According to reports, Shopee, the e-commerce division of Southeast Asian Internet giant Sea, has informed employees that it will close its local operations in Chile, Colombia, and Mexico, and completely withdraw from the Argentine market. After closing local operations in Chile, Colombia, and Mexico, Sea will maintain cross-border operations in those three markets, but will cut most of its team, with dozens of employees affected, three people familiar with the matter said. In contrast, the Brazilian market will not be affected, as Shopee has become the dominant service provider there.
Shopee Chief Executive Officer (CEO) Chris Feng said in an email to employees, that given the heightened uncertainty in the current macro situation, we need to focus our resources on our core business. The company has decided to focus only on cross-border business in the Mexican, Colombian and Chilean markets.
Subsequently, Shopee confirmed to the media that it will operate cross-border operations in Chile, Colombia, and Mexico, and completely shut down its Argentina operations. Sea’s market value soared to more than $200 billion in October last year as its gaming and e-commerce divisions gained popularity during the pandemic. But the company's share price has plummeted since then, and its market value is now only about $27 billion. Sea’s leadership has given internal instructions to Shopee managers to make Shopee profitable in its key Southeast Asian markets by 2023, people familiar with the matter said.
Ke Yan, principal analyst at DZT Research, a Singapore-based research firm said, Shopee has been around for 7-8 years, and now they have to focus on trying to be profitable in their core market.
In fact, Shopee also announced in March that it would shut down operations in India and France. In June, Shopee also cut jobs at its e-commerce and food delivery divisions, including operations in Southeast Asia and Latin America. Shopee has also cut dozens of jobs in the past two weeks. Sea reported second-quarter 2022 earnings last month, with total revenue of $2.9 billion, up 29% year over year. The net loss was $931.2 million, compared with a net loss of $433.7 million a year earlier. Non-GAAP net loss was $569.8 million, compared with a net loss of $321.2 million a year earlier.