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Sea’s rise in Indonesia causing ripples of concern among rivals

SEA is winding down operations in South America, while trimming gaming staff in Shanghai.
Singapore-based e-commerce firm Sea Ltd says it will focus on core Asian states, after winding down operations in Latin America. File photo: Reuters.

Singapore-based Sea’s surge into Indonesia’s food delivery and financial services sectors has been making waves, with the locals now poised to join forces to take on the threat.¬†

Riding on the success of a cash-generating gaming business, US-listed Sea has invested heavily in its Shopee e-commerce brand and successfully taken on Alibaba’s Lazada and other rivals in recent years.

Its share price has risen five-fold over the past year, giving Sea a market value of $111 billion.

Now it is muscling into food delivery and financial services in Indonesia, the world’s fourth-most-populous country, posing a new threat to regional rivals including ride-hailing and delivery unicorns Grab and GoJek.

Read more: Baidu’s lukewarm reception on HK debut still raises $3.1 billion¬†

At stake is a slice of the more than 400 million internet users in South-east Asia’s digital economy, which is estimated to triple to $309 billion by 2025, according to a study by Google, Temasek and Bain & Company.¬†

Tech behemoths, including Tencent, a major investor in Sea, Alibaba, Google and Softbank Group Corp, are big backers of its regional champions.

Sources say Sea’s aggressive expansion is one driver of merger discussions between Gojek and e-commerce platform Tokopedia. The Indonesian firms aim to create an $18 billion powerhouse to fight off Sea and regional giant Grab.

Meanwhile, Grab and others, including travel app Traveloka and Indonesian e-commerce unicorn Bukalapak, are rushing for public listings, hoping to ride the coattails of Sea’s stock rally while defending their turf.


“Sea is like Thanos, massive and powerful, and able to take down half of the world, or in this case half the start-ups,” Willson Cuaca, co-founder of East Ventures and an early backer of Tokopedia, joked as he compared Sea to the powerful villain in the Marvel film series.

“Like the Avengers, companies need to band together if they want to ensure their survival and to win the war.”

Sea’s stock rally reflects a scarcity of options for investors seeking exposure to the booming South-east Asia internet sector. It went public in 2017 and has raised some $7 billion in share and debt sales, with early investor Tencent now holding a stake of about 20%.

That investor appetite, combined with a need to raise cash to match Sea’s muscle, is forcing rivals to seek listings as quickly as they can.


Sea’s success owes much to its online gaming business Garena, whose 2017 title Free Fire became the most downloaded game globally over the past two years.

In Indonesia, ShopeeFood is wooing vendors by touting its 80 million-strong user base and promising to subsidise steep discounting.

The next showdown will be in financial services. Sea has bought Indonesia’s Bank BKE and has hired a veteran of China’s peer-to-peer platforms to head its “SeaMoney” banking efforts.

  • Reporting by Reuters

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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