Sea Ltd (SE) 2021 Q3 法說會逐字稿

Good morning and good evening. Welcome to the Sea Limited Third Quarter 2021 Results Conference Call. (Operator Instructions) Please note this event is being recorded.

早安，晚上好。歡迎參加 Sea Limited 2021 年第三季業績電話會議。（操作員指示）請注意，此事件正在被記錄。

I would now like to turn the conference over to Ms. Min Ju Song. Please go ahead.

現在我想將會議交給宋敏珠女士。請繼續。

Hello, everyone, and welcome to Sea's 2021 Third Quarter Earnings Conference Call. I'm Min Ju Song from Sea's Group Chief Corporate Officer's office. Before we continue, I would like to remind you that we may make forward-looking statements, which are inherently subject to risks and uncertainties and may not be realized in the future for various reasons as stated in our press release. Also, this call includes a discussion of certain non-GAAP financial measures (sic) [numbers], such as adjusted EBITDA and net loss, excluding share-based compensation. We believe these measures can enhance our investors' understanding of the actual cash flow of our major businesses when used as a complement our GAAP disclosures.

大家好，歡迎參加Sea 2021年第三季財報電話會議。我是 Sea 集團首席公司長辦公室的宋敏珠 (Min Ju Song)。在我們繼續之前，我想提醒您，我們可能會做出前瞻性的陳述，這些陳述本質上受風險和不確定性的影響，並且由於我們在新聞稿中所述的各種原因，可能不會在未來實現。此外，本次電話會議也討論了某些非 GAAP 財務指標（原文如此）[數字]，例如調整後的 EBITDA 和淨虧損（不包括股權激勵）。我們相信，這些指標作為我們 GAAP 揭露的補充，可以增強投資者對我們主要業務實際現金流的理解。

For a discussion of the use of non-GAAP financial measures and reconciliation with the closest GAAP numbers, please refer to the section on non-GAAP financial measures in our press release.

有關非 GAAP 財務指標的使用以及與最接近的 GAAP 數字的調整的討論，請參閱我們新聞稿中有關非 GAAP 財務指標的部分。

I have with me Sea's Chairman and Group Chief Executive Officer Forrest Li; Group Chief Financial Officer, Tony Hou; and Group Chief Corporate Officer, Yanjun Wang. Our management will share strategy and business updates, operating highlights and financial performance for the third quarter of 2021. This will be followed by a Q&A session in which we welcome any questions you have. With that, let me turn the call over to Forrest.

和我一起的還有 Sea 集團董事長兼執行長 Forrest Li；集團財務長侯建軍；以及集團首席企業官王延軍。我們的管理層將分享 2021 年第三季的策略和業務更新、營運亮點和財務表現。接下來是問答環節，我們歡迎您提出任何問題。說完這些，讓我把電話轉給福雷斯特。

Hello, everyone, and thank you for joining today's call. Sea exists to connect communities, enable consumers and empower small businesses so that more people can benefit from the growth of the digital economy. We continue to scale with efficiency and build deeper connections across our ecosystem. As this happens, we are expanding our total addressable market. We are reporting another quarter of strong results across all our businesses in the third quarter. Our results once again demonstrate our ability to capture new and attractive opportunities. At the group level, for the third quarter of 2021, we continued to record triple-digit growth in GAAP revenue and gross profit.

大家好，感謝您參加今天的電話會議。Sea 的存在是為了連接社區、支持消費者並賦予小型企業權力，以便更多人可以從數位經濟成長中受益。我們將繼續有效率地擴大規模，並在我們的生態系統中建立更深的連結。隨著這種情況的發生，我們正在擴大我們的整體目標市場。我們報告第三季所有業務均取得強勁業績。我們的業績再次證明了我們有能力抓住新的、有吸引力的機會。集團層面，2021年第三季度，我們的GAAP營收和毛利持續達到三位數成長。

GAAP revenue increased 122% year-on-year to $2.7 billion, while gross profit grew 148% year-on-year to reach $1 billion. Along with our strong financial and operating results for the quarter, we rolled out more initiatives to empower our users to benefit from the opportunities of the digital economy. Let me share some examples. In Indonesia, we have ramped up our efforts to give local SMEs the resources they need to build successful businesses online, including helping them to reach new international markets on Shopee. In recent months, Shopee has opened Shopee Export MSME campuses in Solo and Bandung. These composes give local businesses, the resources and training they need to help them scale more effectively and sell internationally.

