Seas Limited Stock : A Southeast Asian Amazon?
Seas Limited Stock : A Southeast Asian Amazon? Sea Limited is currently one of the highest valued e-commerce start-up companies integrating gaming, e-commerce and digital payment business in Southeast Asia. It was founded by Chinese entrepreneur Forrest Li in Singapore in 2009.
Formerly known as Garena, the company officially changed its name to Sea Limited after raising $550 million in a new round of funding in the first half of 2017. SEA does not mean “the ocean”, but rather the acronym for Southeast Asia, and the company’s mission is to “use technology to create a better life for consumers and small businesses in Southeast Asia”.
In Southeast Asia, where the mobile Internet is still in the early stage of development, SEA has a position no less important than Tencent and Alibaba in China’s technology industry, so it is also called Little Tencent or Little Alibaba in Southeast Asia.
But in business form, it really is a combination of Tencent and Alibaba. SEA’s main business is divided into three parts: digital entertainment business Garena, e-commerce business Shopee and digital financial business SeaMoney.
Here is a brief introduction to the three main businesses.
Garena, established in 2009, is a leading online games developer and publisher with a global footprint across more than 130 markets. It provides global audiences with popular and engaging mobile and PC online games. It also advocates games as a social and entertainment platform that allows its community to engage and interact. Take Free Fire, which was developed and published by Garena for example.
It’s a popular mobile battle royale game.
Free Fire was the most downloaded mobile game worldwide in 2019 and 2020. It was also the top grossing mobile game in Latin America, Southeast Asia and India in 2020. Of course, Garena also exclusively licenses and publishes games from partners around the world.
In addition, Garena is a leading esports organizer. It hosts esports events around the world that range from grassroots local tournaments to some of the most viewed professional esports competitions globally. At the annual Esports Awards 2020, Free Fire received the inaugural “Esports Mobile Game of the Year” award. Free Fire was also the top ranking mobile-only video game on YouTube in terms of views in 2019 and 2020.
Shopee，launched in 2015, is the leading e-commerce platform in Southeast Asia and Taiwan. It provides consumers with a convenient, safe, fast and enjoyable online shopping experience that millions of consumers enjoy every day. It offers a wide range of products, supported by integrated payments and seamless fulfillment.
In addition to enabling consumers to enjoy shopping at home, Shopee is also committed to helping brands and retailers to achieve success in e-commerce, striving to achieve a triple win for consumers, brands and platforms. Shopee believes in the transformative power of technology and is committed to connecting buyers and sellers in a community defined by simplicity, joy and solidarity.
Shopee is consistently ranked the top app in the Shopping category in Southeast Asia in terms of monthly active users, total time in app on Android, and downloads. Shopee was also the third most downloaded app globally in the Shopping category in 2020. Shopee was ranked first in YouGov’s “Best APAC Buzz Rankings 2020”, and ranked eighth in YouGov’s “Best Global Brands 2020”.
SeaMoney, established in 2014, is a leading digital payments and financial services provider in Southeast Asia. SeaMoney’s mission is to better the lives of individuals and businesses in their region with financial services through technology. Its products include mobile wallet services, payment processing, credit and related digital financial services and products. These services and products are offered under AirPay, ShopeePay, Spaylater and other brands in the region.
Among Sea Limited’s three main businesses, the digital entertainment business, namely the gaming business Garena, is not only the earliest, but also the largest revenue source. In its 2019 financial report, Sea Games generated $1.8 billion in revenue, accounting for 60 percent of total revenue, and made a profit of $1 billion.
Initially, Garena was primarily a game agency model, but the key to its rise was the League of Legends dealership in Southeast Asia in 2010. In the years since, it has partnered with Tencent, Changyou, Electronic Arts, Pubg Corp, Nexon and other game production companies to localize games.
The gaming agency business has paid off for Garena, turning a profit two years after its launch and growing into the largest gaming agency in Southeast Asia. Since then, with the rise of mobile games and the overall strength, Garena has also started to make efforts in mobile games and self-developed games, setting up a game research and development team in Shanghai. In December 2017, Garena’s first self-developed “chicken-eating” mobile game Free Fire was released and has been a huge success.
By the end of Q3 2019, the game had accumulated more than 450 million registered users, making it the highest grossing mobile game in Latin America and Southeast Asia in the third quarter, generating more than $1 billion in cumulative revenue, according to SEA’s financial report. On the Google Play Store, Free Fire was voted the Best Popular Vote Game of 2019, ranking just behind PUBG, Fortnite, and Call of Duty mobile Game.
Apart from Garena, Shopee is dominating the e-commerce scene and has become the fastest growing business in SEA. That said, Shopee also has the highest input cost. is the fastest growing business of SEA, but it also has the highest input cost. From 2016 to 2019, the share of SEA’s e-commerce business in total revenue increased from 5.1% in 2016 to 37.8% in 2019, which is expected to equal or even exceed the gaming business in the future. As the backbone of SEA’s e-commerce business, Shopee’s total transaction volume reached $17.6 billion in 2019, up 71% year-on-year from 2018. The total number of orders reached 1.2 billion.
Shopee was launched into the market in 2015. Similar to Taobao, Shopee focuses on the C2C model. Initially based in Singapore, it has since expanded to Malaysia, Thailand, Taiwan, Indonesia, Vietnam and the Philippines.
Finally, although SEA is a Singaporean company, it has close ties to China. In terms of business, most of the games it agents are the products of Chinese game companies, and domestic e-commerce practitioners are an important source of sellers. In terms of capital, Tencent and Hillhouse Capital are its important investors; in terms of team members, SEA’s earliest founders and current key executives are also Chinese.
Tencent’s continuous support has played a great role in SEA’s growth, especially in the area of SEA’s game development. In addition to providing capital support, Tencent has donated its game resources. In 2010, Riot games, invested by Tencent, handed over the operation rights of its popular game League of Heroes in Southeast Asia to Garena, and then handed over the Southeast Asia agency rights of several games to Garena. In November 2018, SEA and Tencent reached cooperation. Garena will have a five-year priority to release Tencent’s mobile and PC games in Indonesia, Thailand, Philippines, Malaysia, Singapore and Taiwan.
Written by Xinying Lai
Edited by Adele Su Yan Teo & Jimei Shen