Q1 2025 Sea Ltd Earnings Call
Good morning and good evening to all and welcome to the Sea Limited first quarter at 2025 Results Conference call. All lines have been placed on mute to prevent any background noise.
After the speaker's prepared remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, press star and one again. For operator assistance,
Please press star and zero, and finally, I would like to advise all participants that Ms. Koh is being recorded. Thank you. I'd like to welcome Mr. Elsa Choi to begin the conference. Please go ahead.
Elson Choi: Hello, everyone, and welcome to CES 2025 Plus 430's conference call. I'm Elson from CES Investor Relativity.
On this call, we may meet forward-looking statements which are inherently subject to risk and uncertainties and may not be realized in the future for various reasons as stated in our press release.
Elson Choi: Also, this car includes the discussion of certain non-get financial measures such as Adjust Abidav.
Elson Choi: We believe these measures can entounce our investors' understanding of the actual cash flows of our major businesses when used as a compliment to our gap disclosure.
Elson Choi: For a discussion of the use of non-GAAP financial measures and reconciliation with the closest GAAP measures , please refer to the section on non-GAAP financial measures in our press release.
Elson Choi: I have with me C. Chairman and Chief Executive Officer, Forrest Li, President Chris Feng, and Chief Financial Officer Tony Hou.
Speaker Change: Our management will share strategy and business updates, operating highlights and financial performance for the first quarter of 2025. This will be followed by a Q&A session in which we welcome any questions in touch. With that, let me turn the call over to follow it.
Hello everyone, and thank you for joining today's call.
Speaker Change: We have delivered another great quarter of strong growth with improving profitability across all three businesses.
Speaker Change: Our businesses are now all self-sufficient and cash generating, positioning us well to capture future opportunities.
Speaker Change: Our strong start to the year gives us more confidence of achieving our full-year guidance.
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Speaker Change: Five days ago, on May 8th, we celebrated 16th anniversary.
Speaker Change: On the same day, we rebranded our digital financial services business from Srimani to Money, spelled M-O-S-E-E.
Thank you for tuning in. See you next week.
Speaker Change: We chose the name Money because it is simple, cute, and just like our company's name, Sea, easy to write and pronounce.
Speaker Change: Mani also resonates well with the name of its sister brand, Shopee, reflecting the stimulus, synergetic connection between the two ecosystems.
Speaker Change: Our digital financial services business already has a decade-long history, from air pay to shocky pay to ask pay later and to all of money's other products and services today. We create solutions that are simple, accessible and inclusive.
Speaker Change: We use technology to enable all our communities to join the digital economy and manage their money more easily.
will remain grounded in this principle as we move forward.
Speaker Change: Today, money is already one of the largest unsecured consumer landing businesses in Southeast Asia, and I believe we are only at the start of realizing its full potential.
Speaker Change: Will we help people achieve their financial goals? It can be live-changing, not just for them today, but for their children and grandchildren as well.
Speaker Change: We are excited and committed to creating financial freedom and empowerment for consumers and small businesses with technology, both for this generation and the generations to come.
Starting with e-commerce.
Speaker Change: Shopee has delivered a record-high GMB and a cross-order volume in the first quarter.
Speaker Change: We suspend marquee leadership with improved profitability across both Asia and Brazil.
Speaker Change: Unique Economics, improved, largely driven by our continued skill expansion, cost optimization and enhanced monetization, especially from advertising.
Speaker Change: Head revenue group are more than 50% year on year in the first quarter.
Speaker Change: Our operational priorities remain consistent, to enhance price competitiveness, improve service quality, and strengthen our content ecosystem.
Speaker Change: Our strong execution of these priorities has continued to make Sharpie competitive and
Speaker Change: On price competitiveness, our diverse product range and competitive pricing continue to resonate well with bears.
Speaker Change: Our ability to deliver a clear price advantage over our peers comes from our closer
Speaker Change: In the first quarter, our average monthly active buyers on Shopee grew by over 15% year-on-year.
Speaker Change: Our service quality, logistics continue to be integral to our ability to deliver better and more reliable service to our customers.
Speaker Change: We further strengthen this value proposition in the quarter with both cost reduction and service quality improvement.
Speaker Change: In the first quarter, we reduced the shop its overall logistics cost per order by 6% in Asia and 21% in Brazil, year on year. We are continuing to improve delivery times and expand network coverage.
Speaker Change: These efficiencies enable us to pass on greater savings to buyers while providing a similar and reliable
Speaker Change: In addition to these proud measures, we constantly explore and pilot new initiatives, delivering value, targeted, and expensive customer needs.
Speaker Change: For example, in some of Indonesia's major cities, we offer an instant delivery option that delivers orders in just a few hours.
Speaker Change: In the first quarter, we also piloted a Shopee VIP membership program in Indonesia to better serve our most loyal users.
