Thai e-marketplaces Shopee and Lazada shift to profitability

The e-commerce landscape in Thailand experienced a significant shift as major players Shopee and Lazada reported profits for the first time in almost a decade. This change has been attributed to careful spending, operational adjustments, and increased service fees.

In 2022, Shopee recorded a profit of 2.4 billion baht, while Lazada posted a profit of 413 million baht. Shopee’s revenue reached 21.7 billion baht, with Lazada following closely at 20 billion baht. Lazada first reported a profit in 2021, while Shopee underwent a restructuring process last year after eight years in the Thai market, according to Pawoot Pongvitayapanu, CEO of data analytics firm Creden.co.

Creden’s data reveals that Sea Group’s Shopee (Thailand) generated 21.7 billion baht in revenue in 2022, a 62% increase year-on-year, with profits growing by 147% to 2.38 billion baht. In contrast, Shopee reported losses of 4.9 billion baht in 2021, even as revenue grew by 62.9% to 13.3 billion baht.

When considering the nine subsidiaries under Sea Group in Thailand, their combined revenue in 2022 amounted to 55 billion baht, with a profit of 2.5 billion baht. In 2021, their revenue was 43 billion baht, with losses of 5.9 billion baht.

Shopee was the largest contributor to Sea (Thailand)’s revenue and profit in 2022. Last year, Shopee Express (Thailand) reported a profit of 932 million baht and revenue of 16 billion baht. In 2021, Shopee Express generated the highest revenue for Sea at 15 billion baht, alongside losses of 289 million baht.

Lazada reported its second consecutive year of profit in 2022, with 413 million baht, an 82% increase, while revenue rose 40.8% to 20.6 billion baht. In 2021, Lazada’s profit grew by 105% to 226 million baht, with revenue increasing by 46.6% to 14.6 billion baht. Pawoot said…

“Lazada was the market leader in 2021 in terms of revenue, but in 2022 Shopee surpassed its rival.”

Both Shopee and Lazada increased their service fees in 2021 from 1% to 2%, and again in April 2023 from 2.14% to 3.21-4.28%, depending on product categories.

Visanu Vongsinsirikul, secretary-general of the Trade Competition Commission of Thailand, previously stated that if both companies raised their fees simultaneously and offered identical fees on multiple occasions, it could be considered a violation of sections 54 and 72 of the Trade Competition Law, resulting in a fine equivalent to 10% of their revenue, reported Bangkok Post.