Free Fire, the flagship game of Garena, Sea’s digital entertainment division.
As with any investment, your capital is at risk.
It’s sundown in central Java. Zarah, an Indonesian merchant, props up her phone on a stack of shoeboxes and taps “Go live.” She starts with a smile, a wave and a quick poll for her few hundred viewers: floral or plain?
The audience responds, hearts drift up the screen as she then styles a floral scarf. Questions flow from viewers asking about size, shade and designs, with Zarah responding in real time. Then, a burst of confetti appears, followed by a spin-the-wheel mini-game, bestowing winners with vouchers that expire in seconds.
Orders flow through the chat without buyers ever leaving the stream. Some pay upfront, while others do so in instalments, which are approved instantly. This is a weekday evening on Shopee Live in Indonesia, where shopping is part gameshow, part community event.
From that digital stream, the journey becomes physical. An in-house logistics network stitches together a vast archipelago of islands spanning more than 3,000 miles from the Indian Ocean to the Pacific. It starts later that evening with a moped courier arriving at Zarah’s neighborhood collection point to take her packages.
A truck later transports them across Java. A plane, sometimes a boat, bridges the islands. The final leg of the journey again falls to a moped driver for whom “behind the mango tree, second lane past the blue gate” is a real instruction. Postcodes and house numbers cannot be assumed. The real trick isn’t just speed. It’s repeatable, low-cost precision in messy reality.
For the company that makes this all possible, complexity is not a bug to be tolerated. For Sea, stitching together complexity across south-east Asia at low cost is a powerful edge.
We first invested in Sea in late 2017. It operates across south-east Asia, Taiwan and Brazil – dynamic, underserved markets where mobile is the default platform and infrastructure is uneven. What distinguishes Sea is not just its fast-growing end markets but an uncanny ability born out of ambition, adaptability and experimentation to deliver multiple acts. Today, Sea has three large acts playing out at a continental scale.
Act 1
Gaming: designed for the phones people actually own
The first act was not shopping but gaming. Sea started by publishing and then creating games designed for the phones that most people around the world actually own: modest Android handsets on patchy bandwidth. File sizes, modes and art are optimized for low processing and memory requirements. Crucial too is that content is localized, so “skins” (outfits and other customizations for in-game characters and objects), “emotes” (the animated gestures or expressions players’ avatars use) and “events” (in-game activities) feel native to Jakarta as well as Manila, Hanoi and Kuala Lumpur.
Collaborations – from regional music to football tie-ins and holiday specials – keep its flagship title Free Fire fresh, boosting its longevity. The result: Free Fire has become one of the world’s most downloaded games, generating billion-dollar cash flows that have funded later acts. Gaming taught Sea how to keep a giant user base engaged with a constant cadence of lightweight, rewarding interactions – the very language of today’s ecommerce feeds.
Act 2
Ecommerce: a bazaar, not a catalog
Success in gaming made management rich. But the company’s founder, Forrest Li, recalled to me how he and his colleagues decided in their mid-30s that retiring to lie on the beach did not appeal. Instead, they leveraged their gaming success into a second act in an ecommerce arm known as Shopee. Unlike others at the time, this was not a clone of Amazon. Shopee grew up mobile-first and entertainment by default.
Today, livestreams, chat, mini-games and a personalized feed make the app feel more like a vibrant bazaar than a catalog. Discovery and advertising are woven into that rhythm, not bolted on.
The focus was also on low-priced items and categories to match the price-conscious consumers it served. Over time, Shopee internalized logistics, which has both pushed down costs per parcel and improved speed, providing it with a hard infrastructure edge.
The fruits of this are clear. In south-east Asia, Shopee’s market share is about 50 percent, above Amazon’s share in the US.
In Brazil, it’s taken second place after MercadoLibre, pushing Amazon into third. Yet it is still early days, with ecommerce penetration less than half that of China in the regions in which Shopee operates. Growing monetization and advertising should also further boost revenue and profitability over time.
Act 3
Financial services: from checkout to credit platform
This evolved from the ecommerce checkout. Sea built payments first: digital wallets that enable everyday transactions on Shopee. Then it added buy-now-pay-later credit that appeared exactly at the point of purchase.
From there, the scope widened: off-platform cash loans for consumers and working capital loans for merchants like Zarah, which are increasingly funded by local deposits at SeaBank. Risk is kept in check with short repayment periods, conservative limits and dense behavioral data on who buys, returns and pays on time on the shopping platform.
The data advantage is huge in a region where many still do not have a bank account. Credit, savings, investments and insurance all become possible. What began as a way to help users pay now has the potential to become the most valuable financial services operation in south-east Asia.
What began as a way to help users pay now has the potential to become the most valuable financial services operation in south-east Asia.
Competition is, of course, relentless. ByteDance’s TikTok has taken the number two spot in ecommerce across south-east Asia, leveraging its short-form video platform. Coupang is attempting to grow in the Taiwanese ecommerce market.
In Brazil, MercadoLibre leads by a significant margin. Yet this isn’t purely zero-sum: segments differ, and credible competitors help grow the market.
Baillie Gifford’s advantage is that our investments and relationships provide access across these players, allowing us to triangulate between them. Our investments in Ant Group and MercadoLibre enabled us to understand the potential of Sea’s financial services operation earlier than would have been the case otherwise.
Being global and talking to both private and public companies allow more dots to be connected.
It is not possible to rule out a fourth act, but these three should be plenty. In gaming, Sea generates cash flows and perfects habit loops and fresh content. Ecommerce borrows those mechanics to keep viewers engaged and buying: those purchases provide data to underwrite credit. Credit boosts the purchasing power of consumers on the platform, allowing merchants to expand faster.
The scale of all this enables it to run its own logistics operations, which become more efficient as delivery densities rise. Data, users and capital reinforce each other across these businesses.
For us, this is the pattern of many outliers with capabilities compounding across multiple acts, not just a single growth-to-maturity S-curve. For Forrest Li, the mercurial founder, there is a possible path to a trillion-dollar business. I certainly wouldn’t want to bet against him.
Sea Limited is held in Baillie Gifford's Emerging Markets, Global Alpha, International Alpha, International Concentrated Growth, International Growth, Long Term Global Growth, and Positive Change Strategy portfolios.
Risk factors
The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.
This communication was produced and approved in April 2026 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.
Potential for profit and loss
All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns.
This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research and Baillie Gifford and its staff may have dealt in the investments concerned.
All information is sourced from Baillie Gifford & Co and is current unless otherwise stated.
The images used in this communication are for illustrative purposes only.
Important Information
Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK Professional/Institutional clients only. Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford & Co. Baillie Gifford & Co and Baillie Gifford Overseas Limited are authorised and regulated by the FCA in the UK.
Persons resident or domiciled outside the UK should consult with their professional advisers as to whether they require any governmental or other consents in order to enable them to invest, and with their tax advisers for advice relevant to their own particular circumstances. Baillie Gifford Overseas Limited is registered with the SEC in the United States of America.
Baillie Gifford International LLC is wholly owned by Baillie Gifford Overseas Limited; it was formed in Delaware in 2005 and is registered with the SEC. It is the legal entity through which Baillie Gifford Overseas Limited provides client service and marketing functions in North America. Baillie Gifford Overseas Limited is registered with the SEC in the United States of America.
191312 10061839