Speaker Change: This paid membership program includes benefits such as unlimited free shipping, upsides the discount vouchers, and the priority customer service.
Speaker Change: Adoption has been encouraging, with more than 1 million users, subscribing has stopped the end of March.
Speaker Change: My best purchase to more than three times that frequently, and to spend more than four times as much as regular buyers.
Speaker Change: This suggests some examples of how we continue to experiment with value-adding features to strengthen fire engagement and thickness.
Speaker Change: Our upgraded ATEC product, called GMV Max, has also made it easier for sellers to launch campaigns, reach the right audience and maximize their returns.
Speaker Change: In the first quarter, the number of sellers who spend on our ad products increased by 22% an average ad spent increased by 28% year on year.
Speaker Change: We continue to make good progress with our content ecosystem, and it is playing an increasingly important role in driving buyer engagement and conversion.
Speaker Change: In Southeast Asia, content-driven orders, including those from live streaming and short videos, accounted for about one fix of our total physical goods order volume in the first quarter.
Speaker Change: Unit economics also continued to improve, supported by growing scale, larger average basket size, better marketing efficiency, and higher adoption of shop-y life items.
Speaker Change: We are also seeing strong traction from our partnership with YouTube, which we have expanded to all six of our Southeast Asian markets.
Speaker Change: As of March, over 4 million YouTube videos had shoppy product links embedded, and average daily orders attributed to YouTube content continue to rise steadily.
Speaker Change: This partnership has strengthened our relationship with creators who can now more easily monetize their engagement.
Speaker Change: while also allowing our centers to tap on the high traffic YouTube platforms for sales.
Speaker Change: Beyond Asia, Brazil continues to show encouraging results. The pace of our user-based expansion continued to outpace the market average as we gained market share, and we remain at just the EBITDA positive.
Speaker Change: Looking ahead, we see plenty of runway for further growth in Brazil, and we remain committed to capturing the long-term opportunities in this market.
Speaker Change: In summary, Sharpie has started 2025 on very strong footing, delivering high growth while improving profitability across our market.
Speaker Change: With solid first quarter results, we remain confident of achieving our clear GMB growth guidance of 20% with improving profitability.
Transcription by ESO. Translation by —
Next, turn into digital financial services.
Speaker Change: In the first quarter, money delivered another strong set of results, with both revenue and adjusted Yibita growing more than 50% year-on-year.
Speaker Change: This growth was delivered while maintaining stable asset quality, reflecting our continued commitment to prudent risk management.
Speaker Change: In the first quarter, our Lungbuk Group by over 75% year-on-year to reach $5.8 billion, mainly driven by the healthy expansion of our user base.
Speaker Change: In the first quarter, we added over 4 million first-time borrowers, and we see new user cohorts continuing to generate a positive perfect over time as we scale.
Speaker Change: By the end of the quarter, active users for our consumer and SME loan products exceeded 28 million, representing more than 30% growth year-on-year.
Speaker Change: At the same time, our overall portfolio quality remains healthy, with our 90-day NPL ratio
Risk Management Remains Our Top Priority
Speaker Change: Retake a proactive and dynamic approach to credit risk management, leveraging life insights from our ecosystem and closely tracking repayment trends across user cohorts.
Speaker Change: Our deep roots in local markets serving a massive user base gives us the unique advantage of first-hand data, letting us evaluate market conditions in real-time.
Speaker Change: With short long tenures of typically three to six months, we can't adjust underwriting thresholds, credit limits, and pricing parameters quickly in response to macroeconomic changes.
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Speaker Change: In the first quarter, we made good progress across various markets.
Speaker Change: In Thailand and Malaysia, as pay later campaigns with Shopee, effectively joked new user acquisition and further increased penetration on Shopee.
Speaker Change: Brazil also delivered robust loan book growth in the first quarter, driven by both as paylatures higher penetration on Shopee and the growing contributions from buyer cash loans.
Speaker Change: We also continue to low out new products and strengthen our underwriting capabilities, enabling us to serve a wider range of users across different risk profiles and credit needs.
Speaker Change: For example, in the first quarter, we saw strong growth from credit products with lower interest rates, higher credit limits and longer tenures in markets such as Indonesia and Malaysia.
Speaker Change: These products are helping us attract more higher income users who may be more selective in their adoption of credit products.
Speaker Change: Having a larger cohort of premium users gives a significant core selling opportunities and higher customer lifetime value.
Speaker Change: Taken together as we continue to grow our credit penetration in more markets, serving more users. We are cautiously constructing a long portfolio with better diversification across markets and user segments.
Speaker Change: This lets us maintain good access quality which benefits our long-term growth and profitability.
Speaker Change: While the Shopee ecosystem remains an effective funnel for user-application and underwriting insights, money is steadily expanding its reach beyond Shopee.