GAAP營收年增122%至27億美元，毛利年增148%至10億美元。除了本季強勁的財務和營運業績外，我們還推出了更多舉措，幫助我們的用戶從數位經濟的機會中受益。讓我分享一些例子。在印度尼西亞，我們加強為當地中小企業提供所需的資源，幫助他們在線上取得成功，包括幫助他們透過 Shopee 進入新的國際市場。最近幾個月，Shopee 在梭羅和萬隆開設了 Shopee Export MSME 園區。這些組織為當地企業提供所需的資源和培訓，幫助它們更有效地擴大規模並進行國際銷售。

SMEs can access inventory management systems, marketing support facilities like photography studios, courses on management and initial and individual training sessions with the Shopee team.

中小企業可以使用庫存管理系統、攝影工作室等行銷支援設施、管理課程以及與 Shopee 團隊一起參加的初始和個人培訓課程。

In Malaysia, we are working with the government to digitize rural sellers and help boost their sales on e-commerce platforms. We partnered with the Malaysian communication and multimedia commission to use their rural Internet centers nationwide to offer free e-commerce training to local entrepreneurs. Since the start of the campaign in July 2021, we have trained and helped more than 6,000 rural sellers nationwide. We also partnered with the Malaysian government as part of the Shop Malaysia Online program to promote over 280,000 online and offline local brands and sellers. The program aims to further boost the local SMEs' participation in the growth opportunity offered by the digital economy.

在馬來西亞，我們正在與政府合作，實現農村賣家的數位化，並幫助他們提高在電子商務平台上的銷售額。我們與馬來西亞通訊與多媒體委員會合作，利用其在全國範圍內的農村互聯網中心為當地企業家提供免費的電子商務培訓。自2021年7月活動啟動以來，我們已在全國培訓和幫助了6000多名農村賣家。我們也與馬來西亞政府合作，作為「馬來西亞線上購物」計畫的一部分，推廣超過 28 萬個線上和線下的本地品牌和賣家。該計劃旨在進一步提高當地中小企業參與數位經濟提供的成長機會。

In Thailand, we are working with the Digital Economy Promotion Agency, the Stock Exchange of Thailand and the Office of Small and Medium Enterprises Promotion to launch the digital opportunities for talent projects. This initiative aims to develop digital entrepreneurial skills for young entrepreneurs through prize, training and mentoring sessions.

在泰國，我們正與泰國數位經濟促進局、泰國證券交易所和中小企業促進辦公室合作推出人才數位機會計畫。該計劃旨在透過獎勵、培訓和指導課程培養年輕企業家的數位創業技能。

Similarly, in Brazil, we have been focused on onboarding more local SMEs to help them to sell and grow online. I'm pleased to note that more than 1 million local sellers in Brazil have registered with Shopee, since we started welcoming local sellers in mid-2020. Meanwhile, we are mindful that the impact of the pandemic remains a significant challenge in all our markets.

同樣，在巴西，我們一直致力於吸收更多本地中小企業，幫助他們進行線上銷售和發展。我很高興地註意到，自 2020 年中期我們開始歡迎本地賣家以來，已有超過 100 萬巴西本地賣家在 Shopee 上註冊。同時，我們意識到，疫情的影響仍然是我們所有市場面臨的重大挑戰。

For instance, Vietnam imposed its strictest lockdown of the entire pandemic during the third quarter. During such lockdowns we quickly adapted to serving our users as much as possible while ensuring the safety and health of our employees. We worked closely with government to ensure the safety of our team and continued to serve our sellers and buyers to the best of our ability. We have also launched various initiatives to assist the government in our market in rolling out containment and vaccination efforts.

