Sea's delicate balancing act
$Sea(SE.US$
Sea generated 59% of its revenue last quarter from its e-commerce division. This segment houses Shopee, the leading online marketplace in Southeast Asia and Taiwan. Shopee conquered both markets by undercutting its competitors with loss-leading promotions and subsidies.
Sea generated 59% of its revenue last quarter from its e-commerce division. This segment houses Shopee, the leading online marketplace in Southeast Asia and Taiwan. Shopee conquered both markets by undercutting its competitors with loss-leading promotions and subsidies.
Another 31% of Sea's quarterly revenue came from its gaming unit Garena. Free Fire initially generated a stream of higher-margin revenue for Garena that partly offset Shopee's losses.
The remaining 10% of Sea's revenue came from its nascent fintech business, which includes its SeaMoney payments platform and other financial services. Like Shopee, this growing segment remains deeply unprofitable.
Simply put, Sea has been balancing several unprofitable businesses on top of a single mobile game. Management likely believed it could maintain that balancing act for at least a few more years as economies of scale kicked in at Shopee and Garena diversified its portfolio with new games.![]()
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It also expected that shaky scaffolding to support Shopee's expansion into other crowded e-commerce markets like India and Latin America.
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R and R : Many people just focus on shopee, but actually the most exciting business for SEA is seamoney. Seamoney has 4 digitalbank license and 1 of them is already in operation and making a profit. It won't be long till seamoney start having positive cash flow.
yokimOP R and R:
