SEA (formerly known as Garena)

[Choon]

I and a number around me buy from Taobao/Tmall instead of Lazada.

So I do think that Ali's market positioning for Lazada is poorly done.

A Taobao.SG similar to Amazon.SG would have a stronger brand identity.

[CY09]

Shopee has upped its ante under a new game called "Suprise treats".

From now until 25 December, choose an option of among the 3 and if you are the first 3,000 for each day, you are bound to get at least 1 coin or average of 5 coins per day. I did it today, the usual 1 try and then click on "browse grocery store, press visit" then scroll the the page one time every 8 seconds to clock one more try. Max of 3 attempts + 1 free try per day.

Today, I managed to get 10 coins, yesterday was 5 coins. My total haul for today games is 34 coins

It seems Shopee is sparing no expense to burn through its cash hoard to maintain market share (I will like to say thanks to Sea Group). However, Im now sure this quarter's financial results will not be pretty. Shopee is likely to report another deep red results, recording high marketing expenses (the cost line item where they record its promotional expenses including shopee coins). Lazada, on the other hand is doing absolutely nothing, except for its 10 coins everyday log in and the difficult to get rewards lazada mart game. Previosuly, I posted how restrictive the use of Lazcoins are.

I do not use tiktok shop because there is a need to actively scroll and I am not an avid shopper but an avid money pincher

<Getting free coins while typing this post and scrolling the shopee page once every 8 seconds with a swipe but not looking at its products advert>

[Wildreamz]

34 coins is just 34c right?

Not sure if it's the best "value" if you consider the time spent and the opportunity cost of what you can do with your time.

Just offering an alternate perspective here 

Especially when these small "time" and "attention" adds up.

Edit: Comes to my mind, that some of my richest friends, would rather watch hours of ads on YouTube, than pay for YouTube premium. Just wondering, some of the shrewdest people with regards to money, might be seriously undervaluing their time.

[dzwm87]

How much redemption of Shopee coins is also now capped by each product listing and dependent on which marketing promotion the merchant signed with Shopee. I don't think having 1,000 Shopee Coins means you can redeem $10 from a $11 priced SKU. The coins expire too so if one is compelled to utilize it out, then indirectly this may have created more sales for Shopee. Playing games to earn coins is one way for them to create sticky DAUs - the same which Taobao has done and which PDD has perfected.

[weijian]

Hi Weijian,

"In the earlier consolidation of cab hailing, it should be noted that both Didi and Uber were still unlisted entities, ie. they had private equity providing the disciplinary oversight. But less so for listed entities which are more readily able to raise capital via more diverse sources like debt/equity fund raising. And due to the non-equal voting shares, it is much harder to discipline them as well."

The reverse seems to be happening in the e commerce space for south East Asia. Both Sea Group and Alibaba are being scrutinised for their actions in the e commerce space by the market. Sea Group has stressed the need to be self sufficient and when CEO Forrest Li talked about restarting loss making ways in shopee, the share price was voted and shot down to currently 50% of what it was pre-announcement. Sea Group is now especially aware that the era of low cost financing with convertible bonds is gone because the market knows Forrest Li past market talk was mostly hot air and reality is that Sea has difficulty reaching its targets due to competitiion

For where we are now, it seems the unlisted Bytedance is the most reckless. In fact throughout their years of operations, their amount of losses is eye watering.

hi CY09,

Less discipline doesn't mean there is no discipline. For listed entities, discipline comes from failing prices which are traded everyday. Since raising a 6billion war chest in 3Q21 from equity/bonds at peak public optimism, SEA went on a cash burning spree via Shopee. After huge amount of burnt money and >50% stock price declines that act as the Disciplinary Master, they has to be a stop (unfortunately abeit temporary) somewhere.

Discipline from unlisted entities comes in the boardroom. And nothing triggers up the boardroom more than the need to raise more unanticipated funding and possibly at lower valuations. Bytedance as an overall entity looks to be immensely profitable. Of course we are not privy to what happens in the boardroom. But if I were to make a guess, their profit leaders are still growing and throwing huge cashflow to allow them to venture into new businesses and create loss leaders. It could also be part of their strategy to come in and challenge the existing incumbents who are already bloodied from their previous war.

https://www.straitstimes.com/business/ti...st-time-ft

[CY09]

Thanks weijian,

So to summarise, the warfront is as follows:

Bytedance- Uses Douyin's profit to subsidise Tiktok, tiktok shop and Tokopedia.