Speaker Change: In Malaysia, off-shoppy usage of S.Pay later has grown meaningfully by leveraging shoppy-based merchant network and through targeted marketing campaigns that strengthen consumer mentorship
Speaker Change: Off-shopping at a later loan, now accounts for over 10% of our total loan book in Malaysia.
Speaker Change: We are seeing healthy repayment behavior with off-shocky as pay later loans and the unique
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Speaker Change: In Indonesia, off-shoppy growth has also been boosted by the standalone shoppy pay financial services app which has surpassed 30 million downloads as of March.
Speaker Change: The app supports everyday payments beyond the Shopee platform. It seamlessly integrates as a later functionality to enable the use of credit for off-shoppy purchase.
Speaker Change: We continue to enhance the app with new features to drive user engagement and position it as a central hub for daily financial activities.
Speaker Change: This lays a strong foundation for cross-sounding a broader suite of financial products and services in the future.
Speaker Change: In summary, money is on the red track to continue delivering strong local growth while maintaining sound credit quality, and we are confident of achieving our full year guidance.
Speaker Change: As we scale, we remain focused on risk management as a top priority.
Speaker Change: Giving our unique business model and the strong support we have from our shoppy ecosystem, we are confident that we can grow money in a way that is resilient to credit cycles and profitable into the long term.
Jiong Shao, Jiong Shao,
Next, turning to digital entertainment.
Speaker Change: Garina had a stellar start to 2025, which is best to quarter since 2021.
Speaker Change: In the first quarter, Marina's total bookings grew 51% and adjusted EBDA, grew 57% year on year.
Speaker Change: In addition to Freepar, our other games, such as Arena of Valor, EA Sports FC Online, and Koth Beauty Mobile, have also had a good start in the first quarter, giving Arena strong growth outlook for the year.
Speaker Change: In January , we launched a free-fart collaboration with Naroto Shippuden. This was our biggest ever anime I.P. collaboration to date.
Speaker Change: We spent over two years with the IP partner preparing for this major campaign.
Speaker Change: We came up with a comprehensive suite of content and features such as special moves, character inspired by our both, and recognizable things from the animation.
Speaker Change: Our development team put a lot of effort into upgrading our character models to introduce the intricate finger movement and the hand signs that are iconic to the anime.
Speaker Change: This went a long way to bringing authenticity and the sensation of the anime into free fire.
Speaker Change: The Naruto campaign was a resounding success with extremely positive feedback from our gamer communities around the world.
Speaker Change: The collaboration's strong social phenomenon allows free fire to not only capture new users but also reactivate turned players.
Speaker Change: Thanks to the huge success of the collaboration, FreeFart average DAU in the first quarter was closed to its peak quarterly average DAU during the pandemic.
Transcription by CastingWords
Speaker Change: Beyond a Naruto campaign, our focus on hyper-local content continues to drive strong user engagement by connecting with players through their culture and daily lives.
Speaker Change: In the first quarter, three parts celebrated Ramadan through specific, specifically designed in-game missions in Indonesia, allowing players to contribute real-world donations of clothing and food.
Speaker Change: Turning the gameplay into a shared act of generosity during the holy month.
This resonates very positively with our gamer community.
Speaker Change: In a ring of valor, we brought community spirit to life by organizing offline floaters in Taiwan during the culturally significant Madu Pibri page.
Speaker Change: and Lighting Blessing Candles at Tampos on behalf of users during Lunar New Year.
Speaker Change: The responses to these events on social media have been overwhelmingly positive.
Speaker Change: This initiative shows how our local team proactively transform our games into platforms where culture revelants meet social impacts.
Jiong Shao, Jiong Shao,
Speaker Change: Beyond our existing games, we are growing our portfolio to deepen our capabilities and skill our market presence.
Speaker Change: In April , we published a Delta Force Mobile, a Force Person Tactical Shooting Game, Across Markets in Southeast Asia, Mina, and Latin America.
Speaker Change: Since lunch, the game has seen good traction with over 10 million downloads.
Speaker Change: We have also started pre-registration for Free City, a self-developed open-world adventure game and will launch it in business beginning in May.
Speaker Change: We are confident that these new launches will deepen user engagement with our gamer community across our market.
2013. http://www.youtube.com.uk
Speaker Change: In summary, Karina had a very strong start to the year. We will continue to drive free-fast popularity and longevity and expand our game portfolio for all those sustained growth.
Speaker Change: We remain confident of delivering our guidance of double-digit growth for grainless user base and bookings in 2025.
Speaker Change: Xinhua News Agency, Copyright © 2021 Xinhua News Agency All Rights Reserved.
Speaker Change: In closing, we are very happy with this strong start to 2025. All three of our businesses have shown strong growth and improving profitability.
We remain committed to executing well and driving greater efficiency.
