AsiaShopee, a Singapore-headquartered e-commerce platform, and one of Southeast Asia’s answers to Amazon is laying off employees and closing certain operations in four countries of Latin America amid the losses.
Shopee reported a loss of $931.2 million in the second quarter of 2022, widening significantly compared to 2021.
Shopee’s decision to close operations in four countries is a significant development in the e-Commerce landscape in Southeast Asia. This move will undoubtedly have an impact on the other players in the region, and it will be interesting to see how they respond. Shopee is one of the leading e-commerce platforms in Southeast Asia, and its decision to close operations in four countries is a major development in the regional e-commerce landscape. The move will no doubt have an impact on other players in the market, and it will be interesting to see how they respond. The company has said that the decision was made due to “competitive pressures” and that it is “refocusing its resources” on its core markets of Singapore, Malaysia, Thailand, Indonesia, and Vietnam. This move comes as a surprise, as Shopee had been expanding rapidly in recent years and had even entered into new markets such as the Philippines and Taiwan. It is not yet clear what will happen to Shopee’s employees in the affected countries, but there will likely be some layoffs. This is a significant blow to the company, which has been a major employer in the region. It is also likely to have a ripple effect on the broader economy, as many of those who are laid off will struggle to find new jobs. This is a disappointing development for those who have been working for the company, but it is unfortunately a reality of the business world. Shopee’s decision to close operations in four countries is a significant development in the e-commerce landscape in Southeast Asia. This move will undoubtedly have an impact on the other players in the region, and it will be interesting to see how they respond.
The company will cease its operations in Thailand, Taiwan, Malaysia, and Vietnam by the end of October this year. In a press release on Wednesday (3 October), the company said that the “decision was not an easy one” and there were “a number of factors” that led to their decision. One of these factors could be increased competition from Amazon, which is aggressively expanding its footprint in this region with new investments in India and Indonesia. It’s worth noting that Shopee has been scaling back its international activities recently. Last year they announced that they would cease operations in Indonesia and India after their acquisitions failed to produce the desired results. This comes at a time when many companies are looking for new growth opportunities outside their home markets due to the economic slowdown caused by US-China trade tensions.
Other e-commerce platforms will now have an opportunity to fill that void, and we can expect to see increased competition among them. This development is also likely to have an impact on Amazon, which has been making inroads into Southeast Asia in recent years. With Shopee out of the picture, Amazon will now have a clearer path to becoming the dominant e-commerce player in the region.
Details about Shopee
Shopee was launched in seven Southeast Asia markets in 2015 and now operates in 13 countries across Southeast Asia, Latin America, and Europe, including Brazil, Poland, and China. Among its main competitors are Alibaba-backed e-commerce companies Lazada group, Akulaku, and Bukalapak, per CB Insights.
According to Bloomberg, Sea Limited’s billionaire co-founder Forrest Li said Thursday that top management would slash salaries and cut spending. The leadership team will go without compensation until the company achieves self-sufficiency.
Affected employees will receive compensation packages “in line with market norms,” Shopee and Singapore’s Creative Media and Publishing Union, or CMPU, told Insider in a joint statement.
Shopee reported a loss of $931.2 million for the second quarter of 2022, which widened significantly from a net loss of $433.7 million for the second quarter of 2021, according to Sea Limited’s financial statements.
The job cuts come as the e-commerce company shuts down its stores in Chile, Colombia, and Mexico and completely divests its operations in Argentina. 9. Shopee’s presence in Brazil will not be affected.
Southeast Asia revenue accounted for 63.5% of the company’s total revenues in 2021, while Latin America contributed 18.6% of annual sales. While Southeast Asia’s contribution to sales has remained more or less stable. Latin America’s share of total sales increased from 13% in 2019 to 18.6% in 2021.
In Brazil, however, Shopee’s sales grew 270% year over year in the second quarter of 2022, its earnings reports show. The accounts do not indicate the numerical income from Brazil.
Shopee’s layoffs follow layoffs across the e-commerce industry. In late July, Ottawa-based Shopify announced it would lay off 1,000 employees, or 10% of its global workforce.
In August, Bain-backed ShipBob laid off 7% of its workforce. 12 Statista report, the layoffs are part of an industry-wide downsizing amid repeated supply chain disruptions and unprecedented inflation.
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