例如，越南在第三季實施了整個疫情期間最嚴格的封鎖。在這樣的封鎖期間，我們迅速適應，盡可能為使用者提供服務，同時確保員工的安全和健康。我們與政府密切合作，以確保我們團隊的安全，並繼續盡最大努力為我們的賣家和買家提供服務。我們也推出了各種舉措，協助我們所在市場的政府進行疫情防治和疫苗接種工作。

In Indonesia, for example, we have worked with the government to integrate the national contact tracing system within our app to enable more users to access this service with ease. In Malaysia and the Philippines, we introduced the small reward programs for users who had been vaccinated to support the governmental efforts to encourage vaccine uptake.

例如，在印度尼西亞，我們與政府合作，將國家接觸者追蹤系統整合到我們的應用程式中，以便更多用戶輕鬆存取這項服務。在馬來西亞和菲律賓，我們針對已接種疫苗的用戶推出了小額獎勵計劃，以支持政府鼓勵接種疫苗的努力。

All these initiatives reflect the fundamental mission of our business. We want to ensure that the benefits of the technology and digitization are wide-reaching and accessible.

所有這些舉措都體現了我們業務的根本使命。我們希望確保技術和數位化的益處能夠廣泛且易於獲取。

As more people in our communities embrace the digital economy, we are committed to serving the needs of more consumers and small businesses and continuing to play our part in building a healthy and sustainable digital economy. Let us now look at the performance of each of our business segments.

隨著我們社區中越來越多的人擁抱數位經濟，我們致力於滿足更多消費者和小型企業的需求，並繼續為建立健康、可持續的數位經濟發揮我們的作用。現在讓我們來看看我們各個業務部門的表現。

Starting with digital entertainment. In the third quarter, Garena continued to solidify its position as one of the world's leading game developers and publishers as we deepened engagement with our large and growing global user base. We reported bookings of $1.2 billion, up 29% year-on-year. Adjusted EBITDA grew 22% from last year to reach $715 million. Quarterly active users were 729 million representing year-on-year growth of 27%. And quarterly paying users hit 93 million, up 43% from last year. Our paying user ratio increased to 12.8% from 11.4% a year ago.

從數位娛樂開始。第三季度，隨著我們加深與龐大且不斷增長的全球用戶群的互動，Garena 繼續鞏固其作為全球領先遊戲開發商和發行商之一的地位。我們報告的預訂額為 12 億美元，年增 29%。調整後的 EBITDA 較去年同期成長 22%，達到 7.15 億美元。季度活躍用戶數為7.29億，較去年同期成長27%。本季付費用戶達 9,300 萬，比去年同期成長 43%。我們的付費用戶比例從一年前的11.4％上升至12.8％。

Garena is now serving some of the largest game communities globally, and we are very focused on creating great experiences to engage, entertain and help friends and families spend time together. In particular, Free Fire's massive and highly engaged user base represents an exciting and growing opportunity for us. We continue to create high-quality diverse content so that our community can enjoy fresh and engaging experiences.

Garena 目前正在為全球一些最大的遊戲社群提供服務，我們非常注重創造出色的體驗以吸引和娛樂並幫助朋友和家人共度時光。特別是，Free Fire 龐大且高度參與的用戶群對我們來說是一個令人興奮且不斷成長的機會。我們將繼續創造高品質、多樣化的內容，以便我們的社群能夠享受新鮮、引人入勝的體驗。

For example, we introduced more new content that develops the storylines across the Free Fire universe and its characters to deepen user affinity. We launched an event themed around Moco with a focus on enriching the narrative around one of the most popular playable characters in Free Fire. We also had our first movie collaboration partnering with Venom: Let There Be Carnage to bring Venom-themed playable content, in-game items and collectibles to our users.

