Chinese app ban : After India banned China’s most popular mobile gaming title, C Ltd. (Sea Ltd.) lost more than $16 billion in value, the biggest drop for the company in a single day. Investors feel that the ban is just the beginning of the company’s problems.
Sea Ltd. was the most valuable company in Southeast Asia.
Singapore-based Sea (Sea Ltd.) was listed in 2017 and quickly became Southeast Asia’s most valuable company, seeing its potential to expand beyond the domestic market into gaming, e-commerce and financial services.
Alibaba Group Holdings Ltd. is facing growing challenges due to geopolitical tensions due to India’s decision to ban Free Fire, a lucrative title for the company. It shows the increasing competition from Lazada’s side.
Hundreds of Chinese apps banned in India in two years
India has banned hundreds of Chinese apps in the past two years, but despite this policy, the expansion of Sea took the company’s management and investors by surprise. The startup was founded by Forrest Li, who was born in China but is currently a citizen of Singapore. He is the largest shareholder of Chinese social media company Tencent Holdings Ltd.
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The second major base of Sea’s business, Shoppe, is also banned.
Investors fear that India may also ban the second largest base of Sea’s business, Shopee, which had 300 employees and 20,000 local sellers till December. On Monday, Lee assured shareholders at the company’s annual general meeting that the company’s situation remained on hold. However, he did not comment on the ban on Free Fire in India.
The market did not take it positive. Sea’s New York stock fell more than 18 percent. Analysts analyzed India’s logic and Sea’s growth prospects. Shares have lost two-thirds of their value since October.
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Sea’s answer – we are a Singapore company
Responding to a query from Bloomberg, the company said in a statement, “Sea is a Singapore-based company and we look forward to being a partner in India’s digital economy mission. We are committed to the privacy and security of our users in India and around the world. We follow Indian laws and regulations. We do not transfer or store any data of our Indian users to China.
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Free Fire is the highest earning app in India
According to industry tracker App Annie, Free Fire was the highest-grossing mobile game in India in the third quarter of 2021. JPMorgan analyst Ranjan Sharma has cut its price target by 40 per cent to $250, citing concerns over Sea’s gaming franchise.