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Source: Figure Worm Creative

　　Southeast Asian Internet giant Sea ushered in a dark moment.

　　"The leadership team has decided that we will not accept any cash compensation until the company becomes self-sufficient," Li Xiaodong, the company's founder and CEO, said in an internal memo to employees on September 15.

　　According to public information, the founder Li Xiaodong was born in Tianjin, graduated from the Engineering Department of Shanghai Jiaotong University, and later became a Singaporean. When Sea was making great strides, Li Xiaodong once became the richest man in Singapore, worth US$19.8 billion. It is understood that Sea has three main businesses: e-commerce platform Shopee, game platform Garena and digital finance, which almost have a business structure similar to that of major domestic manufacturers.

　　However, after savage growth in 2021, Sea in 2022 entered an ill-fated Mercury retrograde period.

　　A week ago, news broke that Sea was closing its local operations in Chile, Colombia and Mexico and exiting the Argentine market entirely. On September 6, Tencent Chief Operating Officer Ren Yuxin resigned from the company's board of directors. Earlier, shopee's global business has repeatedly hit a wall. Since 2022, France, India, and Singapore have been closed one after another.

　　Internet giants who spend a lot of money are really poor

　　It's hard to imagine that just six months ago, when most Internet companies began to reduce costs and increase efficiency, Sea's battle for people was in full swing.

　　"The budget is sufficient, and it mainly depends on whether it matches the position." Many employees of the Internet giant received the same recruitment information, and their first impression of this Southeast Asian unicorn was that it was rich. Last year, in order to attract fresh graduates, Sea once gave a group of new recruits a unified monthly salary increase of 5,000 yuan.

　　"The opening is that the annual salary is 600,000, and my psychological expectation is only 300,000." Job seekers who have interviewed for e-commerce business sighed to Times Finance.

　　During the same period, the company's stock price fell sharply. In October last year, Sea’s share price peaked at $366.99 per share, with a market value of $200 billion. This year, Sea gradually fell from the cloud. This year, on January 4, Tencent issued an announcement to reduce its holdings of Sea by 14,492,800 shares. Tencent's shareholding in Sea will therefore drop from 21.3% to 18.7%. Shares have so far shown no signs of rebounding.

　　Even so, the veteran employees are not surprised by this triumphant recruitment wave. Due to the insufficient supply of local talents in Singapore, some core departments have not been able to recruit people for two consecutive years. Recruiting is naturally a top priority.

　　According to the financial report, as of June 30, 2022, Sea general administrative expenses reached $872 million, an increase of 77% from $491 million in the same period last year.

　　Wang Ming joined Shopee, the e-commerce business of Sea in 2018, and has witnessed the explosive period of platform traffic along the way. During this period, Shopee signed contracts with South Korea's top girl group BLACKPINK and internationally renowned star Ronaldo as their endorsers, and opened up the Southeast Asian e-commerce situation with a low-cost model. In 2019, shopee’s traffic overtook Lazada and other Southeast Asian e-commerce platforms, took the top spot among Southeast Asian e-commerce platforms, and took the lead in launching a global expansion plan.

　　However, it is easy to siege a city and difficult to defend. "In April of this year, the ROI of the platform was on a downward trend. Before, the company relied on spending money, but it did not allow users to really settle down. Naturally, the stamina was insufficient." Wang Ming revealed to Times Finance and Economics. The more deadly problem is that the parent company Sea is facing increasing financial pressure, with another large net outflow of $1.2 billion in operating cash this quarter, while the company's inventory cash and equivalents fell to $7.8 billion at the end of the quarter.

　　Amid the tightening of business, layoffs followed. In June of this year, Sea, which was once caught in a battle for people, had to start a layoff plan, and the optimization team included shopeefood and shopeepay in Southeast Asia. At the beginning of September, the personnel optimization list was extended to employees who have just made offers and have not yet joined the company.

　　Games and e-commerce have both slowed down, what has overwhelmed Southeast Asian giants?

　　The performance of Sea's two main businesses, e-commerce and games, is not optimistic. The game business is its cash cow. The e-commerce business that burns money requires continuous blood transfusion from the game business, but Sea's game business cannot support the company's stable revenue. source.

　　The second quarter financial report shows that the game division Garena's revenue was US$900 million, a year-on-year decrease of 12%. The running water dropped by 40% year-on-year to US$717 million, which was lower than the expected 740 million; the gross profit margin also fell from 73% to 71%. Quarterly active users reached 619.3 million, down 14.6% year-on-year.

　　To make matters worse, the loss of the e-commerce business is still further expanding. According to the financial report, Shopee lost $648 million in the second quarter, compared with a loss of $580 million in the second quarter of 2021. During the same period, Shopee achieved a GMV of US$19 billion, and the year-on-year growth rate further fell to 26%, which was lower than the expected US$19.9 billion. At the same time, shopee's order growth rate also fell from 73% in the previous level to 59%.

　　During the 99 big promotion that just passed, some sellers responded to Times Finance and obviously felt that the overall traffic on the platform was decreasing. The order volume of the big promotion was about 5 times that of the daily sales, and 8 times the results in previous years. "The technical team is immature, and the seller's back-end system often crashes."

　　Not only that, the e-commerce competition in Southeast Asia is still in the white-hot stage. Since May this year, lazada, shopee’s nemesis, has received nearly 1.3 billion US dollars in capital investment from Alibaba. Ferocious.

　　The instability of the company's business has forced shopee employee Qin Zhong to consider the issue of leaving and staying. "The stability of a company's basic market is more important. Without stable business support, no matter how high the stock price is, it will be broken one day."