Shopee amps up livestreaming as Sea eyes another profitable year in 2024

Shopee amps up livestreaming as Sea eyes another profitable year in 2024

Lentera Berita, 06/03/2024

Singapore,-

After hitting its first profitable year in 2023, Sea Group expects to be in the black for 2024, and it’s looking at Shopee to drive it.

Overall, Sea expects its ecommerce arm to grow in the high teens for the full 2024 year, chairman and group CEO Forrest Li said in the company’s latest earnings call. But Indonesia, where Shopee is the “clear market leader,” had particularly good numbers in Q4 2023.

“Compared to a year ago, we gained sizable market shares,” Li added. “We are going to execute even better over this year, given the foundations we built during the last year,” especially on aspects like service quality and price competitiveness, he added.

A major growth driver for Shopee in Southeast Asia’s largest market has been livestreaming. While it accounted for roughly 15% of total Shopee orders in the region in December 2023, the percentage is even bigger in Indonesia.

Meanwhile, Shopee has been improving the unit economics for livestreaming over the past few months, Li said. The feature’s retention and repurchase rates have been trending up, while attracting new users, though it’s still not as high as the rest of its regular ecommerce transactions.

“This also enables us to compete effectively with our competitors,” he explained. “If you look at a year ago, we probably don’t have this ecosystem. We have to invest to build this ecosystem.”

Answering a question about Shopee’s battle for market dominance with TikTok Shop, Li conceded that Sea’s platform has benefited from Indonesia’s ban on its rival. However, he believes it’s not the sole reason for Shopee’s Q4 success.

“We’ve seen similar growth trend continued in Q1 as well, even as the landscape has changed,” he said, noting Shopee’s scale, local leadership and operating teams, and time-tested infrastructure as some of its key advantages over its competitors. “All in all, we’re pretty happy with what we see in Q1 so far.”

While much of Sea’s focus is on Shopee, it doesn’t expect digital entertain arm Garena to lag behind. Yanjun Wang, Sea’s group chief corporate officer, said that Garena has been incorporating more AI tech into its development operations to expand its genre portfolio and content scope.

Commenting on Garena’s rocky performance throughout 2023, Wang said this can be attributed to the seasonality of the gaming space, with launches and esports events generating buzz at different periods.

But for its highest-earner Free Fire, Sea is “very positive based on the trends” it has seen so far, said Wang. The company expects double-digit growth for Free Fire year on year in 2024, both in terms of user base and bookings. (VIJ)