We look forward to delivering a strong 2025 and beyond.
Thank you as always for your support.
With that, I invite Tony to discuss our financial.
Jiong Shao, Jiong Shao,
Speaker Change: Thank you, Forrest, and thanks to everyone for joining the call.
Speaker Change: Overall, total gap revenue increased 30% year-on-year to $4.8 billion in the first quarter of 2025. This was primarily driven by GME growth of our e-commerce business and the growth of our digital financial services business.
Speaker Change: Our total adjusted EBITDA was $947 million in the first quarter of 2025, compared to an embassy of $400 and $1 million in the first quarter of $424.
Transcription by ESO. Translation by —
Speaker Change: On e-commerce, Xiaodong Li's growth orders grew 20% year-on-year to $3.1 billion to $3.1 billion in the first quarter of 2025, and GMV increased by 22% year-on-year 28.6 billion in the first quarter of 2025.
Speaker Change: Our first quarter gap revenue of $3.5 billion included gap marketplace revenue of $3.1 billion, up 29% year-on-year and gap product revenue of your phone for $4.5 billion.
Speaker Change: Within God's marketplace revenue, core marketplace revenue, many consisting of transaction-based fees and advertising revenues, was $2.4 billion, up 39% year-on-year.
Speaker Change: e-commerce adjusted EBITDA was $264 million in the first quarter of 2025, compared to an adjusted EBITDA loss of $22 million in the first quarter of 2024.
Speaker Change: Digital Financial Services, Gap Revenue, was up by 58% year to $787 million.
Speaker Change: Adjusted EBITDA was up by 62% young years to $211 million.
Speaker Change: As of the end of March, our consumer and SME loans' principal outstanding reached $5.8 billion up over 75% year-round year.
Speaker Change: This consists of 4.9 billion dollars, Unwook, and 0.9 billion dollars, off-cook's loans, [inaudible]
Speaker Change: Non-performing loans passed due by more than 90 days as a percentage of total consumer and SME loans was 1.1% at the end of the quarter.
Xiaodong Li, Miang Koh, Xiaodong Li, Unknown Executive, Tianyu Hou
Speaker Change: Digital entertainment bookings were $775 million in the press quarter, up 51% here on the air.
Gap Revenue was $496 million. Adjust the EBDA was $4358 million.
Returning to our consolidated numbers.
Speaker Change: We recognize a net's not-operating income of $89 million in the first quarter of 2025, compared to a net's not-operating loss of $18 million in the first quarter of 2024.
Speaker Change: We had a net income tax expense of $136 million in the first quarter of 2025, compared to net income tax expense of $179 million in the first quarter of 2024.
Speaker Change: As a result, Net income was $411 billion in the first quarter of 2025, as compared to a net loss of $23 million in the first quarter of 2024.
Speaker Change: Thank you, Forrest and Tony. You are now ready to open the call to questions. Operator?
Speaker Change: Thank you. We are now opening the floor for a question and answer session. If you would like to ask a question during this time, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star and number one again. [inaudible]
Speaker Change: India Interested Time, We Will Take A Maximum Love Two Questions At A Time From Each Colour. If you wish to ask for more questions, please request to join the question queue again after your first question has been addressed.
Speaker Change: At this time, we will pause for a brief moment to wait for the questions to come in.
Transcription by ESO. Translation by —
Speaker Change: Your first question comes from the line of Pang Vitt of Goldman Sachs, Your Line is now open.
Transcription by ESO. Translation by —
Pang Vitt: Hi, good evening, management. Thank you very much for the opportunities and congratulations for a strong set of numbers.
Two questions from me. Number one on Shopee.
Speaker Change: You deliver a very strong improvement in profitability this quarter. What drives that uptick and how should we think about the margin strain in the coming quarter? As these profit grows, how do you think about the risk to shop EGMV grows amid this uncertain macro environment and what gives you the confidence to maintain that 20% outlook?
Speaker Change: Question number one. Question number two, can you also share more color around the strong performance at Moni as well? What do we see that drives the uplift in Loan Book, whether it's new geography, new products, and how should we think about the return and margins
Speaker Change: Q1 is the first year that Ramadan falls fully in Q1 and the holiday falls in Q2 in the past.
Speaker Change: It's always either in Q2 or partially in Q1, so that contributes to part of the year.
Speaker Change: from last year, so that helps on our tech race side.
Speaker Change: The other side of that is, we also optimize our cost over time.
Speaker Change: Our shipping cost, for example, has dropped meaningfully from last year. We also optimize our sales and marketing over time as well.
On top of that, we also optimize our operating card.
Speaker Change: Through many of the initiatives. For example, we are using a lot more AI solution to automate many of our customer service.
and Listing Management, etc. So all those contribute to...
and as a result, contribute to our margin improvement.
