Singapore based e-commerce and gaming enterprise SEA Ltd, announced on 28th March that they will be shutting down their operations India just a few months after entering the Indian economy.
This is the second time the company is exiting an international market previously abandoning their French operations. Their withdrawal “Free Fire”. The game currently has over half a billion downloads making it one of the most popular battle royale games out in the market along with PUBG and Fortnite.
After India’s ban on the game, the valuation of the company plunged by $16 billion USD on the New York stock exchange, making it one of the biggest falls from grace the world has seen in recent years.
According to Shopee’s official statement, their decision to leave the countries is due to certain global uncertainties and that the company will make the transition as smooth as possible for all parties involved.
SEA Ltd also said that their growth for the year will be half than that of the previous year. Last year, the company grew by 157% while this year it is expected to slump down to 76%. Most e-commerce business has had reduced growths this year but that can easily be correlated to the fact that the pandemic is slowly fading away and the entire world is phasing back into the real world.
The share price of SEA Ltd fell down to $112.35 USD recently.
Shopee entered the Indian Market in October 2021, in an aggressive manner and ended up entering the European market too by the end of the year. At the time, the company had a cap of $200 billion, but that number has slumped down to under $65 million USD.
Even with a massive budget, they unfortunately could not penetrate the Indian market at all. With already established e-commerce direct to consumers in the Indian economy such as Amazon, Flipkart, and Snapdeal. Reaching the summit of an industry in the Indian economy is a tall order even for a company with massive budgets and established markets in South East Asia.
Apparently, the Indian government’s decision to bad the game “Free Fire” from the country was due to the fact that SEA ltd were allegedly sending data that the game collected to the Chinese government.
SEA assured the government that none of that was going on but the decision was not reversed. Shopee was planning to invest a billion dollars into their operations in India which would’ve employed many Indians but it seems like it’s now not going to happen.