Shopee lost nearly 8,000 VND per order

E-commerce continues to “burn money”

Although the results have improved, e-commerce, specifically the Shopee platform, continues to be a “money-burning” field of Sea – Shopee’s parent company.

In the second quarter of 2022, the value of 2 billion successful orders on Shopee (GMV) reached 19 billion USD. According to calculations, each Shopee order has an average value of nearly 10 USD. Notably, Shopee lost about 0.33 USD (nearly 8 thousand VND) on each order. This loss has improved 21% compared to the same period in 2021 – Sea’s financial report for the second quarter of 2022 said.

When talking to shareholders, founder and CEO Forrest Li said that Sea “did the right thing at the right time” to maintain its market leadership position.

According to him, the results achieved in this quarter represent the success of the first efforts to make the apparatus “lean” and “adaptable” – two things that are intimately important to long-term success in the global context. uncertainty and trends in business reopening after the pandemic.

In the second quarter, although Shopee had a spectacular revenue growth of up to 51.4% over the same period last year, the online sales platform was still the main loss-making business, with a net loss of 931 million VND. USD, EBITDA (earnings before taxes, interest and depreciation) was negative 648.1 million USD.

Southeast Asia and Taiwan markets were Shopee’s bright spots in business last quarter.

Each Shopee order in these markets has a negligible loss of 1 cent (less than VND 240), improving efficiency by 95% compared to the same period in 2021, while in the Brazilian market, each order still has a loss of 1, 42 USD. This year, Shopee withdrew from India, as well as some European countries (France, Spain) and Latin America (Mexico, Chile and Colombia).

1-3% of Shopee employees will be cut

Although it did not directly mention the issue of staff reduction, Sea’s second quarter business report also forecast a plan to streamline the apparatus.

1-3% of the workforce will be cut, an anonymous source told Business Insider. This is not a high rate of layoffs, but an indicator of Shopee’s strategic changes in the near future.

Shopee Indonesia is the first to announce the number of 3% of employees forced to quit, in both marketing and operations departments, corresponding to Business Insider’s information.

On September 19, a few hours after the all-employee meeting at the Singapore headquarters, some employees of Sea Limited began to receive notices of resignation.

According to Zing ‘s source, some benefits for employees of this multinational corporation in Vietnam such as breakfast, snacks, team building are also reduced to the maximum extent. In Vietnam, Shopee is always one of the businesses with the coolest working environment with outstanding benefits for employees.

With three main business segments: e-commerce (Shopee), online entertainment (Garena) and financial services (SeaMoney), Sea’s total loss before interest, tax and amortization (EBITDA) is up to $506.3 million. Only online entertainment is profitable.

Although there was no mention of layoffs or organizational restructuring, the keywords “lean” and “improving efficiency” were repeated many times during the meeting with shareholders, which revealed a part of the plan. of the parent company Shopee.

News about Shopee’s parent company also made employees of this group in Vietnam worried because they could be fired at any time. However, with a 1-3% reduction in staff, it seems that in active markets, Shopee’s main plan is to tighten spending, not mass layoffs, at least for now. in the next 12-18 months.

“ In the short term, we must find ways to reduce operating costs. The more cash we save each day, the more time we have to weather this storm. Every little bit counts ,” Forrest Li wrote in a letter to employees on September 15, announcing this “painful and stressful transition”.