Shopee announced the development to its local team in a companywide town hall on Monday, saying it will cease to operate in India immediately.
Shopee, a Singapore-based e-commerce company, has chosen to shut its operations in India barely six months after launching there.
Shopee communicated the news to its local workforce on Monday during a companywide town hall, stating that it will suspend operations in India immediately.
The etailer, which competes with Meesho, Flipkart, and Amazon India, notably at the lower end of the market, would close its doors on March 29, they stated.
A Shopee spokesperson said, “In view of global market uncertainties, we have decided to close our early stage Shopee India initiative.”
Following its recent entry into Europe, Shopee withdrew from France earlier this year.
Shopee’s departure comes just days after the Indian government banned its parent company Sea’s gaming app Free Fire as part of a broader crackdown on Chinese applications. While Sea is located in Singapore, the company has come under scrutiny because of its Chinese connections, notably a Tencent investment.
According to at least two individuals, the government’s inspection of Sea’s Free Fire app added to the uncertainty of Shopee’s future in India, and this was also taken into account when the decision to pull the plug was made.
Sea’s stock price on the New York Stock Exchange (NYSE) was down approximately 6% on Monday, at $116.12 per share, after falling below $100 earlier in the month. After India banned its gambling software, the company’s market value dropped by more than $16 billion.
On Monday, Shopee informed merchants that sell on its platform of its plan to close shop.
The move is surprising given Shopee’s strong intentions for the India market and substantial discounting to compete with established behemoths.
Trader organisations such as the Confederation of All India Traders (CAIT) have appealed to the government, accusing Shopee of having Chinese investments and failing to follow Indian laws. CAIT has also filed a complaint with India’s anti-trust regulator, the Competition Commission of India, alleging unfair pricing on its website. However, the case was recently dismissed.
Meanwhile, Shopee has advised its India merchants that services such as payments, refunds, returns, and disputes, among other things, will remain functioning till May 30. Existing orders will also be transported and handled in accordance with the process, according to the notice to vendors.
Shopee had over 300 employees in India as of December 2021, with over 20,000 sellers. While the firm was adding new employees and sellers, these figures have not altered significantly since then.