TikTok goes the clock on Shopee’s e-commerce crown

SEA posted another profitable quarter in its latest earnings, yet its share price fell by almost 30 per cent. Why are investors worried? As Benjamin Cher notes, Sea had missed analysts’ revenue forecasts, and its e-commerce unit Shopee logged its slowest growth in years. 

But there could be another big reason: Sea’s chief Forrest Li said the company will be investing more in e-commerce growth, particularly in Indonesia, and that these investments “may result in losses”. Sea may have to compromise profitability in the near-term to keep its e-commerce game strong.

The move perhaps reflects how Shopee has to defend its turf against the rise of TikTok’s in-app shopping platform, TikTok Shop. An industry report noted that TikTok Shop is gaining traction across South-east Asia, particularly in Indonesia, where the platform has captured 5 per cent of the country’s US$51.9 billion gross merchandise value.