Happy Birthday, Sea!

2023-5-8

Dear Sailors,

Today, May 8, 2023, Sea celebrates our 14th birthday.

Last September, I wrote to you about the need for us to pivot to achieving self-sufficiency as the highest priority across the entire organization. I expected that it would take us 12-18 months to do it.

I am incredibly proud to share with you today, just 8 months later, that we have achieved self-sufficiency. We are a profitable company now, and our cash balance is increasing rather than decreasing each quarter. This is a big milestone for all of us, and much earlier than expected!

This past year was probably the most difficult period in the history of our company. I think back to the time when we made our first major withdrawal decision: exiting Shopee from India. We had started to realise that the external environment might not be able to support our ambitions. The leadership team debated, many times, whether to exit or keep pushing on.

Around this time, I came down with Covid. It was a bad infection, and I could not get out of bed for several days. With a high fever and constant coughing, it was difficult to think about anything else. But I discovered that I could not put this issue out of my mind. It slowly became clear to me that this was not just a decision about one market: the global environment was changing in fundamental ways, and we may need to pivot our entire strategy. The implications of this were enormous. We were a large ship sailing at high speed – what would it take if we needed to turn it quickly?

In business, you must hope for the best but plan for the worst. We exited India, but hoped that the external environment would improve. Instead, it got worse, and we had to make more difficult decisions. We pulled out of more markets and downsized in others. We shelved projects; we reduced our team sizes. We cut back on perks, froze salaries, and reduced bonuses.

I found the people decisions the hardest, even more than the business decisions. One weekend, Ye Gang, Qunfeng and I sat in the empty office discussing the cuts we had to make to Qunfeng’s team. We talked about it logically, and set down what we needed to do. We knew that this was going to have a big impact, not just on our employees but also on their families. I felt like I had let our people down. Looking up, I saw that we all had tears in our eyes. I realised they must have felt the same way too. But we didn’t speak of it – the decision had to be made. We stood up and parted, each knowing what we had to do. To this day, the three of us have never spoken about that moment.

I mention these painful memories because, when I look back, they tell me what the hardest but most important part of our journey through this crisis has been. It was committing to decisions that we did not like, that we did not want, but that we knew were the right things to do to save the company.

Commitment, one of our Core Values, has always been at the center of Sea’s success: we commit to our mission, to our customers, to our work, and to our fellow colleagues. But, in a crisis, commitment can be the first thing to go. Morale falls, and people can become disengaged and withdraw from their work.

During this crisis, I know that morale has fallen. But I saw teams across the company doubling down on the need to run, adapt, serve, stay humble, and – most of all – commit to our new goal. You innovated ways to get things done with less, and made difficult decisions about what to postpone or stop doing. You did what was necessary even when it was painful. And that is how we have turned our ship, more quickly than most would have thought possible.

Many times in Sea’s history, commitment has allowed us to achieve what seems impossible. Here are two stories, from among many examples that make me feel proud.

When our ShopeePay team was developing QR code payments for ShopeePay Indonesia, they found out, just 21 days before launch, that they would have to make it inter-operable with all e-payment systems in the country. Building such a system would normally take a year or more!

The team received this news on a Friday. Zhizhou, who has been with us since 2016, was leading the engineering team. Haiyan, who joined us in 2014 as a fresh graduate, was leading the product team. Everyone came in, and they locked themselves into a big meeting room for the next 2 weeks. They worked nonstop through the days and nights, pausing only to eat some takeout food or take a quick nap, covering every available surface with marker scribbles. When they had to work with the payment aggregator in Jakarta, they continued to code and write reports from any nearby location they could find with wifi – cafes in the day, and then bars at night when everything else was closed. It was a constant race of intense trial and error.

Against all odds, they launched in time. In fact, ShopeePay emerged as a preferred payment option among the competition. The team was incredibly excited – they had won the battle! Even though the goal had seemed so impossible, they chose to commit fully to it, and gave it their all.

Another story comes from just last month. Our Malaysia team ran a Raya campaign which brought in much higher volumes of parcels, resulting in a backlog of stuck parcels at the last mile hubs.

Pice, who has been with us since 2017, together with Weiren and Hongting from our Regional SPX team, recognized the urgency and jumped into action. They rapidly prototyped a ‘parcel sweeping’ tool that could scan shipping labels and immediately show which parcel most urgently needed to be delivered. Taking advantage of the holiday closures, they quickly operationalized a sweep in one hub, and wrote a SOP for other hubs to implement immediately when they reopened. This resolved the backlog much faster, and the tool worked so well that it’s now being developed for other markets!

The team committed themselves to solving a difficult problem with no easy solutions. They went the extra mile, prioritized speed of execution, and got the job done.

Commitment underpins our ability to achieve excellence. This is why it is so important to us: it is what we recruit for, and what we promote for. You do not have to be the smartest or the most technically capable to be successful at Sea, but you must be committed. I want Sea to be a place where every Sailor is excited by what they can contribute to our mission, and feels energized pursuing these goals with their teams. This is only possible with full commitment from all.

Sailors, I am grateful that you committed to our pivot. I know it demanded a lot from you, not only in terms of financial hardship, but also emotional hardship. Many of you have been anxious about the future of the company, and worried about what might happen next. Some of you have lost teammates and friends. And, through it all, you have continued to work hard, paddling together to turn this large ship amidst choppy waters.

We cannot make up for these hardships overnight. But, as your leaders, we want to express our thanks for the tremendous commitment and grit you have displayed.

Effective this July, we are giving all permanent full-time employees who joined on or before 31 March 2023 a 5% cash salary increase. This will be pro-rated for those who joined on or after 1 July 2022.

Thank you, Sailors, for sticking with us through thick and thin. We could not have done this without you.

The external environment is still a challenging one, but now, we are in better control of our fate. Let us not squander this hard-won progress! With self-sufficiency, we have a foundation for strong growth once again.

I am excited for our journey onwards and upwards from here.

Happy birthday, Sea!

Forrest