As Free Fire returns to India, could Shopee spark a similar comeback?

Photo credit: Shutterstock

Last year, India banned Garena’s battle royale title, Free Fire. Soon after that, the game developer’s sister company, Shopee, shut down its operations in the country. Now, Free Fire is making a comeback, launching a localized version with partner Yotta.

Will Sea Group’s ecommerce platform follow suit?

To be clear, Shopee wasn’t banned by the Indian government. The Singapore-headquartered company was, however, caught in the crosshairs of geopolitical tensions due to its links to China.

But things are changing on that front. Chinese fast fashion brand Shein, for one, is reentering India through a partnership with Reliance Retail.

At the same time, one main reason behind Shopee’s India shutdown was because the market wasn’t a “slam dunk” win.

Is India attractive enough?

Like in its other markets, Shopee’s key selling point in India was its affordability. For instance, a product that costs 200 rupees (US$2.41) was being sold for around 70 to 80 rupees (US$0.84 to US$0.96) on the platform.

As part of its expansion strategy, Shopee also wasn’t charging a single penny in commission. For context, the platform charges 12% to 18% in Brazil. This helped Shopee attract 20,000 sellers in its first few months and become one of the most downloaded apps in India, ranking just below Meesho.

However, it also meant burning through more than US$40 million every month, according to reports.

Ultimately, the decision to withdraw from India was made in an effort to control Sea’s rising expenses. The ecommerce arm was also grappling with fierce competition from TikTok Shop, which recorded a surge in gross merchandise value in Southeast Asia by 4x to US$4.4 billion.

Things appear stable for the company this year, especially after Shopee finally achieved profitability and Sea CEO Forrest Li announced the group’s intention to start reinvesting in its ecommerce arm, including through shipping subsidies.

Tech in Asia has reached out to Sea for further comment. 

Still, that may not be enough to bring Shopee back to India.

Unlike the ecommerce platform, Free Fire has consistently been profitable for Sea, including in India, one of the game’s largest markets. That much is apparent, as the India ban led to a sudden 18% decline in Sea’s stock price.