Sea suspends 2022 eCommerce forecast as group records SG$1.28bn net loss in Q2

Sea suspends 2022 eCommerce forecast as group records SG$1.28bn net loss in Q2

share on

Sea Group has recorded a total net loss of SG$1.28 billion in the second quarter of the financial year, more than two times than that of second quarter of the previous year, which stands at SG$599.5 million.

Additionally, it will also be suspending its eCommerce forecast for 2022 as part of its efforts to adapt to increasing macro uncertainties, and as it “proactively shifts its strategies to focus on efficiency and optimisation for the long-term strength and profitability” of the eCommerce business. 

Sea Group currently offers three services, comprising eCommerce platform Shopee, digital entertainment platform Garena, and digital financial service SeaMoney.

Its gross profit margin for eCommerce has continued to improve sequentially quarter-on-quarter, said the company.

Sea Group has seen faster growth of transaction-based fees and advertising income, which have higher profit margins compared to product revenue and revenue generated from other value-added services.

However, its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) has increased to SG$895.8 million compared to SG$801.4 million for the second quarter of 2021. Its Adjusted EBITDA loss per order improved by 21% to reach SG$0.46 in the second quarter of 2022, compared to SG$0.57 for the same period in 2021. Its headquarters’ common expenses was sequentially increased by US$27.5 million quarter-on-quarter, attributed to an increase in research and development staff and server hosting cost, as Sea Group expanded its technological capabilities and service offerings.

According to Sea Group, in Southeast Asia overall, and in Indonesia and Taiwan respectively, Shopee continued to rank first in the Shopping category by average monthly active users and total time spent in app for the second quarter of 2022. Shopee is also leading the shopping category in Brazil by average monthly active users, while maintaining its top ranking by total time spent in app.

On the digital financial service front, its quarterly active users across SeaMoney products and services recorded a 53.3% year-on-year increase, said the company. SeaMoney offerings were also rolled out across more markets, and Sea Group has expanded synergies between Shopee and SeaMoney.

According to SeaGroup, up to 40% of the quarterly active buyers on Shopee in Southeast Asia have used SeaMoney products or services in the second quarter of 2022.

Meanwhile, for Garena, its adjusted EBITDA was SG$461.14 million, compared to SG$1.02 billion for the second quarter of 2021. Its self-developed global game, Free Fire, maintained top global rankings in user and grossing metrics and was the most downloaded mobile game globally in the second quarter of 2022. It was third highest by average monthly active users on Google Play in the same quarter, according to Sea Group. 

Additionally, its total sales and marketing expenses increased by 5.7% to SG$1.38 billion in the second quarter of 2022 from SG$1.24 billion in the second quarter of 2021. It increased its sales and marketing spend on the digital entertainment front the most, by 6.2%, followed by eCommerce by 3.2%. It decreased its sales and marketing spend on digital financial services by 2.3%. 

In March, Sea Group withdrew its eCommerce operation, Shopee, in India, months after its launch in the market last October. The move came after India banned Free Fire. “In view of global market uncertainties, we have decided to close our early-stage Shopee India initiative," Shopee's spokesperson said. Following the ban, Sea's market value dropped by US$16 billion (SG$21.7 billion). 

Just recently, Shopee was also reportedly layed off employees across several markets including Indonesia, Thailand, and Vietnam. MARKETING-INTERACTIVE understood that there will be job cuts at ShopeePay and ShopeeFood.


Related articles:
Sea Group shuts down Shopee operations in India
Shopee said to make regional job cuts

share on

Follow us on our Telegram channel for the latest updates in the marketing and advertising scene.
Follow

Free newsletter

Get the daily lowdown on Asia's top marketing stories.

We break down the big and messy topics of the day so you're updated on the most important developments in Asia's marketing development – for free.

subscribe now open in new window