Goldman Sachs Group, Inc.: Competitive situation remains stable, reaffirms "Buy" rating on Sea (SE.US)

Following the tracking in June, Goldman Sachs Group, Inc. focused on Sea Ltd (SE.US) and its competitors' promotional activities during the 7.7 sales season, as well as recent changes in merchant fees. In its latest research report, Goldman Sachs Group, Inc. stated that it will be tracking Shopee in Brazil, which has become a key discussion point among buyers. Goldman Sachs Group, Inc. reiterated its "buy" rating on Sea with a target price of $186. Although Shopee provided more shipping discounts in Indonesia, product discounts remained stable. Price sampling by Goldman Sachs Group, Inc. also indicated that the overall subsidy levels of Shopee and TikTok were largely unchanged compared to 6.6. Shopee also maintained relative price competitiveness compared to TikTok (with an average consumer final cost around 6% lower), which is a key factor supporting the resilience of the company. Similarly, Goldman Sachs Group, Inc.'s new price sampling in Brazil showed that prices for most goods on Shopee were lower than MELI, especially for generic unbranded products. Regarding free shipping, Goldman Sachs Group, Inc. noted that the 10 Brazilian Real minimum spending voucher on Shopee has been in effect since the first quarter of 2025, when it reported an improvement in profitability in Brazil. The 0 Real minimum spending voucher has also been in effect - only applicable to first-time purchases, and not a part of its regular promotional activities (which raised concerns in the market regarding whether this was a response to MELl). In other regions, Goldman Sachs Group, Inc. observed that Shopee increased its promotions in Malaysia, but reduced its promotions in Thailand and Vietnam (notably competitive markets for Shopee against TikTok). In terms of merchant fees, Shopee introduced a new fixed handling fee of 1250 Indonesia Rupiah (approximately $0.08) per order in Indonesia starting from July 20th. This indicates an industry-wide emphasis on improving profitability, with TikTok also introducing new dynamic commission rates in June. At the same time, starting from July 16th, Shopee increased the base commissions for Malaysian B2C and C2C sellers. TikTok also increased the base commissions in Singapore starting from July 15th, and will increase the fees for the free delivery program in Thailand starting from August 1st.