It seems that the shopee he doesn’t walk very well with his legs — at least outside Brazil. Then promote actions considered drastic to contain spending, Forrest Lifounder of the group that runs the company, decided to send an email to global employees to explain the moment in which his organization lives and warned: it will tighten its belt even more.
For the CEO, everyone should find ways to reduce operating costs and said that “the more money we save each day, the more time we can buy to weather this storm.”
In addition, Li also enumerated some of the measures he should take to reduce spending. The main points concern the costs with its employees.
Starting in October, all refunds for employee business travel will be limited to economy class flights and $150 per night in hotels.
Also, for international travel, meal expenses can only be up to $30, and for transportation, Li advised using the cheapest available for local services.
Surprisingly, none of the company’s leaders will receive salaries in the next few months until Shopee achieves positive cash flow, as revealed the Bloomberg.
Leadership has decided that we will not receive any cash compensation until the company achieves self-sufficiency. We can now see that this is not a storm that passes quickly: these negative conditions are likely to persist in the medium term.
These attitudes are part of the company’s plan to be self-sufficient, something that still hasn’t happened. For them to start to take effect, however, the measures are estimated to last between 12 and 18 months.
Finally, the entrepreneur tried to calm users down by saying that Shopee has a “solid cash base”, something that puts it “in a safe position”. Even so, he warns that this base can easily be extinguished “if we’re not careful.”
Shopee came from four Latin American countries
Last month, Shopee released its results for the fiscal second quarter of this year, and the numbers don’t seem to have exhilarated executives much.
While the company’s total revenue grew 29%, it posted a net loss of $569.8 million in the second quarter of 2022, worsening the year-over-year losses by 77.4% and triggering red flags.
Interestingly, just over a month later, the Sea Group, the holding company that controls Shopee, announced the closure of activities at Argentina and the reduction of its presence in the Chileat Colombia and not Mexico.
Before that, Shopee had already closed in Indiaat France and on Spain. countries like thailand, Indonesia and Vietnam also saw their cadres diminished.
According to an email in which The Reuters had access, Chris Feng, CEO of Shopee, reported that the “current heightened macroeconomic uncertainty” was the reason for the closures and staff reductions. For him, the company needed to focus its resources on its core operations.
Brazil goes against the grain and has revenue jump
For Shopee store lovers here in Brazil, here’s some good news: our country is heading in the opposite direction and the company doesn’t intend to leave here — at least not officially.
According to the latest fiscal results, only in Tupiniquin lands, the company had a 270% jump in revenue when compared to the same period last year.
Proof of this is that, last June, Shopee decided to open five more centers distribution in different cities of São Paulo, seeking to increase its presence here.