00:00And in order to understand their economics, we need to look at what they actually offer.
00:05And here we have to talk about the freebies.
00:08Shopee is known for giving away insane amounts of free stuff.
00:13If you look through any of their ads, you'll see that they always include some sort of free item.
00:18Sometimes it's a TV, sometimes it's a car, and sometimes it's even an iPhone.
00:24Now you might think that this is a good thing.
00:27After all, who doesn't like free stuff?
00:30But the truth is that it's terrible for the business.
00:34Just think about it.
00:36Would you want to work twice as hard just to get paid half as much?
00:40Probably not.
00:41And that's essentially what these freebies are doing.
00:44They're cutting Shopee's revenue in half.
00:47Every dollar that they earn, they have to give 50 cents away.
00:51And they're not the only ones doing this.
00:54Because Lazada, their main competitor, does the same thing.
00:58In fact, they probably do it even more.
01:02Now, you might think that this is just a phase that they're going through.
01:06Something they have to do to compete.
01:08But the truth is that this is the whole point of their business.
01:12You see, Shopee isn't really trying to build a sustainable business here.
01:17They're trying to build a lottery ticket.
01:19Their goal is to capture as much market share as possible, not necessarily to turn a profit.
01:25And for that, they need to burn a ton of cash.
01:28That's why they're constantly raising money.
01:31The only difference between Shopee and a pyramid scheme is that Shopee is slightly less evil.
01:37Instead of depending on recruiting people, they're depending on VC funding.
01:42At this point, you might be thinking that this is all on Forrest Lee.
01:46That he's just a greedy CEO looking for a quick buck.
01:50So, let's take a look.
01:50Let's take a look.
01:50Let's take a look.
01:51Let's take a look.
01:51Let's take a look.
01:51Let's take a look.
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