Shopee-owner Sea misses quarterly profit estimates on higher expenses
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Sea has spent heavily on marketing, advertising and user acquisition, to fend off intense competition in South-east Asia’s e-commerce market from rivals.
PHOTO: REUTERS
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- Sea's Q3 profit missed Wall Street expectations due to increased operating expenses, rising 28% to US$2.12 billion, driven by e-commerce spending.
- Shopee used financial incentives like cashbacks to attract consumers amid economic uncertainty and fend off competition from TikTok Shop and Alibaba.
- Despite higher spending, Sea's revenue rose to US$5.99 billion, exceeding estimates, with e-commerce revenue reaching US$4.3 billion.
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BENGALURU - Singapore’s Sea missed Wall Street expectations for third-quarter profit on Nov 11 and reported a sharp jump in operating expenses tied to aggressive spending on e-commerce, sending its US-listed shares down about 3 per cent before the bell.
Sea has spent heavily on marketing, advertising and user acquisition, to fend off intense competition in South-east Asia’s e-commerce market from rivals such as TikTok Shop and Alibaba.
Sea’s e-commerce platform, Shopee, has rolled out financial incentives such as cashbacks, buy now-pay later and loyalty currencies to attract consumers who are cautious amid economic uncertainty.
Revenue for Sea’s core e-commerce, digital entertainment and financial services segments have seen strong growth, signalling that the higher spending has found some success, even amid tariff-driven uncertainties.
Sea reported earnings per share of 59 US cents, missing analysts’ estimate of 76 US cents, according to data compiled by LSEG.
Overall operating expenses rose 28 per cent to US$2.12 billion (S$2.76 billion) compared with US$1.66 billion a year ago.
Sales and marketing expenses also rose 31 per cent, as the company spends heavily to defend its market position.
The company reported total quarterly revenue of US$5.99 billion, compared with estimates of US$5.65 billion.
Revenue for Sea’s e-commerce unit came in at US$4.3 billion, compared with estimates of US$3.99 billion. REUTERS