例如，我們引入了更多新內容，拓展了 Free Fire 宇宙及其角色的故事情節，以加深使用者的親和力。我們發起了一場以 Moco 為主題的活動，重點是豐富 Free Fire 中最受歡迎的可玩角色之一的敘事。我們也與《猛毒：大屠殺》進行了首次電影合作，為我們的用戶帶來以毒液為主題的可玩內容、遊戲內物品和收藏品。

We are also finding other creative ways to holistically encourage -- engage with our broader community through offline experiences. This week, Free Fire will make its debut in the fashion world at São Paulo Fashion Week, where 20 in-game skins will be brought to life at a fashion show. Events like this are a great way for us to connect with our users across different mediums and reinforce Free Fire's growing influence and importance, both online and off-line among our communities.

我們也正在尋找其他創意的方式，透過線下體驗全面鼓勵與更廣泛的社區互動。本週，《Free Fire》將在聖保羅時裝週上首次亮相時尚界，20 款遊戲造型將在時裝秀上栩栩如生地展現出來。這類活動是我們透過不同媒介與使用者建立聯繫的絕佳方式，並增強了 Free Fire 在我們社群中線上和線下日益增長的影響力和重要性。

Importantly, we continued to enhance the variety of game modes within Free Fire. In the third quarter, we launched 1v1 and 2v2 modes and have seen significant adoption across our community. Players enjoy the simplicity of this mode because they offer a more casual and a quicker game with a smaller group of friends.

重要的是，我們繼續增強 Free Fire 中的遊戲模式的多樣性。在第三季度，我們推出了 1v1 和 2v2 模式，並在整個社區中得到了廣泛的採用。玩家喜歡這種模式的簡單性，因為它可以為小群朋友提供更休閒、更快捷的遊戲體驗。

We are also introducing more diverse gameplay options within Free Fire, such as the recently launched Pet Mania. This mode enables users to compete against their friends or other members of the community in various fast-paced casual games.

我們還在「Free Fire」中引入了更多樣化的遊戲選項，例如最近推出的「寵物狂熱」。此模式使用戶能夠在各種快節奏的休閒遊戲中與他們的朋友或社群的其他成員競爭。

Another highlight of the quarter was the global celebration around Free Fire's fourth anniversary. Among other activities to celebrate this milestone with our community, we worked with global artists to produce a theme song, which has been streamed over 60 million times across various online platforms to date.

本季的另一個亮點是圍繞 Free Fire 四週年的全球慶祝活動。除了與社群一起慶祝這一里程碑的其他活動外，我們還與全球藝術家合作製作了一首主題曲，迄今為止，該曲在各個線上平台上的播放量已超過 6000 萬次。

At the end of the third quarter, we introduced Free Fire MAX globally to a very strong reception from our community. Free Fire MAX offers an enhanced Free Fire experience through higher quality effects, animation, graphics and features, but retaining the same great game play. Because we are committed to empowering users everywhere, we've worked hard to ensure that players of both Free Fire and Free Fire MAX can play together seamlessly. To make that possible, we developed proprietary in-house technology to guarantee complete integration between both Free Fire and Free Fire MAX. This also allows existing users of Free Fire to use the same account on Free Fire MAX and sync account data across both apps with access to all game modes.

第三季末，我們在全球推出了 Free Fire MAX，受到了社群的熱烈歡迎。Free Fire MAX 透過更高品質的效果、動畫、圖形和功能提供增強的 Free Fire 體驗，但保留了同樣出色的遊戲玩法。由於我們致力於為世界各地的用戶提供支持，因此我們一直努力確保 Free Fire 和 Free Fire MAX 的玩家能夠無縫地一起玩遊戲。為了實現這一目標，我們開發了專有的內部技術，以確保 Free Fire 和 Free Fire MAX 之間的完全整合。這也允許 Free Fire 的現有用戶在 Free Fire MAX 上使用同一個帳戶，並在兩個應用程式之間同步帳戶數據，並存取所有遊戲模式。

With Free Fire MAX, we have also incorporated a map editor feature called Craftland. Players can create their own unique maps and invite their friends to join them in playing within these custom maps. This enables us to tap into the creative power of our community. They have always been the source of our inspiration for the game, and now they have an opportunity to create their own experiences within the game. It is also a powerful new way for friends to enjoy the game in the space that they have created together, which adds a new and deeper dimension to our community building efforts.

