Source | Zhixiang Network (ID:passagegroup)
Author | Xie Xiaodan
Edit | Xie Weiping
\ This article totals 2344 words, expected to read 6 minutes /
Since the second half of 2021, Shopee has significantly accelerated its globalization process, continuing to be located in India, Mexico, Brazil, Argentina, Chile, Colombia, Poland and other places.
It is widely believed that the potential of e-commerce in the Indian market is huge. From 2021 to 2025, India's e-commerce revenue is expected to grow at a compound annual growth rate (CAGR) of 18.2% to $120.1 billion, according to GlobalData data. But although Amazon and Walmart's Flipkart have been working in India for many years, e-commerce retail accounts for only about 3% of total retail sales.
According to Reuters, Shopee had originally planned to invest $1 billion in India. Operating for just a few months, the Indian market has not lived up to Shopee's expectations, and to date, Shopee has accumulated more than 1 million installs on Google Play in India, with 100,000 orders per day.
But the plan didn't change quickly. On March 28, Shopee announced that it had decided to close its India operations "in view of the uncertainty in the global market." Earlier, on March 6, Shopee shut down its french site, which had been in place for just five months.
According to media analysis, Shopee's sudden withdrawal from India is because India discriminates against Chinese-funded companies, and although Shopee is a Singaporean company, its ties with China have been entangled by the Indian side.
Sudden shutdown
On March 28, 2022, Singapore-based e-commerce company Shopee suddenly announced, "In view of the uncertainty in the global market, we have decided to close our early Shopee India program." ”
In a notice to sellers, Shopee India said it would stop its operations in India from 12:00 a.m. on March 29. After that, buyers will not be able to place new orders, and sellers will have time to make payment withdrawals and returns by May 30. The company guarantees that it will continue to process and fulfill previous orders "as usual" and will provide after-sales service and support for all users who purchase on the platform.
Meanwhile, shopee India was spotted to be still promoting the April 4 promotion, which also signaled the suddenness of the move.
At this point, Shopee has only been operating in India for six months. At the end of August 2021, Southeast Asian e-commerce platform Shopee began quietly launching its business in India. In a video released in early August, he declared that "Shopee is coming to India" and is also attracting investors in India to attract sellers to the platform. At the same time, Shopee has also made a commitment to provide sellers and buyers with free logistics and zero commissions.
According to Techcrunch, the company set up a local entity as early as June 2021. It can be seen that sea has been planning for a long time to enter India. There is also recruitment and recruitment of local sellers. At the time, Shopee quietly launched a website for Indian sellers and said on the site that they could start accepting customer orders.
After entering India, Shopee has always maintained an aggressive strategy, according to Sensor Tower's January data, before the end of the month, its app downloads reached 21 million times, becoming the second most downloaded app in India (after Meesho). Another study showed that it has surpassed Amazon, JioMart, Myntra and Ajio in terms of daily and monthly activity, after Meesho and Flipkart. In addition, Shopee, which has been in the Indian market for just a few months, now has a daily order volume of more than 100,000.
Second defeat
In fact, this is also the second setback that Sea has suffered in India since entering 2022.
On the afternoon of February 14, the Indian government banned 54 Chinese-related apps for security reasons. Starting in 2020, this is already the fifth batch of domestic apps banned in India on the grounds of "security", with a total of 56 games banned.
But among the 54 apps, Garena's self-developed chicken-eating mobile game Free Fire is also among them, and its parent company is the Sea Group, which was born in Singapore in 2009.
According to Sensor Tower, Before the ban, India had become the largest download market for Free Fire, with Free Fire and Free Fire Max downloaded more than 238 million times in India. In 2021, the game will be downloaded 55 million times on the Indian App Store and Google Play stores, contributing a total of $34.3 million. According to AppAnnie, 40 million of Free Fire's 75 million monthly active users worldwide in January came from India. As of Q3 2021, it has been ranked first in India's mobile game revenue for four consecutive quarters.
According to Reuters, Shopee's withdrawal may be related to the banning of Free Fire. A person with direct knowledge of the company's thinking said Shopee's decision to withdraw from the Indian market was partly due to stricter regulatory scrutiny, the banning of Sea's gaming app Free Fire, and part of a crackdown on companies suspected of sending data to Chinese servers.
Although Sea is a Singaporean company, its association with China is constantly amplified by India.
In November 2021, the Delhi High Court of India issued a notice to the Centre for Public Interest Litigation (PIL) requesting the Federal and Ministry of Commerce of India to take appropriate measures against SPPIN India Private Limited, a Chinese company suspected of operating the e-commerce website Shopee, as it could pose a "serious and imminent" danger to India's security, sovereignty and territorial integrity.
In early March, Sea also said it was not transferring or storing data from Indian users in China. But that still doesn't reassure India about Sea.
E-commerce dilemma
As a result, Shopee has always been under attack since it entered India.
Back in The Beginning of Shopee's foray into India, in a written letter from the All India Traders Association (CAIT) to Prime Minister Narendra Modi, the association asked to investigate Shopee's situation in India.
CAIT said in a statement that Shopee is owned and controlled by Chinese and will send shockwaves to the offline trader community, who have not yet recovered from the unfair trade practices adopted by foreign e-commerce companies.
The letter also mentions that "a large amount of ownership (nearly 25 percent) in Sea (Shopee's holding company) is owned by Tencent. In addition, Sea's founder, Forrest Li, was originally a Chinese, but was only naturalized in Singapore a few years ago. Sea uses Tencent Cloud to store data. In addition, Sea's gaming subsidiary Garena obtained licenses for most of the games from Tencent, resulting in huge royalties, an investment that ensured significant control and access to data. ”
In addition to Modi, the letter was sent to india's Ministry of Home Affairs, Ministry of Defence, Ministry of Finance, Ministry of Commerce, Ministry of Women and Child Development, and Minister of Electronics and Technology. At the same time, the letter was also posted on social networks by praveen Khandelwal, the secretary general of the association, and there were not a few Indians who supported him in the comments.
CAIT also earlier filed information with the Competition Commission of India (CCI) accusing Shopee of selling a variety of products at very low prices in an effort to eliminate competition from small retailers.
Although the CCI recently dismissed the complaint against Shopee's predatory pricing. But the association's allegations represent a pervasive "hostility" of some Indians toward e-commerce platforms, such as Amazon and Walmart's Flipkart, both facing antitrust investigations in 2021.
In addition, in early January 2022, the National Co-Convener of Swadeshi Jagaran Manch Ashwani Mahajan and chairman of the fifteenth Financial Council, NK Singh's Think Tank (CIEU), sent a letter to Piyush Goyal, Minister of Commerce, Commerce, Commerce and Consumer Affairs of India, asking an investigation into Shopee, Meesho and Swiggy's Instamart, claiming that their products were below normal prices.
"There is evidence that many foreign e-commerce companies like Meesho and Shopee are addicted to steep discounts in their respective markets and are asking sellers to lower the price of their products. This not only affects the normal price, but also reflects the discount on funds. CIEU said in the letter.
The letter added: "We demand that any failure to comply with the rules of the industry be punished with the utmost severity to set an example. In addition, India's Ministry of Consumer Affairs is also proposing to prohibit e-commerce platforms from adopting Flash sales policies, and not allowing e-commerce platform-related affiliates to become sellers.
Commenting on Shopee's withdrawal, Praveen Khandelwal, secretary general of the All India Traders' Federation (CAIT), said, "It's good that wise lawyers persuaded Shopee and its parent company. Shopee's entry was illegal because China shared borders with India, violating foreign direct investment policies. ”
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