At 12 am India time today (March 29), Shopee’s Indian platform ceased operations abruptly.
In a notification on its site and social media pages, the e-commerce firm said all orders placed before then will be “fulfilled as usual, and after-sale services and support will continue to be available to all users who have made purchases on our platform.”
Owned by Singapore-based Sea, seven-year-old Shopee shut down its India operations merely six months after its launch.
However, penetrating the Indian market was never going to be easy.
As if taking on seasoned giants Amazon and Flipkart was not challenging enough, traditional players like Mukesh Ambani’s Reliance Industries and the 154-year old Tata Group, too, have joined the race. Together, the four giants will capture 80% of India’s e-commerce market, according to Forrester advisory. That leaves little room for others.
Additionally, Shopee, which operated as a social marketplace that not only let customers transact on the app but also follow and chat with sellers, faced the heat from smaller direct rivals like Softbank-backed Meesho.
It probably didn’t help that Sea was quickly getting into the government’s bad books. Its gaming arm, Free Fire, was one of the 54 apps linked to China and banned last month. The company’s founders are Chinese-born, and Chinese internet giant Tencent holds a significant stake—around 20%—in Sea.
The Free Fire ban saw a massive $16 billion shaved off Sea’s value in a single day.
Sea pointed to “global market uncertainties” to justify Shopee’s withdrawal from India. The country’s unstable political environment probably played a part in the decision as well.
In a town hall informing its roughly 300 Indian employees of the closure, the management said it “did not see long term sustainable growth for Shopee in the India market,” an unnamed source told BusinessLine. The employees have reportedly been offered three months’ salaries as severance, and those working in its office have been offered relocation benefits to return to their hometown.
Sellers associated with the platform were told that their support portal, which they use for things like payment withdrawals and disputes for returns, will be available till May 30.