在 Free Fire MAX 中，我們也加入了名為 Craftland 的地圖編輯器功能。玩家可以創建自己獨特的地圖並邀請朋友一起在這些自訂地圖中玩遊戲。這使我們能夠挖掘社區的創造力。他們一直是我們遊戲靈感的源泉，現在他們有機會在遊戲中創造自己的體驗。這也是朋友們在共同創建的空間中享受遊戲的一種強大的新方式，為我們的社區建設工作增添了新的、更深層的維度。

While still early, Free Fire MAX will be an important component of the Free Fire platform by continuing to drive more engagement and experiences across our large and diverse user base. The positive community reception to this initiative is reflected in strong engagement across our markets. According to App Annie, Free Fire was ranked second globally by average monthly active users for all mobile games on Google Play in the third quarter. Free Fire also continued to be the highest grossing mobile game in Southeast Asia, Latin America and India. It has maintained this leading position in Southeast Asia and Latin America for 9 consecutive quarters and in India for 4 consecutive quarters. In the U.S., Free Fire remained the highest grossing mobile battle royale game for the third consecutive quarter and it was the second largest (sic) [highest] grossing mobile game on Google Play across all game categories during the quarter.

儘管還處於早期階段，但 Free Fire MAX 將成為 Free Fire 平台的重要組成部分，繼續在我們龐大而多樣化的用戶群中推動更多的參與和體驗。社會對此舉的正面反應體現在我們各市場的積極參與。根據App Annie的數據，第三季度，《Free Fire》在Google Play所有手機遊戲中以平均月活躍用戶數排名全球第二。《Free Fire》也持續成為東南亞、拉丁美洲和印度最賣座的手機遊戲。該公司在東南亞和拉丁美洲地區已連續9個季度保持領先地位，在印度地區已連續4個季度保持領先地位。在美國，《Free Fire》連續第三個季度保持最暢銷的大逃殺類手機遊戲寶座，並且是本季 Google Play 上所有遊戲類別中銷售第二好的手機遊戲。

Given Free Fire's growing global popularity, we see significant opportunity to provide our community with many kinds of ways to enjoy Free Fire platform, and we continue to invest in building towards a long-lasting global franchise. We are looking forward to a busy calendar of e-sports events towards the end of the year. Free Fire will be hosting the Free Fire Asia Championship and Free Fire EMEA Invitational at the end of this month.

鑑於《Free Fire》在全球日益增長的知名度，我們看到了為社區提供多種方式享受《Free Fire》平台的巨大機會，並且我們將繼續投資打造一個持久的全球特許經營權。我們期待著年底的電競賽事日程表忙碌起來。Free Fire 將在本月底舉辦 Free Fire 亞洲錦標賽和 Free Fire EMEA 邀請賽。

Additionally, the Arena of Valor International Championship will be held in the coming weeks. We believe this exciting lineup of e-sports tournaments will further drive engagement across our communities. We are also very focused on growing our global reach and building a games pipeline that ensures we can capture the most promising and valuable long-term trends in online games. Our growing global presence across diverse high-growth markets gives us important local insights and strong local operational capabilities, and our in-house development team is tapping into this as they work on both existing games and new ideas.

