Sea Limited's Shopee Reshaping its Growth Story for Success in 2023

Sea Limited's Shopee Is Back on Track With Its Sustainable Growth Strategy

The company's e-commerce segment has made solid progress with its new strategic direction. Sea Limited (NYSE: SE) reached a milestone in 2023 as it delivered its first-ever profitable year. Revenue grew 5% to $13.1 billion, while net income reached $163 million, compared to a net loss of $1.7 billion in 2022.

Shopee stepped on the brakes of its growth machine

Key to its growth was the enormous cash flow from its gaming company, Garena, and cheap external funding for its e-commerce venture. Shopee's growth-at-all-costs strategy, which helped it gain enormous market share, ended up proving too costly.

Shopee is accelerating its growth but at a more sustainable pace

This time around, however, Shopee aims to grow within its means, and there are signs this new strategy is gaining traction. After a few years of instability, Shopee seems to have found a growth pace it can sustain over time.

What it means for investors: Management has guided for Shopee to grow GMV in 'the high-teens range' in full-year 2024, and its adjusted EBITDA will turn positive again in the second half of this year.