Sea Limited's Q4 2024: Navigating Contradictions in E-Commerce Strategies, Gaming Growth, and AI Integration

These are the key contradictions discussed in Sea Limited's latest 2024Q4 earnings call, specifically including: E-commerce marketplace take rate strategy, the outlook for Free Fire and new games, E-commerce pricing strategy and take rate improvements, Fintech loan growth expectations, and AI integration:



E-commerce Growth and Profitability:
- Sea Limited's e-commerce segment achieved $100 billion in GMV for the first time in 2024, with a 28% year-on-year growth.
- The business became profitable in both Asia and Brazil, marking the first full year of adjusted EBITDA positivity.
- This growth was driven by market leadership, improved monetization, and strong execution across operational priorities like enhancing price competitiveness and service quality.

Digital Financial Services Expansion:
- The digital financial services segment reported $2.4 billion in revenue, with adjusted EBITDA exceeding $700 million, representing over 30% year-on-year growth.
- The loan book size surpassed $5 billion, showing a 60% year-on-year increase.
- Growth was driven by strong credit book expansion, deep market penetration, and prudent risk management.

Digital Entertainment and Gaming Success:
- Garena's Free Fire game achieved 34% year-on-year growth in bookings, making it the world's largest mobile game by average daily users.
- The game expanded its user base in emerging markets like Africa, with a 90% year-on-year increase in active users in Nigeria.
- Success was attributed to accessibility enhancements, strategic content updates, and local market engagement.

AI Integration and Operational Efficiency:
- Sea Limited integrated AI to improve customer service, with a 30% year-on-year reduction in customer service cost per contact.
- Application of AI in search and discovery functions improved purchase conversion rates, benefiting both sellers and ad revenue.
- AI adoption enhanced operational efficiency and customer service capabilities across various business segments.