New Delhi, March 28 In a dramatic move, Singapore-based Sea on Monday announced to shut operations of its e-commerce portal Shopee in India that was witnessing fresh hirings and growth amid criticism from the local industry bodies and the government banning its marquee game 'Garena Free Fire' along with 53 Chinese apps in the country.
Shopee will cease operations in India from Tuesday and aims to process all orders placed before that.
The company, however, said the decision to shut down e-commerce business in India has nothing to do with the government's ban on its popular game, but owing to "global market uncertainties".
"In view of global market uncertainties, we have decided to close our early-stage Shopee India initiative. During this period of transition, we will focus on supporting our local seller and buyer communities and our local team to make the process as smooth as possible," a company spokesperson said.
"We will continue to focus on our efforts to deliver a positive impact to our global communities, in line with our mission to better the lives of the underserved through technology," the spokesperson added.
The Indian government's ban on 'Garena Free Fire' in February, along with 53 other Chinese apps, had sent its stocks tumbling. Sea's stock sank by 19 per cent as it lost $16 billion in New York on February 14, the steepest decline, though analysts speculated the revenue from India could be less than 10 per cent.
In January, the Confederation of All India Traders (CAIT) had moved to the Competition Commission of India (CCI) against Shopee, claiming that the firm allegedly indulged in predatory pricing and deep discounting tactics and violated the Competition Act.
In a fresh statement, CAIT welcomed the decision of Shopee to exit from India and said that any company that violates the sovereign law of the country and breaches the data collected from India will meet the same fate.
"There are a number of other foreign-funded companies which are habitually playing with Indian laws and are involved in malpractices. Either they should mend their ways, else they must pack their bags and exit from India," said CAIT Secretary General, Praveen Khandelwal.
The CAIT had launched a move against Shopee in September last year, and later it made extensive follow-ups with the Ministries of Finance and Commerce.
Khandelwal said SEA Holdings (the holding company of Shopee) has significant ownership, almost 25 per cent, by Chinese investment firm Tencent.
"Also, the founder of SEA, Forrest Li, is originally Chinese but became a naturalised Singaporean only a few years back. SEA uses Tencent Cloud to store data. Also, its gaming subsidiary Garena licenses most games from Tencent, leading to huge royalties, and the investment ensures that there is significant control and access to data," Khandelwal added.
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