Thailand's e-marketplace players are shifting to profitability after almost a decade of losses, attributed to cautious spending, operating adjustments and increasing service fees.
Shopee posted a profit for the first time in 2022, tallying 2.4 billion baht, while Lazada recorded profit of 413 million baht. Shopee posted revenue of 21.7 billion baht, followed by Lazada with 20 billion baht.
Lazada was the first player to post a profit, doing so in 2021, while Shopee restructured last year, adjusting its operations after eight years in the Thai market, said Pawoot Pongvitayapanu, chief executive of data analytics firm Creden.co.
According to Creden's data, Sea Group's Shopee (Thailand) generated revenue of 21.7 billion baht in 2022, growth of 62% year-on-year, while its profit grew by 147% to 2.38 billion baht.
In 2021, Shopee posted losses of 4.9 billion baht, while revenue grew by 62.9% to 13.3 billion.
When combining the nine subsidiaries under Sea Group in Thailand, their total revenue in 2022 was 55 billion baht, with profit of 2.5 billion baht. In 2021 their revenue was 43 billion baht with losses of 5.9 billion baht.
Shopee accounted for the largest proportion of revenue and profit for Sea (Thailand) in 2022. Last year Shopee Express (Thailand) turned a profit of 932 million baht, with revenue of 16 billion baht.
In 2021, Shopee Express generated the most revenue for Sea with 15 billion baht, alongside losses of 289 million baht.
Lazada posted its second year of profit in 2022 with 413 million baht, growth of 82%, while revenue increased 40.8% to 20.6 billion baht.
In 2021, Lazada profit grew by 105% to 226 million baht, with revenue up by 46.6% to 14.6 billion baht.
"Lazada was the market leader in 2021 in terms of revenue, but in 2022 Shopee surpassed its rival," said Mr Pawoot.
Both Lazada and Shopee raised their service fees last year from 1% to 2%, and again in April 2023 from 2.14% to 3.21-4.28%, depending on the product categories.
Visanu Vongsinsirikul, secretary-general of the Trade Competition Commission of Thailand, earlier told the Bangkok Post that if both these companies raised their fees at the same time and offered the same fees on multiple occasions, this could be considered a breach of sections 54 and 72 of the Trade Competition Law, triggering a fine equivalent to 10% of their revenue.