Divya Kothiyal

Divya Kothiyal asked about Sea Limited's new market entry strategy, specifically the rationale behind closing cross-border operations in Latin America while re-entering Argentina. Divya also sought to understand the milestones for Argentina before localizing the business and its priority for 2026. Furthermore, Divya inquired about market share movements in ASEAN during Q3 and the outlook for Taiwan, including potential increases in marketing spend and the impact of cross-border competition from platforms like Taobao.

Answer

Management, primarily Tony Hou (CFO), stated that new market entries are highly selective and early-stage, with Argentina leveraging existing Brazil infrastructure for operational synergies and minimal incremental investment. The wind-down in Chile and Colombia was part of a review to focus resources on key priorities. For ASEAN, Tony Hou believes Shopee gained market share in Q3, growing faster than the overall market. In Taiwan, he expressed confidence in Shopee's double-digit growth, strong infrastructure, and competitive advantages, noting less concern about cross-border players due to inherent complexities.

Divya Kothiyal from Morgan Stanley asked about Sea Limited's new market entry strategy, specifically the rationale for winding down cross-border operations in Chile and Colombia while re-entering Argentina. She also questioned the milestones for Argentina's localization and its alignment with 2026 priorities. Additionally, she sought comments on market share movements in ASEAN during Q3 and in Taiwan, including anticipated marketing spend and the impact of cross-border players like Taobao.

Answer

Forrest Li, Chairman and CEO, explained that new market entries are highly selective, with Argentina leveraging existing Brazilian infrastructure for operational synergies and minimal incremental investment. The wind-down in Chile and Colombia was part of a strategic review to focus resources, though Latin America remains an important market. Regarding market share, Li stated that Shopee is gaining share in Southeast Asia, growing faster than the market. In Taiwan, he noted double-digit GMV growth, outpacing the overall market, and expressed confidence in Shopee's leadership despite cross-border competition due to its scale, assortment, pricing, and superior delivery infrastructure.

Divya Kothiyal asked about the upside to e-commerce take rates beyond advertising and the seller response to rising commissions in ASEAN. She also inquired about the FinTech growth strategy in Brazil, including BNPL penetration and how its ramp-up differs from ASEAN.

Answer

Group CFO Tony Hou noted that seller response to commission adjustments has been calm and that competitors have made similar moves. For FinTech in Brazil, he highlighted its importance, with active users and loan books growing over 2x YoY. The strategy involves integrating more external data than in Asia and securing local licenses and funding partnerships to support growth, with BNPL penetration still in the low-double-digit range.

Divya Kothiyal asked for comments on the e-commerce competitive landscape in ASEAN and Brazil and its relation to margin expansion, specifically inquiring about the strategy against TikTok in Brazil. She also requested details on the fintech business in Brazil, including its scale, margin profile, and asset quality management compared to ASEAN.

Answer

Executive Feng Zhimin described the competitive landscape as relatively stable, with margin improvements driven by internal execution rather than competitive shifts. Regarding TikTok's recent launch in Brazil, he stated Sea will monitor developments but will focus on its core strengths of pricing and logistics. For Brazil's fintech business, he noted that SPayLater penetration is growing but still has significant potential compared to Asia. The margin profile is 'in the middle' of Sea's markets, with higher local interest rates offsetting slightly higher risk, and the company has developed a strong grasp of local risk assessment.

Divya Kothiyal questioned the drivers behind the quarter-on-quarter increase in e-commerce sales and marketing expenses and asked about the accelerated growth in the Digital Financial Services (DFS) business, particularly outside of Indonesia.

Answer

Forrest Li, Chairman and CEO, explained the marketing expense increase was due to reinvestment alongside higher take rates and seasonal promotions, not competitive pressure. For DFS, he noted strong growth in Thailand, Malaysia, and Brazil, driven by deeper penetration of Shopee's user base, product optimization, and the expansion of off-Shopee use cases.

Divya Kothiyal asked for clarification on mobility margin pressures beyond product mix, such as competition, and inquired about the outlook for corporate cost savings in 2025 after a strong performance in Q4.

Answer

President & COO Alex Hungate stated that Grab remains the category leader in all mobility markets and has maintained or grown its position, reiterating the 9%+ long-term margin target. CFO Peter Oey explained that while absolute corporate costs will rise with investments in growth (e.g., AI, mapping), the company expects to gain significant operating leverage, forecasting a 200-300 basis point improvement in group EBITDA to revenue margin in 2025.

Divya Kothiyal asked about Mobility margins in the face of new competition in key markets like Singapore, Vietnam, and Thailand. She also inquired about the 2025 outlook for corporate costs and potential drivers for further reduction.

Answer

Chief Operating Officer Alex Hungate stated that Grab's scale and operating leverage provide a strong competitive advantage, making it difficult for new entrants to gain traction. Chief Financial Officer Peter Oey addressed corporate costs, explaining that while they will continue to drive operating leverage, absolute costs will increase with volume. He emphasized that the key metric is corporate costs as a percentage of revenue, which they aim to keep efficient.