Speaker Change: The, you know, as a long-term trend, we still target down to 3% of the EBITDA over GNV. Of course, in the short term, we're not squeezing our ecosystem as much as possible. We're still...
Speaker Change: Fox, very much on the gross side to make sure that we have a good growth while improving the epitome over time. Although if you look at quarter, there might be some similarities as I said just now.
Speaker Change: From the macro perspective, we have nothing but a mature impact.
To our shopping growth from the macro side.
Speaker Change: I think part of that is because we are a very much local marketplace. Our cross-border business has been a relatively small percentage of our income businesses.
Speaker Change: So, the cross-border trade impacts from any aspect were not impacted by our robust material.
Speaker Change: And also, if you look at our distances, we are very much...
ashamed at all.
Speaker Change: Giving the low penetration of the e-commerce emotional market, this will potentially help us to advance the e-commerce penetration while our user looking for cheap alternative versus their other channels.
Speaker Change: So it's less impacted by the fluctuation on the discretionary spending.
Speaker Change: and all those who are helpers to grow well, even with a macro-accident. [inaudible]
Speaker Change: There is the only thing that might impact our number in a way is forrest.
Speaker Change: The, as you probably, wear that in some of our markets, the Forrest rate can fluctuate quite a lot.
Speaker Change: from time to time. I think we are still okay right now, if you look at the number, but we will monitor closely on the far right side. But again, that should impact our operational, our patient too much in our local market because we are very much local.
Marketplace rather than depends on the cross-border trading.
Speaker Change: If you look at the money side, the money growth has been driven primarily both on the penetration of Shopee through SPL, so we see a higher percentage of SPL penetration on the Shopee side.
Speaker Change: For SPL offline. For example, we have been growing our SPL limit extra with cell phones, we also starting the two-wheel financing as well for model bikes in Indonesia.
Speaker Change: The offline spending through the National QR Code has been growing very well in the past few months as well. If you look at the country mix,
Speaker Change: All countries are growing well, although we see that some newer countries have a slightly faster growth rate versus bigger countries by nature of the space of the market.
Speaker Change: The in term of the margins, pretty good margin in Q1. Part of that is driven by optimizing some of our work.
Speaker Change: Sales and marketing during Q1, giving the good momentum on sustainability. There might be some fluctuation over time on the margins, giving the country my change slightly over time.
and also... [inaudible]
Speaker Change: Giving that the product mix will might shift over time as well and also giving that our target segment we might expand over time.
and also some of the southern marketing spending.
Speaker Change: But overall trend, we should still have a very good margin and absolute amount of the IPDA margin, if you look at a long term, should keep growing, although we will expect a percentage margin percentage.
Speaker Change: Mike Goldalbets, giving the country mix and product mix and expanding of the base.
Thank you.
Speaker Change: Question comes from the line of Piyush Choudhary of HSBC, Your Line is now open.
Speaker Change: Hi, thanks. Congratulations to the management team on stellar results. Two questions.
Speaker Change: Firstly, how are you thinking about incremental capital allocation as it seems in the first quarter majority of cash flows have been invested into money segment to drive credit business. So incrementally would you use own capital for money segment or would you like to diversify sources of capital in the future?
Speaker Change: The second question is on gaming. One new booking was very strong. What's the outlook for booking growth in gaming business? Can the current run rate be maintained?
Speaker Change: Or there could be quarterly volatility. I understand you are a full year outlook on double-digit growth, but can it be like upward of 25% or any kind of range if you can talk about on the booking growth? Thank you.
Speaker Change: Yeah, for the first question, yes, and we are like for all our three business, now self-sufficient and constantly generating cash.
Quarter by Quarter, and...
We are actively monitoring our catch position and the...
Speaker Change: I really think through what is the best way in terms of the capital allocation from the shareholder perspective. Actually, this has been constantly the topic like not only for the operations but only on the board meeting and on the board level.
Speaker Change: And, specifically, in terms of if we are going to continue,
Using our Ngong Mani for our Ngong Book Road.
Speaker Change: We have been very very cautious on that and in general we would prefer to diversify our source of funding.
Speaker Change: And we would rather like instead of using all our own
Cash, although it's probably in the short term, like from the short term perspective, it may make more economic sense but...
Speaker Change: We want to build up a more sustainable and healthy source of funding.
by collaborating with the Third-Party Financial Institutions and the Bytes.
Speaker Change: and some other channels as well. And that is what is primarily our focus in terms of the social funding for diversification.
and in terms of the...
For the question on Marina,
We have a very, very strong...
Speaker Change: First quarter and we are very excited about that and I think this is the...
Speaker Change: I think this is an extension of our strong growth momentum starting from a year ago. The 2024 has been a very strong year for a pre-fire in the arena in general, and we are very happy to see and trying to cure this year that growth is even celebrated.
