Its growth is gradually cooling off, but it's still growing a lot faster than most other major e-commerce companies.
Shopee scaled back its overseas expansion over the past year, but its core Southeast Asian market still has plenty of room to grow. IDC Financial Insights expects the region's number of e-commerce users to rise from 222 million in 2020 to 411 million in 2025. Bain & Company believes the GMV (gross merchandise volume, or the value of all goods sold) across the Southeast Asian e-commerce market will nearly double from $120 billion in 2021 to $234 billion in 2025. Those rosy forecasts suggest Shopee can easily generate high double-digit sales growth for the foreseeable future.
Sea generated another 9% of its revenue from its digital financial services (DFS) segment, which houses its SeaMoney digital wallet and other fintech services, in its latest quarter. It started disclosing the segment's revenues separately in 2021, when its revenue skyrocketed 711%.
Its DFS revenue rose 360% year over year in the first quarter of 2022, then grew another 214% in the second quarter. SeaMoney ended the second quarter with 52.7 million quarterly active users across all its services, which represented 53% growth from the previous year. That growth makes it a promising play on the expansion of Southeast Asia's digital wallet market, which IDC believes will grow from 154 million users in 2020 to 404 million users by 2025.
Sea's total revenue rose 101% in 2020 and 128% in 2021, and analysts expect its top line to grow at a CAGR (compound annual growth rate) of 24% from 2021 to 2024 -- which implies its annual revenue will nearly double.
Yet Sea's stock still trades at less than two times this year's sales, which makes it more comparable to a struggling brick-and-mortar retailer like GameStop instead of a high-growth e-commerce company. Therefore, it could easily double or triple from these levels if it finally impresses the market again.
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