SE - its e-commerce arm, Shopee, laid off more people recently including Indonesia and China. Shopee said the job cuts were related to "business optimization". I thought the layoffs in China were interesting given the transition of SE's IT department to China from Singapore in 2019. By now, there are widespread investor expectations that Shopee's losses will shrink in 2H 2022. But what about growth? Could we see sub 15% Shopee GMV in 2H 2022? (I'm currently at 15%). Shopee's Southeast Asia GMV growth in Q2 2022 wasn't higher than 20% - that growth can easily be cut in half with the ramp of TikTok. Also what about those exclusive contracts Shopee signed up with Southeast Asia merchants? In the past, Shopee asked top sellers to sign exclusive agreements, as long as they don't go to TikTok or Lazada to sell goods. In exchange, the platform will give them traffic and offer free commissions. Well, that may not be the case anymore as Shopee traffic falls and Shopee is forced to raise commissions. Shopee CEO Chris Zhimin has his work cut out.
I expect more merchants to sign with TikTok in the coming months. I'm hearing from my contacts that TikTok has a bunch of new job openings worldwide, particularly in Southeast Asia. Looks like former Shopee folks are first in line. Indonesia is TikTok's #2 market in terms of active users - they see a big opportunity with livestreaming e-commerce there.
