Shopee parent Sea to scale up digital financial services as revenues double

Singaporean technology group Sea – parent of e-commerce marketplace Shopee – more than doubled its revenues in 2021 thanks to growth in e-commerce and entertainment.

Chairman Forrest Li said today the firm would now scale up its fintech offerings in Southeast Asia.

“Digital financial services in our region are at early stages and we expect use cases to grow,” the executive told an investor call.

Sea, which claimed US$3.4 billion in payments for its mobile wallet for the first quarter of 2021, won a digital banking license in Singapore in December and purchased last year Indonesian lender Bank BKE ( Bank Kesejahteraan Ekonomi) to turn into a digital bank.

The New York-listed firm announced on Tuesday it had booked revenue of $1.8 billion for the first quarter of 2021, up 147 percent year on year.

Its net loss widened from $281 million to $422 million as the company more than doubled sales and marketing expenses.

Sea’s e-commerce arm Shopee brought in $922 million in revenue, up 250 percent year on year, while its gaming arm Garena raked in $781 million in revenue, up 111 percent.

Li told reporters that Shopee was seeing growth in Brazil due to a nascent regional expansion. Reuters reported earlier in 2021 that the firm was launching in Mexico and was eying a possible wider expansion in Latin America.

Analysts said they believe the jump in marketing costs was also due to Shopee’s launch of a food delivery arm segment in Indonesia this year, where it now competes with ride-hailers Grab and Gojek.

The group has seen meteoric growth on the stock markets during the coronavirus pandemic as shoppers turned to the internet, with its market cap now at $113 billion.

But it is expected to face increased competition in Southeast Asia.

Indonesian ride-hailing and payments firm Gojek and e-commerce leader Tokopedia announced on Monday they are merging to create a multi-billion dollar tech company called GoTo in the country’s largest-ever deal.