘Shopee’s Live’ and organize an exclusive online fan meeting. Marian Rivera, a Kapuso actress and host, were chosen as the brand’s spokesperson for the 3.3-3.15 Consumer Day Sale in March 2022.

After Shopee Philippines was accused of defrauding Filipino fans of South Korean girl group Blackpink, the hashtag #ShopeeScam trended internationally on Twitter in June 2019. For the 568 Top Spenders in Shopee Philippines’ online store, a promotion was launched that included passes to a Meet and Greet event. On the other hand, several fans claimed to have received alerts that they had won tickets, only for Shopee to retract them later. Others shared screenshots of Shopee’s contest mechanics changing the day of the event.

Apart from the pressure on Sea Group due to the prohibition of Garena Free Fire, Shopee had a number of challenges throughout its time in India. A complainant filed an FIR against the company in Lucknow earlier this year, stating that duplicate products were being sent through the platform. In addition, the Competition Commission of India has filed a complaint against Shopee for engaging in “deep discounting.” The complaint was dismissed by the antitrust body earlier this month.

Know before you go: the PhilippinesShopee, a social commerce network that began in India less than six months ago, is leaving the nation due to “global market uncertainty.” Shortly after its launch, the platform, which is owned by Singapore-based consumer internet giant Sea Group, became one of the most downloaded apps on the Android Play Store. The departure also comes a little over a month after the Indian government banned the Sea Group-owned gaming software Garena Free Fire. “We have chosen to discontinue our early-stage Shopee India venture due to global market uncertainty,” a Shopee representative stated.

Foreign corporations have been accused by Indian merchants of circumventing restrictions and offering huge discounts that affect the local company, claims that the companies rejected. In recent months, these traders in India have called for a boycott of Shopee.
According to Reuters, Singapore authorities expressed concern to India over the restriction in February, citing sources, and asked why Sea had been singled out.

Sea Group, which is Shopee’s parent business, filed for a dollar1 billion initial public offering (IPO) on the NY stock market (NYSE) in October 2017. Tencent is the biggest winner from the Sea listing, with a 20% stake, followed by Blue Dolphins Venture, founded by founder Forrest Li, with a 15% stake. Li owns 20% of the company, while Gang Ye, the Chief Technology Officer, owns 10%.

In India, e-commerce firms face a strong or strict regulatory environment. For years, New Delhi has implemented limitations to safeguard tiny brick-and-mortar businesses.

Google infusing $50 million in Facebook-backed Indian platform MeeshoAccording to one of the sources stated above, Shopee has sent an email to its platform vendors alerting them that the company is ceasing operations in India. “Till 30 May, all Shopee Seller Centre services, including payment withdrawal and return dispute resolution, will be available through existing channels,” the source said, adding that the platform’s logistics partners will still devour and deliver all ongoing orders, also as the process return deliveries.

In the market targeting cheaper goods ordered in bulk for reselling, Shopee was developing as a major competitor to social commerce platforms like Softbank-backed Meesho and Flipkart Group’s Shopsy. Sea announced earlier this month that revenue growth in its e-commerce division would slow to roughly 76 per cent this year from a blazing 157 per cent in 2021, owing to lesser online transactions and engagements as more countries recover from the pandemic.

Shopee also encountered criticism from a group of local traders led by the Confederation of All India Traders (CAIT), who demanded that the platform be banned and wrote to Finance Minister Nirmala Sitharaman, stating that the company had violated India’s FDI guidelines.
Shopee’s decision to leave India, according to one source with direct knowledge of the company’s thinking, was prompted in part by increased regulatory scrutiny, which saw Sea’s gaming app, i.e.Free Fire banned a part of a crackdown on businesses allegedly transmitting data to Chinese servers.

According to Alicia Yap, there is no clear indication that the decision to leave India was influenced by government pressure or other operational decisions. Sea’s decision on its Indian business was initially reported by Reuters.

Shopee’s India operations began in October this year as part of an aggressive international expansion strategy that included the company’s expansion into Europe. It had a market capitalization of up to $200 billion at the time, and in March 2022, it had reduced to $64.76 billion.

All of those e-commerce companies are under significant pressure to a minimum of reach as soon as possible thanks to a drastic shift in market attitude towards growth stocks,” said LightStream Research equities analyst Oshadhi Kumarasiri, who publishes on the Smartkarma platform. In afternoon trading, Sea’s shares on the New York Stock Exchange declined 3.2 per cent to $112.35. Tencent (0700 HK), a Chinese tech powerhouse, said in January that it would sell 14.5 million shares in the firm, causing the stock to plunge by 11%.

Edited by Prakriti Arora

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