Update India’s latest round of bans on Chinese apps has removed a Singaporean company’s apps – and stock price – leaving government officials to ask pointed questions.
India has banned hundreds of apps that the government says are controlled by Chinese companies, send data to China or use infrastructure located in China. A new round of bans, announced on February 14, listed another 54 apps for endangering users’ privacy by sending data to servers in China.
Some of these apps are owned and operated by Singaporean company SEA, which on the day of the new bans warned players of the popular “Free Fire” game that the software had been pulled by Indian app stores.
In a refreshingly short canned statement, the company offered the following:
SEA also offers a popular shopping app named Shopee which does healthy commerce in India. Sensor Tower Market Reports claimed that Shopee was the second most downloaded app in India for the month of January – just behind Indian e-commerce company Meesho. It was also recently named as a notorious market teeming with counterfeit kits by the Office of the US Trade Representative.
Investors appear to have been alarmed by the ban on Free Fire and the prospect of similar action against Shopee, as SEA shares plunged following the announcement of the ban, wiping out up to $16 billion in market capitalization .
SEA responded by denying entanglements with China, saying Reuters “We do not transfer or store any data of our Indian users in China,” adding that it is a Singaporean company and compliant with Indian law.
But SEA has an important link with the Middle Kingdom: the Chinese web giant Tencent has a stake in the company. Tencent recently sold some of its shares, to reduce its stake from 31.3% to 18.7% of the shares, and its voting power below 10%.
At the end of last week Reuters returned to the Free Fire ban, noting that the Singapore government has been in contact with Indian officials to complain about the ban, as SEA is Singaporean.
SEA’s stock price rebounded on the news.
But government intervention may not be the only reason for the rise. SEA’s stock fell steadily from October 19, 2021 to last Friday, falling from an all-time high closing near $370 that day in October to $120 on February 23. Some analysts suggest that the drop was a correction and that the recent rises represent a rebound.
Whatever the cause of the stock price increase, investors who entered early still have a net gain of almost 300% since the start of 2020, when SEA certificates cost $40.49 each.
As of this writing, Free Fire remains banned in India, but Shopee is still available – and presumably hopes that its free shipping and free seller service model, enabled by ad sales, will keep it ahead of the game. many other national and international players targeting the Indian e-commerce market. ®
Update, 04:30, March 2 : A spokesperson for the Singapore Ministry of Trade and Industry responded to our inquiries as follows: