The final piece of Sea Limited's puzzle—SeaMoney. $SE
More than 48% of Indonesians and 60% of Filipinos do not have a bank account!
In a region where the payments are underdeveloped, solving this is key to dominating commerce.
A deep dive into SeaMoney and its opportunities 🧵
More than 48% of Indonesians and 60% of Filipinos do not have a bank account!
In a region where the payments are underdeveloped, solving this is key to dominating commerce.
A deep dive into SeaMoney and its opportunities 🧵
To visualize SeaMoney's potential, it's important to look at the OG of digital wallets: Alipay.
It launched in 2004 as the mobile payment solution to enable Alibaba's e-commerce platform.
Today, they have expanded into everything—wealth management, consumer financing, and more.
It launched in 2004 as the mobile payment solution to enable Alibaba's e-commerce platform.
Today, they have expanded into everything—wealth management, consumer financing, and more.
Today, they take more than 10x Visa's volume and charge only a fraction of the fees!
Alipay charge a 0.55% transaction fee, significantly lower than the 3% to 4% charged by credit cards.
Alipay charge a 0.55% transaction fee, significantly lower than the 3% to 4% charged by credit cards.
In a region where consumers and merchants are cost-sensitive, minimizing transaction fees is imperative for onboarding.
Look at the amount of fees charged for my first sale on Shopee, it's minuscule compared to what I'm charged on Amazon's platform!
Look at the amount of fees charged for my first sale on Shopee, it's minuscule compared to what I'm charged on Amazon's platform!
Back to Indonesia, without an established payment infrastructure, consumers made payment for e-commerce largely via:
(1) bank transfers and
(2) cash on delivery
(1) bank transfers and
(2) cash on delivery
As you can imagine, bank transfer causes a lot of friction for consumers’ checkout experience.
Enter your login ID > password > merchant's bank a/c no. > OTP and wait for 2 to 3 business days for payments to be received.
It's a nightmare! 🙀
Enter your login ID > password > merchant's bank a/c no. > OTP and wait for 2 to 3 business days for payments to be received.
It's a nightmare! 🙀
This is why solving payments is critical—the average shopping cart abandonment rate is 74.52%
Research shows that cart abandonment significantly increases if the checkout process takes more than 2 to 3 minutes.
Bank transfers won't cut it! Especially for major sales events.
Research shows that cart abandonment significantly increases if the checkout process takes more than 2 to 3 minutes.
Bank transfers won't cut it! Especially for major sales events.
Also, there is a lack of trust between online buyers and sellers.
Buyers may be at risk of getting fake goods and sellers risk receiving counterfeit bills or no-shows upon delivery.
Buyers resisted buying online and sellers hesitated to sell their products online.
Buyers may be at risk of getting fake goods and sellers risk receiving counterfeit bills or no-shows upon delivery.
Buyers resisted buying online and sellers hesitated to sell their products online.
With ShopeePay, Shopee launched Shopee Guarantee.
Payments are held in Shopee’s escrow account and released only after orders are fulfilled.
This reassures sellers that buyers have put up the money and buyers that their money can be recovered if they don’t receive the goods!
Payments are held in Shopee’s escrow account and released only after orders are fulfilled.
This reassures sellers that buyers have put up the money and buyers that their money can be recovered if they don’t receive the goods!
SeaMoney offerings:
1. Payments: Mobile Wallets and Offline Payment Services
2. Financing: Consumer Loans, Cash Loans and Seller Financing
1. Payments: Mobile Wallets and Offline Payment Services
2. Financing: Consumer Loans, Cash Loans and Seller Financing
ShopeePay and Airpay are mobile wallets.
It provides users with easy access to digital payment services—online payments, top-up wallets, transfer and withdraw funds, and make payments offline.
It provides users with easy access to digital payment services—online payments, top-up wallets, transfer and withdraw funds, and make payments offline.
Mitra and AirPay are offline payment services.
It helps bring communities into the digital economy by enabling users to conveniently top-up their mobile wallets, purchase digital goods, and enjoy other digital payment services at their local stores within their communities.
It helps bring communities into the digital economy by enabling users to conveniently top-up their mobile wallets, purchase digital goods, and enjoy other digital payment services at their local stores within their communities.
Riding on the “Buy Now Pay Later” (BNPL) popularity amongst millennials, Shopee PayLater (SPayLater) is a consumer financing solution that allows users to postpone payments via installments and financing—at checkout or retroactively.
Spinjam (Shopee Cash Loans) is a digital financing solution for consumers in Indonesia to take a lump sum loan.
In their earnings call, Yanjun Wang, CCO repeatedly highlighted that the most efficient way of growing the SeaMoney business, in particular, the e-wallet business, is to grow the company’s ecosystem of use cases on Garena suite of games, Shopee eCommerce, and offline channels.
SeaMoney will focus on using data to understand user behavior and drive efficiency, high-quality lending and manage the user experience. The company sits on a treasure trove of data with most millennials having used at least one of their applications, Garena Free Fire and Shopee.
With banking licenses secured for Singapore and Indonesia, Sea Limited look forth to strengthen its presence in the region's digital economy.
Here is what management has to say 👇
Here is what management has to say 👇
Sea Capital was formed after acquiring Composite Capital Management, led by former Hillhouse Capital partner David Ma.
We can expect Sea Capital to model after Tencent's strategy of buying into promising tech companies in the region.
We can expect Sea Capital to model after Tencent's strategy of buying into promising tech companies in the region.
The biggest risk for SeaMoney is probably regulatory risk.
For e.g., AirPay was shut down in Indonesia because of a 2017 regulation that barred top-up payments, effectively destroying their service overnight.
Since then, $SE has obtained the license and rebranded as ShopeePay.
For e.g., AirPay was shut down in Indonesia because of a 2017 regulation that barred top-up payments, effectively destroying their service overnight.
Since then, $SE has obtained the license and rebranded as ShopeePay.
With that, I wrapped up my analysis of Sea Limited $SE.
If you've enjoyed this, be sure to check out my comprehensive thread on Garena.
If you've enjoyed this, be sure to check out my comprehensive thread on Garena.
https://twitter.com/SteadyCompound/status/1414394128243195907
And be sure to check out my comprehensive thread on Shopee as well!
https://twitter.com/SteadyCompound/status/1423797024453844995
Tagging fellow fintwitters who may be interested in this SeaMoney's thread!
@BahamaBen9
@JoshuaTai0427
@Prof_Kalkyl
@LiviamCapital
@RamBhupatiraju
@EugeneNg_VCap
@trevmuchedzi
@reshoftc
@BahamaBen9
@JoshuaTai0427
@Prof_Kalkyl
@LiviamCapital
@RamBhupatiraju
@EugeneNg_VCap
@trevmuchedzi
@reshoftc
ShopeePay most recent user acquisition tactic.
Pay $0.01 for a discount of $0.99 to $1.99 when making payment at merchants!
Pay $0.01 for a discount of $0.99 to $1.99 when making payment at merchants!
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