Sea posts record growth as consumers go online for gaming, shopping fix
KUCHING: Sea Ltd (Sea), the parent company of Garena, Shopee and SeaMoney, recorded robust growth for the first quarter of 2020 (1Q20) as more consumers go online for their gaming and shopping fix because of the lockdowns put in place to curb the spread of the Coronavirus Disease 2019 (Covid-19). In a statement, it said on a group level, its total adjusted revenue grew 58 per cent y-o-y to US$913.9 million while gross profit for the quarter was up 424 per cent y-o-y to reach US$206.8 million, compared to US$39.5 million dollars in 1Q19. “Our communities are increasingly relying on our platforms during the pandemic. “Our users are turning to Garena to enjoy interactive entertainment and socialise with their friends during the social isolation of the lockdown. “Shopee is becoming a more integral part of the commercial ecosystem in each of our markets, with consumers now relying on our platform for their staples, daily essentials, and other consumption needs. “At the same time, more sellers are migrating to, or relying more on, Shopee to sustain and grow their business. “As our economies become more online and contactless, the digital payment and financial services that SeaMoney provides are becoming an ever more important part of the infrastructure in our region,” Sea’s chairman and group chief executive officer Forrest Li shared. “We are fortunate to be in a strong position to play a part in helping our communities navigate these challenging times and get back on the road to recovery. In addition to contributing funds and essential medical equipment to the frontline fight against the virus, we are doing everything we can to support economic recovery across our markets, leveraging the strengths of our platforms as market leaders in the digital economy,” he added. Sea’s digital entertainment segment which consists primarily of Garena, saw an adjusted revenue of US$512.4 million, up 30.3 per cent y-o-y from US$393.3 million in 1Q19. Its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) margin increased to 58.2 per cent for 1Q20 from 57.4 per cent for 1Q19. It explained that the top line growth for its digital entertainment was driven by strong growth in both active users and paying users. Quarterly paying users grew by 72.5 per cent y-o-y to 35.7 million, accounting for 8.9 per cent of QAUs for 1Q20. As for its e-commerce segment, or Shopee, the platform saw a surge in its gross orders in 1Q20, totaling 429.8 million, an increase of 111.2 per cent y-o-y from 203.5 million in 1Q19. Its gross merchandise value (GMV) growth accelerated to 74.3 per cent y-o-y to reach US$6.2 billion in 1Q20, compared to 64.8 per cent y-o-y in 1Q19. Shopee’s gross orders growth further accelerated to more than 140 per cent y-o-y in April 2020 as countries in Southeast Asia go into lockdown to curb the Covid19 outbreak. However, there is a slight quarter-on-quarter decrease in its overall and marketplace take rates is mainly due to the lockdowns and other movement restrictions in 1Q20. “These disruptions had a particularly significant impact on some of our cross-border merchants. As a result, we saw an impact on revenue derived from sales by those merchants. “This includes revenue from cross-border logistics that is recognised on a gross basis. “We also provided fee relief to our cross-border merchants who were materially impacted by the coronavirus crisis. “Into the second quarter, we have seen meaningful recovery of cross-border transactions on the platform,” Li explained.