Financial Insights

Singaporean company Shopee shuts it’s business in India

In a sudden decision, Shopee, part of the Sea Group, has abruptly decided to shut it’s business in India only after a few months of conducting business.

Shopee is an ecommerce platform which had launched in India in November 2021. It employed deep discounting strategies to expand into the Indian market. It had also managed to emerge as a competition for several players like Meesho, Shopsy and Snapdeal.

“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.”

The reason for their abrupt exit is uncertain. There could be a variety of reasons such as government pressure, high competition or plainly the disruption of business globally. 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).

The company had managed to hold out against it’s competitors but was facing severe cash burn. This could be a threat to new entrants in the market.

Highlight by Aman Agarwal.

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