Shopee is tough for sellers, so why does Tiger Global keep buying?
Originally written in Chinese. Translated with AI, reviewed by Gary. Read the Chinese original →
Today I happened to see a chart of Chase Coleman's (Tiger Global) holdings, and I almost didn't believe it: the Sea position was worth over US$2 billion, even bigger than Amazon or Google.
Honestly, my first reaction was: "Huh? Isn't Shopee having a hard time?"
My impression of Shopee used to be burning cash, subsidies and loss after loss.
Plenty of sellers around me complain: commissions keep going up, margins get squeezed, and you still have to keep buying ads, or you get no traffic.
My gut said this model didn't look very healthy.
And yet a top fund like Tiger Global keeps buying more.
Why?
I tried to break it down:
1. Higher commissions → only big brands can afford to play
Shopee's logic is no longer "everyone does it together". It's moving towards a big shopping-mall model.
- Small sellers get pushed out.
- Big brands stay, paying high commissions and buying ad space on top.
It's similar to how malls increasingly rely on Zara, Uniqlo and Starbucks. Rent isn't the main profit; the real money comes from big brands' ongoing spending.
2. Ads become the cash cow
Commission is only the base income. Ads are where the profit comes from.
If sellers want exposure, they have to buy Shopee Ads. Ad revenue is already at the core of Shopee's profitability.
3. A digital finance loop
On the user side, ShopeePay and SeaMoney handle payments, instalments and loans.
That means users' money stays on the platform. It isn't just one-off transactions, it's a financial cycle.
Shopee's story has been rewritten:
- It's no longer subsidies in exchange for growth, but commission + ads + finance, all three together.
- The platform is no longer "anyone can do it", but is moving towards brands and concentration at the top.
When Chase Coleman bets this heavily, maybe what he sees isn't today's Shopee, but a Sea that is becoming "Southeast Asia's mall + ad platform + financial wallet".
Of course, I still think there's a twist to come.
AI commerce is rewriting the rules of the game:
- Users won't necessarily need to scroll Shopee pages themselves.
- Say one sentence to an AI, and an AI agent can compare prices and place the order.
- The "ad traffic entry point" that platforms depend on could be swallowed by AI.
In the short term, AI may help Shopee become more efficient (logistics forecasting, more accurate ad recommendations).
But in the long term, it could shake Shopee's foundations: if the traffic entry point isn't Shopee but AI, the value of ads will fall.
I find this really interesting:
- To us, Shopee is a hard place to do business;
- To the big players, Sea is infrastructure for the next ten years.
High commissions, brands paying the bill, ads as the cash cow, a closed financial loop... these are Shopee's moats.
But can they hold up against AI rewriting e-commerce? That remains to be seen.