Sea Ltd., which is owned by billionaire Forrest Li, continued to lose money in the first quarter as losses at its e-commerce platform Shopee deepened and expenses increased.
The e-commerce and gaming behemoth from Singapore announced on Tuesday that its first-quarter net loss increased to $580 million from $422 million. While overall revenue increased by 64% to $2.9 billion, operational expenses increased by 68 percent to $1.7 billion, owing primarily to greater marketing and research and development spending, according to the business.
Sea is consolidating its e-commerce activities after an aggressive global expansion effort in recent years, which has resulted in growing losses. Sea left India and France in March to concentrate on important markets in Brazil, Southeast Asia, and Taiwan. While e-commerce revenue surged by 64% to $1.5 billion year over year, Shopee’s operational losses increased by 77% to $810.6 million.
“We effectively negotiated the tremendous uncertainties brought on by the epidemic over the past two years to capture the significant growth potential provided to us across all companies,” Li said in a statement. “As we approach a new phase, we know that current macro trends and uncertainties may have an immediate or medium-term impact on our region and the world.”
Consumers returning to work after pandemic lockdowns in the last two years are starting to cut back on internet purchases as the Russian invasion of Ukraine, rising interest rates, and skyrocketing commodity prices impair the global economic picture.
While income from digital entertainment—most Sea’s profitable business—grew 45 percent to $1.1 billion in the first quarter, bookings fell 26 percent to $800 million. After India banned its main mobile game Free Fire in February, active users of its gaming platform fell 5% to 615.9 million.
The prohibition in India, combined with Tencent’s decision to reduce its ownership in the company, caused a selloff in Sea’s stock, which has fallen over 80% from its all-time high of $366.99 per share in October. Since its launch on the New York Company Exchange in 2017, the stock has risen in value, with gains accelerated during the pandemic, when demand for Sea’s online gaming, e-commerce, and payments businesses rose until Tencent began selling Sea shares.
The decline in Sea’s stock price has dragged down the fortunes of the company’s three cofounders, with Sea chairman Li’s real-time net worth falling to $4.6 billion this week from $15.9 billion when the list of Singapore’s 50 Richest was published in August. Sea was founded by Li, Gang Ye, and David Chen in 2009, the same year the three launched Garena, an online gaming platform. The partners are naturalised Singapore residents who are originally from mainland China.
The decline in Sea’s stock price has dragged down the fortunes of the company’s three cofounders, with Sea chairman Li’s real-time net worth falling to $4.6 billion this week from $15.9 billion when the list of Singapore’s 50 Richest was published in August. Sea was founded by Li, Gang Ye, and David Chen in 2009, the same year the three launched Garena, an online gaming platform. The partners are naturalised Singapore residents who are originally from mainland China.
