Sea Group expects ecommerce revenue to double in 2021, exceeding $4.5b

Sea Group, Singapore’s largest homegrown internet company, expects its ecommerce revenue to double in 2021, as it benefits from the performance of its ecommerce unit Shopee, especially in Indonesia and other markets in Southeast Asia.

The company projects a 112% increase in its ecommerce segment for 2021, reaching between US$4.5 billion and US$4.7 billion. Meanwhile, it sees a 38% jump in bookings for its digital entertainment business this year, bringing in revenue worth US$4.3 billion to US$4.5 billion.

The increase in guidance comes as Sea makes the most out of the Covid-19 pandemic, which accelerated the use of ecommerce in Southeast Asia and boosted the gaming segment.

The regional giant’s revenue doubled in the fourth quarter of 2020 to US$1.57 billion, jumping from US$772.2 million in the previous corresponding period. It has remained profitable on an adjusted EBITDA basis for the third straight quarter.

Sea’s revenue growth almost tripled to US$842.2 million in Q4, driven by Shopee, while its gross merchandise value (GMV) was US$11.9 billion – a year-on-year increase of 112.5%. This upsurge was on the back of demand for online shopping as customers stayed at home during the pandemic.

In Q4, Shopee registered over 430 million orders – or a daily average of around 4.7 million orders – in Indonesia, where the ecommerce player claims to be the biggest platform in the market.

Meanwhile, Sea’s digital entertainment segment bookings skyrocketed to over 100% to hit US$1 billion in the fourth quarter.

The internet company noted that Free Fire was the highest-grossing mobile game in Latin America and in Southeast Asia for Q4 2020, according to App Annie. Sea says that its self-published mobile game has maintained strong growth in the last six consecutive quarters.

However, the firm’s adjusted EBITDA loss widened to US$427.5 million in the fourth quarter, with adjusted EBITDA loss per order decreasing by 41% year-on-year to US$0.41 compared to US$0.70 for the same quarter in 2019.

Sea also spent US$366.9 million in Q4 for investing activities, up from US$143.7 million in the previous year. Its newly formed investment arm Sea Capital will now deploy US$1 billion over the next few years.