Shopee, the ecommerce arm of Sea Group, is shutting down its India operations, two people aware of the development told VCCircle.
At a company-wide town hall on Monday, the Singapore-based ecommerce company announced its exit from India to its local employees.
"In view of global market uncertainties, we have decided to close our early-stage Shopee India initiative. 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," Shopee India said in a statement.
“External conditions are changing and profitability is crucial now. Ecommerce companies on stock exchanges have been crucified for not having that. Shopee's stock is now one third because of it. So they are reducing their burn and shutting newer markets which are not ‘slam dunk’ win,” a senior executive in the ecommerce space said with the condition of anonymity.
The share prices of Indian companies, notably tech behemoths, are declining, owing in part to a volatile market caused by the current geopolitical environment.
Other Indian IT firms, such as food delivery company Zomato, beauty ecommerce portal Nykaa, and financial firms Paytm and Policybazaar, are also down 35% to 50% from initial public offerings.
The company competes with the likes of Flipkart, Meesho and Amazon at the lower end of the market.
Shopee had shut down its operations in France earlier this month, after arriving in the country in October 2021, as part of its European expansion.
The company launched a website for Indian retailers in September last year. The move was considered as a late entrant in Southeast Asia, but it was also onboarding merchants and providing them with lucrative advantages like free delivery and no commission. It formally began in the country a month later.
Shopee faced hurdles last year when its launch prompted criticism from local retailers.
The Confederation of All India Traders (CAIT) had reached out to Prime Minister Narendra Modi, cautioning him that the arrival of yet another foreign player engaging in what was alleged as “unfair trade practices” will hurt the players.
In recent years, the company has expanded to as many as nine global markets including Brazil, Poland, Mexico, Columbia and Chile.