Alibaba- Uses its profitable china e commerce platforms to subsidise Lazada and the rest of its unprofitable entities

Sea Group- Uses Garena to subsidise Shopee

PS: Shopee Coins can be used in SGQR to pay for hakwer food purchase. Dont need to be spent on shopee

[CY09]

For the past 2 months, playing shopee games has yielded me 3,000+ coins in free cash (equivalent to SGD$30).

In addition, shopee has started dishing out 10-20% discount vouchers for purchases on shopee mall/cashback items.

As an indicator of its earnings results, I am not optimistic of Sea group's performance. Their cut throat pricing in the face of Tiktokshop will mean hundreds of million of cash burn each quarter. Until Sea Group wins the battle, I am not entirely optimistic of the company prospects. With the way it is going, either bytedance surrenders or my sense is that we will see Shopee as a subsidary closing down and bankrupted. Giving free cash to users with an avenue to cash out via QR payments at your offline shopee merchants is a receipe for disaster

As a personal saving advice, to manage my cashflow, I am now paying my hawkers and Sheng Shiong with CDC vouchers, the rest of the amount, I pay via shopeepay QR code (offsetting 50% of the balance with coins). On this combination and at times eating at home, it is anticipated my cash outflow for food will be minimal for 02 months thanks to CDC vouchers and Shopeepay

For info shopeepay, can be used at Sheng Shiong Supermarket as well. So thank god for our generous Sea Group shareholders and CDC vouchers

[CY09]

Shopee has cut its game rewards and vouchers.

The earn rate for games has halved. There are no more 15% and 20% daily voucher which can be used with credit card expenditure. It is now restricted to only those which is paid via shopeepay and with a cap of only 500 coins reward ($5), as opposed to the past where the cap was $10 or $20.

My view is that marketting expenses have died off. As this crazy marketting reward was dished out from Oct 2023 -Jan 2024, we might be seeing 2 quarter of heavy losses reported by Sea Group. 2024 might be see an improvement in margins as compared to 2023

[CY09]

Nothing much has changed for shopee games. My win rate from coins is at least 20 coins ($0.20) per day.

However, from 1st April one of my main coin generator, Shopee pets cooking game will be paused indefinitely. This will bring down my earn rate from 20-25 coins to 15-20 coins now. The earn rate is dwindling and so has my coin accumulation. Since mid Feb, I am now beginning to be a net negative accumulator of shopee coins.

As a recap I have been using Shopeecoins to eat at hawkers, pay for grocery at Sheng Shiong. On the vouchers front, shopee has been starting to stinge on its vouchers with 15% cashback vouchers which are maxed at 500 coins maximum. In a sense, shopee vouchers are now at low effective discount rate of 8-10%.

As a consumer of the shopee platform, it is indeed sad. But I think Sea Group shareholders should start to rejoice. In my view, the shopee platform losses are going to narrow from its US$300 million per quarter losses. Shopee's own logisitcs has been improving with more expensive shipping fee. My guess is that Sea Group on a whole might be able to maintain a profit but should be less than US$200 million on an annual basis.

The shopee platform is starting to prove how an economies of scale + a scaling back of discounts could turn it into a non loss making platform, while Sea Finance and Garena have proven to be profitable. Im quite confident as time progresses, Sea Group can become a billion dollar net profit generating company a year. But at a 30 times future valuation P/E with execution risk, I think its a tad too expensive. Worth a revisit when its down to its teens

[CY09]

Sea Group has cut the earn rate from its game again. Its now harder for daily log in to amass a large amount of coins. Based on a 2 month pattern, it is likely I can only receive 30-50% subsidy on only a $10 value item.

On its competitor front, Tiktokshop has raised its seller commission rate in South East Asia. While there is indeed a competitor, Tiktok does not seem to be burning as much cash as previously. Hence I dont think Sea Group needs to maintain a $300 million US per quarter burn rate as it is. With its continous focus on improving margins and that its competitor in tiktok is not aggressive, I feel Sea Group's Shopee might be able to surprise now with a breakeven status. It is likely we are seeing the end of Sea Group's cash burning ways.

Hopefully, we can see the real cash flow generation ability of the group like how Alibaba has made peace with JD, Kuaishou and Bytedance in China