In a seemingly sudden decision, Singaporean e-commerce firm Shopee, part of the Sea group, is leaving the Indian market, mere months after it launched here, the company told employees in a town hall meeting.
“In view of global market uncertainties, we have decided to close our early-stage Shopee India initiative,” the Sea group said in a statement. “During this period of transition, we will focus on supporting our local seller and buyer communities and our local team to make the process as smooth as possible.”
Shopee is a low-cost e-commerce platform that launched in India in November 2021, after which it rapidly used a tried-and-tested strategy of deeply discounted products to expand in the Indian market. The firm’s app had over 20 million downloads as recently as January, according to one estimate by Sensor Tower.
It’s unclear how much advance warning employees had. Until recently, the app has been working as usual — even as this story is being written, sales continue, with the site advertising a sale on April 4. A review of posts on LinkedIn showed recent recruits to the company posting about joining weeks, if not days, ago. One former employee put out a post on Monday warning recruits who had been messaging him for advice to hold their applications to join the company.
It’s also unclear if government pressure behind the scenes was involved in Shopee’s decision, or if this was purely a business decision driven by the so-called “global market uncertainties” cited by the company. The Confederation of All India Traders, a brick-and-mortar lobbying group close to the government, had demanded that Shopee be banned from India due to its ties to China (Tencent holds a minority stake, and the company’s founder was born in Tianjin).
Praveen Khandelwal, CAIT’s Secretary General, celebrated the company’s withdrawal on Twitter, saying that “All companies violating Sovereign Indian laws and breaching data privacy shall meet the same fate.”
The Sea group’s wildly popular game Free Fire was banned in India last month as a part of an occasional anti-China outburst by the Ministry of Electronics and Information Technology; this could be a signal that the government was willing to treat the Sea group’s companies as Chinese. Free Fire’s publisher Garena put out a brief statement at that time making no reference to the ban saying it would look into the issue.
China’s foreign minister Wang Yi visited India in an unexpected meeting, but external affairs minister S Jaishankar said that relations with China would not be “normal” as long as the standoff at the disputed border continued, where Beijing has reportedly pushed into Indian-controlled territory, would end.
Shopee had emerged as arch-rival for Meesho, which had pivoted from social commerce to a regular e-commerce model last year, which in turn led to its own struggles with cash burn, as Entrackr had reported earlier this month. It was also a competition for Flipkart’s Shopsy and Snapdeal.