Sea Group's Cloud Business: A Strategic Move to Bolster Shopee's Market Share

SINGAPORE – Sea Group's e-commerce platform, Shopee, has achieved a significant milestone, reporting its most profitable quarter to date. In Q3 2026, adjusted earnings before interest, depreciation, and amortisation (EBITDA) surged by 44.5% to US$269 million, up from US$186.1 million in the same period last year, according to a report from The Business Times.

This uptick in profitability comes as the Southeast Asian e-commerce market continues to expand, with Shopee maintaining a dominant 52% market share in Singapore, followed by Lazada at 36%, and both Amazon and TikTok Shop at 6% each, as reported by The Straits Times.

“The e-commerce industry is entering a new phase where competition is shifting from rapid expansion to greater control over demand generation, logistics and margins.”Momentum Works, consultancy report

The broader Southeast Asian e-commerce market saw a 22.8% year-on-year increase in gross merchandise value (GMV), reaching US$157.6 billion in 2025, according to consultancy Momentum Works. This growth is attributed to major platforms enhancing their infrastructure and customer experience, although the sector is also experiencing increased competition, leading to a shift from rapid expansion to more strategic control over demand generation and logistics.

Amidst this competitive landscape, Sea Group is leveraging its cloud business as a strategic defense for Shopee. The company aims to utilize its expertise in artificial intelligence (AI) to enhance operational efficiencies and potentially generate additional revenue streams. Analysts suggest that AI will play a crucial role in shaping the future of e-commerce, particularly in content creation and demand generation.

Despite the positive financial results, the e-commerce sector faces challenges, including rising operational costs for sellers. The commission rate on Shopee has reportedly increased to approximately 13.5%, while total costs for sellers, including advertising and logistics, can exceed 30%. This situation has created a structural dilemma for sellers who remain dependent on platform traffic despite rising costs.

“AI will play a crucial role in shaping the future of e-commerce, particularly in areas such as content creation and demand generation.”Analysts, industry insights

Furthermore, the logistics landscape is also undergoing significant changes. Major players like SPX Express, J&T Express, and Lazada Logistics, all affiliated with Sea Group, collectively dominate over 67% of the parcel volume in the region. This concentration raises concerns for smaller logistics firms struggling to compete.

As the e-commerce market evolves, the integration of AI technologies is expected to enhance not only content production but also the platforms' control over user demands and transaction paths. The competitive dynamics within Southeast Asia's e-commerce ecosystem continue to shift, with larger platforms consolidating their positions while smaller entities face increasing pressure.