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To say things are in flux in the tech world is an understatement.
On one hand, we’re tracking an almost unceasing wave of mass layoffs and documenting stories of historic downfalls (read: FTX). On the other hand, headlines of international expansions and notable fundraises continue to pour in (more on this later).
Life sure seems to be a study in contrasts at this moment in time, but for Sea Group, these contrasts are much closer to home. Here’s why: Garena’s fortunes have significantly changed in the span of one year. Its bookings were at an all-time high in Q3 2021, but these have now nearly halved in value. Shopee, meanwhile, is proving to be the ace of spades despite exiting some markets and job cuts.
Today we look at:
- Shopee seems to have steadied the ship – for now
- ComfortDelGro’s new partnership with Gojek
- Other newsy highlights such as PayMongo CEO stepping down and fiat-to-crypto platform XanPool’s fundraise hitting US$41 million this year.
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A tough climb
Image credit: Timmy Loen
Shopee posted a 51% growth in service revenue in the third quarter this year compared to the same period in 2021. With its improved gross profit margin and decline in sales and marketing expenses, the ecommerce marketplace seems to be inching closer to profitability. CEO Forrest Li elaborated on this in a recent earnings call, adding that Shopee is working toward adjusted EBITDA breakeven by the end of 2023.
- Sea’s current standing: The company says it has achieved a positive contribution margin in most of its Asian markets, including Indonesia. Its operations in Malaysia and Taiwan have taken it a step further by achieving positive adjusted EBITDA for the quarter. Together, the company’s Asian markets accounted for US$217 million in adjusted EBITDA loss.
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But…: A major part of this appears to be from a scaling back of marketing expenses, “especially around shipping subsidies,” according to Li. These subsidies have been a significant contributor to Shopee’s growth all these years.
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But, again: Owing to its mass base of active users, Shopee may afford to scale back on marketing without losing ground to its competitors. That said, the platform will continue to be on its toes thanks to a reinvigorated Lazada and even ByteDance’s TikTok, and logistics could make or break its plans.
Read more: Shopee rights the ship – for now
When getting a taxi is akin to winning the lottery
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