00:00And finally, they had the backing of some big players.
00:03Shopee was founded by C-Limited, which is a Singaporean multinational technology company.
00:10In other words, Shopee had almost everything they needed to succeed.
00:15But one thing they didn't have was profit.
00:18Even though they had the biggest market share, they weren't making any money.
00:22And this brings us into today.
00:25Today, Shopee is one of the most popular apps in Southeast Asia.
00:30It has 397 million active users who make 4.2 billion visits every month.
00:37It has over 15 million merchants, and it operates in seven different countries.
00:43But even with all this success, Shopee is not profitable.
00:47They've been burning cash at an alarming rate.
00:50Last year alone, they lost $1.5 billion.
00:55At this rate, they won't be around for much longer.
00:57So the question is, how did this happen?
01:01How did such a dominant company fail to turn a profit?
01:05Well, let's go back to basics.
01:08What does Shopee do exactly?
01:10Well, Shopee is simply a marketplace.
01:13They don't produce anything themselves.
01:15Instead, they allow third parties to list their items on the site and connect buyers and sellers.
01:23Now, you might think that this is a great business model, because you don't have to deal with production, or
01:29logistics, or customer service.
01:31You basically just provide the platform and collect commissions.
01:35But in reality, it's not that easy.
01:42While Shopee does collect commissions, they don't bring in a ton of revenue.
01:46Have a great day.
01:46I'll see you next time.
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