Speaker Change: And in terms of the quarterly volatility, yes, I mean, Q1, historically, in most of the years, it's been because of the seasonality, it's usually been a strong month because of a lot of holidays and up like in this quarter.
Speaker Change: For example, the Lunar New Year, and this is the big holiday across a lot of our markets.
Speaker Change: and as a Christian dimension, even like for this year Ramadan itself has been.
Speaker Change: In the first quarter, like many in the first quarter as well.
Speaker Change: And especially for Q1, the great performance is also contributed a lot by the IP collaboration with the Naruto, that is a super successful collaboration. Of course, it is given a lot of...
is doing.
Speaker Change: Remain bravery, optimistic and the way we feel very confident about the growth perspectives of the
Speaker Change: More like a focus on the product itself rather than just to say, okay, what is the financial number we can?
Speaker Change: Deliver and when we have a better visibility across the year and if we have a better sense of how the year will look like and will come back to the market and give the more detailed update on that.
2013. https://www.youtube.com.uk
Thank you very much.
Speaker Change: Hi, good evening management, congrats on the strong set of results. Thanks for taking my questions, two questions here. First, it seems like Shopee and also your peer in Brazil continue to do a grow really well this quarter, so can management share with us?
Speaker Change: The main driver for the sustainable fast growth stage in Brazil and how long do you anticipate the fast growth stage to last?
Speaker Change: 2nd question is on the overall SHAPI VAS revenue. So with the subscription membership given it will be driving higher frequency per chase order, will that actually put a pressure on your VAS revenue growth in the short term? How should we think about overall monetization rate over the next few quarters? Thank you.
I'm on the brand new question.
Speaker Change: We do see Brazil has a very good potential for us and for some of our peers as well.
As you can see,
Speaker Change: Forrest Li, the key thing that we are growing well is...
Speaker Change: Similar to we shared before, number one is we have been leading pricing advantage in the market. We always focus on to make sure that in our platform the user can get the best pricing and that has been...
Very welcome by our core, Matthew Zegruz.
especially on the SPX logistics.
Not only is it blowing down their costs. [inaudible]
Speaker Change: that will also shorten our delivery time quite a lot over the time.
Speaker Change: For example, if you look at Q1 2025 versus Latia
Speaker Change: We are also starting procurement services for some sellers, we just started, but we are seeing very good feedback from our sellers.
Speaker Change: And all of this essentially helped us to serve our user better with the better pricing, with the better service and logistics, with the lower shipping cost. I think that's kind of what drives our graduate growth.
Speaker Change: We will foresee that if we can continue to improve on those aspects, we will still be able to grow the market, giving the penetration of e-commerce in Brazil so it's still rare to be low even compared to our South Asia market.
Thank you.
Speaker Change: We will try to essentially improve on those as I shared, so as far as we can.
on the second question.
on the VRT Manprasheed.
Speaker Change: We do see a very good take-up of the VIP membership.
as far as shared in the opening. [inaudible]
Speaker Change: That we are seeing quite a lot of users, subscribe to it, 1.5 minutes also as we shared, and the purchase frequency is a lot higher compared to the non-VIP users. We also see better retention for those users in general.
Speaker Change: I don't think this conflict was the V.S. rap news per se. I think we see this as the public sight, 30 to different animals.
Speaker Change: R&U contributes a lot from the SOS, SPX, those shipping services, and other type of
Li Xiaodong, Unknown Executive, Tianyu Hou
Services, of course, as is on purpose as well.
So if you look at the overall monetization, [inaudible]
Speaker Change: We will probably not increase as much as you think last year.
But there might be still some potentials, we will adjust...
Speaker Change: Interfer market based on the feedback from the sellers. We have not seen any negative feedback from the seller yet in terms of the commission side. So we will monitor very closely based on the sellers feedback and also the pricing of our market place.
Speaker Change: to adjust on the commission side. But on the outside as we shared few times, we still see there are meaningful potential for us to increase the attic rate.
Speaker Change: through both optimizing our efficiencies on the ad placement in our marketplace, and also the seller adoption.
Speaker Change: It's easier for Salad to invest in our ad, but also make the efficient, the return of investment better for the Salad.
Speaker Change: So by doing all this, this will help us to increase the app tech rate. If you compare where we are right now, versus the other marketplace similar to us, we still have meaningful room there.
Speaker Change: So that will help us in general on the vaccination side.
Speaker Change: Here next question comes from the line of Divya Kothiyal, of Morgan Stanley , your line is now open.
Divya Kothiyak: Thank you very much. Two questions from me. The first one on e-commerce is a competitive landscape. Could you please comment on how you are seeing the competitive landscape in ASEAN?
Divya Kothiyak: and Brazil, and how does that tie into the margin expansion that we are seeing?
Divya Kothiyak: and specifically on Brazil, if you could comment on the launch of TikTok Shop.
