Mumbai: Shopee, an e-commerce arm of the Singapore-based gaming giant Sea Ltd, has decided to withdraw from India's retail industry on Monday, the second retraction this month as the loss-making corporation faces a dismal growth prospect "in view of global market uncertainties".
Shopee's pullout from India comes only days after the Indian authorities banned its parent company Sea's gaming app Free Fire as part of a broader crackdown on Chinese apps.
While Sea Ltd, is based in Singapore, the company has come under scrutiny because of its Chinese connections, notably a Tencent investment. Sea's stock price on the New York Stock Exchange (NYSE) was down approximately 6% on Monday, at $116.12 per share, after falling earlier in the day.
Following India's ban on its gaming app last month, the company's market valuation fell by more than $16 billion.
The etailer, which competes with Meesho, Flipkart, and Amazon India, will close its shutters on March 29. This comes just weeks after its e-commerce branch Shopee announced its exit from France.
Shopee India announced in a notification to merchants that it will cease operations in India at 12 a.m. on March 29. Buyers will be unable to place new orders as a result, while sellers have been granted until May 30 to process money withdrawals and returns.
Nonetheless, the company stated that earlier orders would be processed and fulfilled "as normal," and that it would continue to provide after-sales services and support to all users.
The decision to close stores is surprising given Shopee's strong intentions for the Indian market. It was offering steep discounts on its marketplace to compete with existing behemoths.
Six months after entering the Indian market, Shopee was processing 100,000 orders per day and had over one million app installs on the Google Play Store. Ankit Upadhyay led the India business before joining Shopee Thailand as the head of supply chain management in February 2020. He was tasked with increasing the company's revenue by five to seven times in six months.
Sea earlier this month stated revenue growth in its e-commerce division would be cut in half this year, from 157 per cent in 2021, due to fewer online transactions and engagements as more countries recover from the pandemic.
Shopee's India operations began in October 2021, as part of an aggressive international expansion that saw the company extend into Europe. At the time, Sea had a market capitalization of up to $200 billion. Since then, it has plummeted to $64.76 billion in March 2022.
Shopee India, the local unit, recruited local sellers and launched a shopping website and app. Amazon.com Inc and Walmart's Flipkart already controlled India's rapidly expanding e-commerce market. India has been one of the world's largest e-commerce markets.