Update: Shortly after MARKETING-INTERACTIVE reached out to Shopee for comment on regional job cuts, it was reported that Shopee is pulling out from Spain, according to multiple media reports including The Straits Times, Channel NewsAsia, and The Business Times. Shopee first announced its expansion into the market last October. At the same time, it is also cutting some roles from ShopeeFood and ShopeePay, and laying off part of its teams in Mexico, Chile, and Argentina. Its cross-border team supporting the Spanish market will also be laid off, media reports said.
Citing Shopee CEO Chris Feng, media reports said it is carrying out adjustments to "optimise [the company's] operations in certain segments and markets". Due to the elevated uncertainty in the broader economy, Feng said the company believes it is "prudent to make certain difficult but important adjustments" to boost its operational efficiency and focus its resources, media reports said. Nonetheless, Feng said its operations in Shopee Mexico, Argentina, and Chile, as well as ShopeeFood and ShopeePay in Southeast Asia will continue operating as per usual.
Shopee is laying off employees across several markets including Indonesia, Thailand, and Vietnam, MARKETING-INTERACTIVE understands. It is also understood that there will be job cuts at ShopeePay and ShopeeFood. A check by MARKETING-INTERACTIVE found that there are currently 48,095 Shopee employees on LinkedIn and most of them are based in Indonesia followed by Singapore and the Philippines. MARKETING-INTERACTIVE has reached out to Shopee for comment.
This news comes a few months after Shopee withdrew from India after launching last October. While its operations in India officially ceased on 29 March, the platform previously said that it will continue to handle orders placed before then and support local merchants during the transition.
The withdrawal followed India's decision to ban popular gaming app Free Fire, which is developed by Garena and is Shopee's sister company under Sea Group, due to security concerns. According to Reuters, India believed that user data was being sent to app servers in China, therefore allowing the data to be "mined, collated, analysed, and profiled".
Shopee also exited France this year, ceasing operations on 6 March. Shopee told Bloomberg previously that the company decided not to continue its service in the country following a short-term, preliminary pilot. The eCommerce firm added that it will continue to adopt an “open-minded and disciplined approach to exploring new markets". Sea's eCommerce arm is currently testing the waters in Europe, growing its presence in Spain and announcing expansion plans into Poland.
Shopee posted US$1.6 billion in generally accepted accounting principles (GAAP) revenue for 2021, up 89.4% year-on-year. Gross orders totalled 2.0 billion, an increase of 90.1% year-on-year and gross merchandise value was US$18.2 billion, an increase of 52.7% year-on-year.
According to Sea in March, the company said Shopee is currently on tract to achieve positive adjusted EBITDA before allocation of the headquarters' common expenses in Southeast Asia and Taiwan by 2022. For Shopee overall, adjusted EBITDA loss per order was US$0.45, compared to US$0.41 for the fourth quarter of 2020. This increase was attributable to the increasing contribution from the other markets which are at a much earlier stage of development, and therefore are both growing faster and incurring higher adjusted EBITDA loss per order than Southeast Asia and Taiwan. Meanwhile, Sea's total GAAP revenue as US$3.2 billion, up 105.7% year-on-year and its total gross profit was US$1.3 billion, up 145.6% year-on-year.
Separately, Shopee has been very aggressive with its marketing, working with local ambassadors to engage consumers and draw them to its platform during shopping festivals. In January, it added a new mega shopping event on 15 March and upgraded its suite of shopper engagement features to deliver more immersive, personalised, and entertaining experiences that aim to contribute to deeper brand affinity and loyalty. It also expanded its suite of marketing solutions and tools to optimise marketing impact and returns for businesses. Its PR efforts have also paid off resulting in the team winning Overall Brand Champion at MARKETING-INTERACTIVE's PR Awards 2022.
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