Sea to scale up digital financial services as Q1 revenue doubles to US$1.8 billion

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SINGAPORE – Singapore technology group Sea chairman Forrest Li said the firm would scale up its fintech offerings in South-east Asia, as the firm more than doubled revenue in 2021 thanks to growth in e-commerce and entertainment.

“Digital financial in our region are at early stages and we expect use cases to grow,” the executive told an investor call. Sea, which claimed US$3.4 billion (S$4.5 billion) in payments for its mobile wallet for the first quarter of 2021, won a digital banking licence in Singapore in December and purchased last year Indonesian lender Bank BKE ( Bank Kesejahteraan Ekonomi) to turn into a digital bank.

The New York-listed firm announced on Tuesday (May 18) it had booked a revenue of US$1.8 billion for the first quarter of 2021, up 147 per cent year on year. Its net loss widened to US$422 million from US$281 million, as the company more than doubled sales and marketing expenses. Sea’s e-commerce arm Shopee brought in US$922 million in revenue, up 250 per cent year on year, while its gaming arm Garena raked in US$781 million in revenue, up 111 per cent on the year.

Mr Li told reporters that Shopee was seeing growth in Brazil due to a nascent regional expansion. Reuters reported earlier in 2021 that the firm was launching in Mexico and was eyeing a possible wider expansion in Latin America. Analysts said they believe the jump in marketing costs was also due to Shopee’s launch of a food delivery arm segment in Indonesia this year, where it now competes with ride-hailers Grab and Gojek.

The group has seen meteoric growth on the stock markets during the coronavirus as shoppers turned to the internet, with its market cap now at US$113 billion. But it is expected to face increased competition in South-east Asia. Indonesian ride-hailing and payments firm Gojek and e-commerce leader Tokopedia announced on Monday they are merging to create a multi-billion dollar tech company called GoTo in the country’s largest-ever deal.

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