Shopee, the ecommerce arm of Southeast Asian tech giant Sea Group, has come under fire in India within months of rolling out in the country.
Photo credit: Shopee
In a letter to Nirmala Sitharaman, the country’s finance minister, the Confederation of All India Traders (CAIT) alleged that Shopee has Chinese roots, which violates foreign direct investment (FDI) rules.
India unveiled new FDI rules last year that made government approval mandatory for foreign investments from countries that share a land border with India.
“CAIT is seeking a ban on Shopee to protect the interests of small traders and retailers in India,” Praveen Khandelwal, CAIT’s national secretary general, told Tech in Asia.
According to the trade association, Shopee has masked its origins and commenced operations in India through SPPIN India Private Limited, an entity of Singapore-registered SPPIN I Private Limited and SPPIN II Private Limited. In turn, these two holding firms are held by SPPIN Limited, which is registered in the Cayman Islands, said CAIT in its statement.
Photo credit: Shopee
“This complex structuring of entities is nothing but an attempt to hoodwink the Indian government and infuse Chinese funds into India,” stressed Khandelwal.
CAIT also claims that Shopee is controlled and operated by Tencent and Forrest Li, the Chinese-born chairman and group CEO of Sea.
“Shopee is a Singaporean company committed to helping Indian small businesses thrive through our online ecommerce marketplace,” the company said in a statement to Tech in Asia. “We aim to [be a] partner in India’s digital economy mission while contributing to the Aatmanirbhar Bharat Abhiyan.”
Tencent currently holds a 20% minority stake in Sea – Shopee’s parent firm – and is a investor in top Indian companies such as Flipkart, Byju’s, Swiggy, Udaan, and Ola.
Amid rising border tensions with China last year, India had banned over 200 Chinese apps including TikTok, Shein, PUBG, WeChat, and Alipay. The government barred the apps “for engaging in activities which are prejudicial to sovereignty and integrity of India, defence of India, security of state, and public order.”
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