Much like Amazon.com (NASDAQ: AMZN), Sea Limited (NYSE: SE) is a company that benefited from the COVID-19 health crisis in all its businesses. The lockdown brought on by the pandemic saw an increased push towards online spending and entertainment, which in turn drove growth across Sea’s digital entertainment, ecommerce and digital payments divisions.
Sea saw its total adjusted revenue increase nearly 58% year-over-year to $913.9 million in the first quarter of 2020. Adjusted revenues rose 30.3% in digital entertainment and 110.5% in ecommerce.
On its quarterly conference call, Sea stated that the health crisis is driving a meaningful change in the global digital economy with more people moving towards online platforms for their daily needs and that this trend is likely to remain permanent. Looking ahead, the company believes there are significant growth opportunities that it can capture across all its businesses.
“The coronavirus crisis is driving a step change in the growth of the digital economy globally, materially accelerating a shift to online lifestyles that is broad, deep, and, in our view, irreversible. We believe that Sea, as a market leader in some of the key sectors of the digital economy, is gaining and will continue to gain a disproportionate share of the resulting growth in our markets.” – Forrest Li, Chairman and Group CEO
Digital entertainment
Sea’s digital entertainment business Garena saw double-digit increases in quarterly active users and paying users in the first quarter. Quarterly active users stood at 402.1 million. The company’s self-developed game Free Fire saw strong momentum in Q1, which continued into Q2, setting new records for peak daily active users and monthly paying users.
Free Fire’s popularity continues to rise across the world and the company is working on turning it into a bigger platform. The user base continues to increase providing further monetization opportunities going forward. The company is also expected to benefit from its efforts to provide localized content across its regions.
Ecommerce
The company’s ecommerce platform Shopee witnessed strong growth in orders, rising 111% year-over-year. Sea is working on driving up engagement through targeted offerings and the company is also helping new merchants come online to overcome the disruptions to their businesses caused by the pandemic.
Sea is partnering with large brands to meet the increasing demand and to broaden its reach across its user base. The company sees the scale of ecommerce increasing further in the coming months and believes it is well-positioned to capture the growth opportunities.
Digital payments
The digital payments platform SeaMoney saw strong growth as more users shifted to online payments during the pandemic. The platform also benefited from the integration of its mobile wallet services with Shopee.
Looking ahead, Sea expects to see significant growth in digital payments as more people shop online due to the restrictions which in turn opens up the need for digital payment options. The company is also partnering with other firms to expand its services globally. All these efforts are expected to drive growth for SeaMoney going forward.
Click here to read the full transcript of Sea Limited Q1 2020 earnings conference call