Off the record: Shopee’s turbulent 2022: Recap part 2 of 5

Shopee, the largest ecommerce platform in Southeast Asia, was in an all out expansion mode (new markets, new verticals) in 2021 – and its parent Sea Group’s market cap briefly hit US$200 billion. 

2022 was a totally different matter. Its market cap is down almost 90%. Its headlines the entire year have been negative – geopolitics, product slowdown, people and profit issues, and probably most troubling – the rise of TikTok Shop.

To discuss some of the common questions and concerns from the community, Momentum Academy held an online event: “Off the Record: Shopee’s turbulent 2022” event on 17 November 2022. 

More than 400 investors, founders and corporate executives registered for the event. In the first part, we took an initial look at the turbulent (market) developments there have been for Shopee in 2021. Here is the second part:

To understand what’s going on behind the scenes, it is essential to take a look at the numbers and the market:


When plotting the GMV and e-commerce revenue over the last few years, we see that there has been a significant growth – especially from 2019 to 2021. In 2022, however, this development has slowed down.

A look at the liquidity situation shows that it was a close call. Raising $6b cash in September 2021 was really timely – otherwise Shopee would have had to make the cost structure much more restrictive. They now fortunately still have enough money to support themselves for a while. Shopee needs to use this time to prove they can be profitable. 

In the past, Shopee’s Capex basically included the purchase of offices, servers, warehouses, and other equipment for logistics. But our sense is that spending on office space and servers have been reduced to a minimal level especially with headcount reduction and abandoning of cloud launch. And most of the investment today, as a result, is probably going into logistics, which is actually quite beneficial for the company.

Meanwhile, its consumer credit businesses have done quite well with growing loan book and low NPL (<10%). This business was disclosed in the earnings release for the first time, although the loan book has been sitting on its balance sheet for a while:

Sea Money has acquired quite a few licenses to operate different services in different markets: two insurance companies each in Indonesia and the Philippines; banking licenses through awarding and acquisition in four countries; as well as consumer credit businesses: 

Shopee’s high investment in fixed assets seems to have helped the company build a strong logistics network. By building a strong position in logistics as an e-commerce company, Shopee gains bargaining power and valuable fulfillment capabilities:

We think that this changing landscape is quite interesting and that Shopee is doing the right thing by investing in logistics and consumer credit. 

Make sure to also read our next article to find out more about the competition with TikTok and Lazada.

You can download a complimentary copy of the full presentation of Off the Record: Shopee’s Turbulent Year 2022 as well as our other reports for a behind-the-scenes look at Shopee and the future of e-commerce in Southeast Asia.

Find out more about the other topics discussed during the event: recap part 1/5, part 3/5, part 4/5, part 5/5. 

If you want to watch a replay of the event on our YouTube channel, click here. 

We also received a lot of interesting questions from participants which we have compiled and answered them – You can find them here.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].