Divya Kothiyak: and how we are planning to showcase Sharpie Live there. What's your initial sense on the likelihood of live streaming becoming big in Brazil as it did in ASEAN and what would our strategy be versus TikTok?
Speaker Change: So that's the first question. And my second question is, you know, again on FinTech, specifically in Brazil. Could you give us some sense on how big Brazil is now relative to GMB there, how big is it as part of the
Speaker Change: What are the differences in the returns, margin profile that you see for Brazil versus your ASEAN market, and how differently do we need to manage asset quality there, given these differences? Thanks.
Speaker Change: on the competitive landscape. In general, we have seen a relatively stable, competitive landscape.
Speaker Change: I mean, there's always fluctuation here and there but largely, particularly, we didn't see a big movement.
On that.
Speaker Change: and I think our module improvement logic come from that said earlier.
Patel, Attec Great, Patel Cross structure.
Speaker Change: and just better all patients from our side. So we will probably don't see any big impact from that front.
Speaker Change: In our market, both in Ashen and Brazil. I think at the rally point out, TikTok shot launched at Brazil, actually just a few days ago, we will closely monitor the development.
Speaker Change: I think the core for us in Brazil is we would like to make sure that we have a good pricing, we have a good infrastructure to deliver lower cost and better experience.
Speaker Change: And we believe those things, if we do it well, we can continue to grow as I shared in the last comment.
Speaker Change: The shopping line has been available in Brazil for quite a while, although the Apple system development of Intel Brazil for livestreams during early stage.
Speaker Change: Actually not only as you can probably see that Meli also has a large room features here and there, and also the other...
Speaker Change: social media platforms also have live stream features, so it's not completely new to the market but although the overall development of the live stream echoes in the market during the early stage.
So we will monitor quite closely.
Speaker Change: as we have seen in the Asia market. But again, just like what we're doing Asia, if we see that it's a good trend of ecosystem development, we have the capability, we have the experience, we have the technology to capture it where we need it.
Speaker Change: So, we have seen a very good growth on the penetration of SPL on Sharp EGNV. Although the absolute amount is still much lower than where Asia is, which shows that's a much larger potential.
Speaker Change: It's somewhere in the middle, among our market, it's probably the better, higher than some of the market, but lower than the other market, somewhere in the middle.
Speaker Change: The difference is in Brazil, the interest rate is in general a bit higher, it's a high interest market.
Speaker Change: and the high interest are able to cover slightly higher risk in the market, just the nature of the market rather than anything we did very differently.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: We have been well-proclaimed in the market since quite a while ago.
Speaker Change: and the two banks have set up, which we think that we can leverage a lot on.
Speaker Change: So yeah, so in general Brazil we believe that is a good market for us and there is quite a good potential for us in the coming months and years.
Jiong Shao, Jiong Shao,
Thank you.
Speaker Change: Your next question comes from the line of Zhang Shao of Workplace, your line is now open.
Zhang Xiao: Thank you so much for taking my questions, congrats on the very strong results.
My first question is on your...
Zhang Xiao: Shobbi Ipidam Arging as percentage of GMV, you have made a lot of progress, very impressive progress last couple of quarters. Now it's a bit over.
Zhang Xiao: 0.9%, I think you have said before, your long-term target is 2-3%, I was hoping you can comment on the sort of a timing to achieve that target.
Speaker Change: And that target, I mean, it's a bit lower than some of your peers in other parts of the world using there could be other potential upside to that target.
Speaker Change: The takeaway for VAS came down a little bit sequentially. Was that because the shipping subsidies have made that sort of decision tweaking in how you spend your money, sales marketing, vis-a-vis...
Speaker Change: Shipping subsidies. Is that sort of seasonal in Q1 or is that sort of a strategic decision you made for this year or in the foreseeable future? Thank you so much.
Speaker Change: Yes, I think on the year, if it's a margin, I think as we share before, I think the year, 2 to 3%, we think that's a meaningful range we can look at. Although, you know, if the market is right and it's the year, the growth as well, it could be better than that. And I think the year, we're not constrained by the range that we share. I guess that's what I'm trying to say. Thank you.
2013. https://www.youtube.com.uk
Speaker Change: And it's something that will evaluate a time goal, depending on how the competitive landscape is and how the market growth is fundamentally and also how the buy and sell a response to what we do.
Speaker Change: At this point in time, we still see that a lot of growth potential in our market.
Speaker Change: The penetration of e-commerce is still low, and we still see more than 20% growth in the market last year, and we are sharing that we will have 20% growth this year as well, so we don't want to take the last 10% of the market this stage, growth is more important.
To make sure that we can penetrate the market.
Speaker Change: On the standing side, the tick rate, as you can see, on the revenue side, is more driven by the counting as you probably guessed it. If you look at our absolute tick rate in the gap terms, it will subtract out the subsidy that we give out. And it's true that in Q1, we have more
Speaker Change: That pencil out the number bit more. So, if you take that out, I will take a rate to be increasing rather than decreasing.
Speaker Change: Driving the user growth and part of that is because we do have a cost advantage on our aspect side.
We, Dynamite, Adjef,
Speaker Change: So, directionally, we do believe that Sharmaon's update is a useful and effective as we're showing in Q1, but you know, it's not something we said on Stone, and we will measure this based on the testing results and we do it very dynamically when we operate the business.
Thank you. End
Speaker Change: Your next question comes from the line of John Choi of dialogue. Your line is now open.
John Choi: Thank you for taking my question and congratulations on a strong set of results. I got two questions. First of all, on money or new other Fintech business. I think we're talking about driving off shopping growth. [inaudible]
John Choi: What kind of investments are required here, given that there will be much more investments compared to your Divya's shoppy platform, and how this will impact our current EBITDA margin going forward.
John Choi: And also, how are you deploying this AI, what kind of investments have you been doing, and what's the plan, and how is this helping our business efficiently at the current state, and how do you expect us to improve our business down road. Thank you.
Xiaodong Li, Miang Koh, Xiaodong Li, Unknown Executive, Tianyu Hou
John Choi: If you look at the off-shopping growth, there are a few times.
I think the first time is the cash loans. [inaudible]
John Choi: The second type is the SPLATER offline outdoor shopping platform.
John Choi: If you look at the cash long side, cash long side, cash long is actually very popular businesses.
John Choi: The return of assets is probably even better than the actual late term.
Unshopping
and we've been doing this quite well in the past.
John Choi: So we don't think that we need a particular investment.
John Choi: to grow this that can impact the margins for this part.
John Choi: Thank you for joining us. We look forward to seeing you again soon. Please join us again soon.
Speaker Change: Make sure that for all the services that we wrote out, in general we have a positive return rather than requires a big investment upfront.
John Choi: Giving the nature of our businesses. The way we run this is rather than you launch a new product and you try to do a big marketing, you try to attract a lot of new customers for that particular product, we first always leverage on our existing user base.
2014. http://www.youtube.com.uk
John Choi: especially the user base we have been built through our SPLATEM. So we target the new product to the existing user base which will help us to save on the marketing cost and also help us to manage the risk very well for any new product we launched, even for this off-shopping product. So by doing all those typically, we will have a positive return when we add a new product to our assortment.
John Choi: and the impact of iftar is left from the upfront investment, or more from the earlier time goals
John Choi: Prof. Margin and others, and also when we expand to different segments and this can be a cross
John Choi: For certain off-shopping products, it might have say lower margin by nature. For example, if you look at the big ticket items, like we talked about the model loans. Typically, you will have slightly lower margin versus the small ticket loans if you look at a pure percentage of outstanding basis.
John Choi: But still, if you look at absolute terms, it will still bring us positive EBITDA as absolute terms. So it will be a good product to have if you think about the absolute return.
John Choi: For the AI investment, we believe that AI will make a big change to our industries.
John Choi: Both from consumer-facing side and also from our internal protective improvement.
John Choi: I think we shared a little bit on this last time, as an example, one of the big improvement that we did is our search recommendations and our ads.
John Choi: So, we're deploying AI solution to help us to target our user a lot more efficient. When a user searches for us, and when people come to our app, so we can recommend more expert products none, and also help us to have better efficiency on the app product. That's why we can improve the active rates over time.
Another example is AIGC.
John Choi: Productions that we can help our seller to create for their product descriptions.
John Choi: We've been increasing the video coverage for our pro-description a lot over time, and part of that is driven by the, we are enabling the sellers to create a video based on the images, based on some of the descriptions. [inaudible]
John Choi: and, typically, for this investment, we always have a very clear ROI measurement for any of the investment I have shared before. We are spending
John Choi: Our AI resources are better, our ad, our spending, our AI resources are better, the project subscriptions. We measure the return of investment through our click-through rate.
John Choi: Mesh our investment through our conversion rate, and most of our investment so far, anything meaningful for size, has been puffed to return for any investment with AI resources.
John Choi: Besides those consumer-based things, we are also investing quite a lot on...
Improved our internal activities.
John Choi: For example, that we are using AI to help our internal listing team to filter the product our marketplace a lot more efficient so we can discover the consciousness, the fraud, etc. in a lot cheaper way. And again, for all those things, we measure based on our AI investment versus the saving
John Choi: We still see a lot of applications that we can do on both fronts, but again, we do this in a very
John Choi: Thank you. This concludes our question and answer session. I would now like to turn the conference back to Mr. Elsie Choi for any closing remarks.
Elson Choi: Thank you all for joining today's call. We look forward to speaking to all of you again next
OK.