此外，《勇者競技場》國際錦標賽將於未來幾週舉行。我們相信，這一系列令人興奮的電競錦標賽將進一步推動我們社區的參與。我們也非常注重擴大我們的全球影響力和建構遊戲管道，以確保我們能夠抓住網路遊戲中最有前景和最有價值的長期趨勢。我們在各個高成長市場不斷增長的全球影響力為我們提供了重要的本地洞察力和強大的本地營運能力，我們的內部開發團隊在開發現有遊戲和新創意時也充分利用了這一點。

Moreover, given our proven global track record, we have received more interest from studios keen to build strategic relationships with us. As such, our pace of investment in and partnerships with game studios worldwide has stepped up.

此外，鑑於我們在全球的成功經驗，越來越多的工作室對我們表現出濃厚的興趣，並渴望與我們建立策略關係。因此，我們對全球遊戲工作室的投資和合作步伐加快。

Now moving to e-commerce. Shopee continues to grow much more quickly than the overall market as we deliver ever greater value to our sellers and buyers. In the third quarter, Shopee recorded GAAP revenue growth of 134% from last year to reach $1.5 billion. It also recorded gross orders of $1.7 billion up 123% year-on-year. This is the ninth consecutive quarter of triple-digit year-on-year order growth for Shopee. Shopee's GMV was $16.8 billion, an increase of 81% since last year. With monetization continuing to improve, GAAP revenue as a percentage of total GMV rose to 8.6% from 6.7% in the third quarter of 2020. The stronger monetization was driven by growth across our revenue streams, including value-added services, transaction-based fees and advertising revenue.

現在轉向電子商務。隨著我們為賣家和買家提供更大的價值，Shopee 的成長速度繼續遠超整體市場。第三季度，Shopee 的 GAAP 營收較去年同期成長 134%，達到 15 億美元。該公司還實現總訂單量達 17 億美元，年增 123%。這是Shopee連續第九個季度實現三位數的年比訂單成長。Shopee的GMV為168億美元，較去年同期成長了81％。隨著貨幣化不斷改善，GAAP營收佔GMV總額的百分比從2020年第三季的6.7%上升至8.6%。更強勁的貨幣化動力來自於我們各項收入來源的成長，包括增值服務、以交易為基礎的費用和廣告收入。

In view of Shopee's performance, we are again raising our full year 2021 e-commerce guidance. We now expect e-commerce GAAP revenue to be between $5.0 billion and $5.2 billion, representing over 135% growth from 2020, at the midpoint of the revised guidance. Our previous e-commerce GAAP revenue guidance was between $4.7 billion and $4.9 billion.

鑑於Shopee的表現，我們再次上調了2021年全年電子商務預期。我們現在預計電子商務 GAAP 收入將在 50 億美元至 52 億美元之間，較 2020 年增長 135% 以上，即修訂後的指引中位數。我們先前的電子商務 GAAP 營收預期在 47 億至 49 億美元之間。

As with Garena, Shopee's focus on deepening engagement with our users is a winning strategy. We are helping sellers to be more competitive. For example, we have rolled out more features, tools and services to help them build engagement with their customers and grow their business. We recently launched a Seller Mission, an incentive program that rewards sellers with privilege as they complete certain tasks. The program gamifies the experience of sellers as it guides them through features and tools on Shopee that they can use to become better sellers.

與 Garena 一樣，Shopee 專注於深化與用戶的互動，這是一個成功的策略。我們正在幫助賣家提高競爭力。例如，我們推出了更多功能、工具和服務，幫助他們與客戶建立聯繫並發展業務。我們最近啟動了賣家使命，這是一項激勵計劃，當賣家完成某些任務時，他們會獲得特權作為獎勵。該計劃將賣家的體驗遊戲化，引導賣家使用 Shopee 上的功能和工具，使他們成為更好的賣家。

We also introduced the tools like Listing Optimizer, which helps sellers identify listings that can be improved and how to improve them. These initiatives help sellers grow on the Shopee platform and create better experiences for our buyers too.

我們還推出了 Listing Optimizer 等工具，幫助賣家識別可以改進的 Listing 以及如何改進它們。這些舉措有助於賣家在 Shopee 平台上成長，同時也為我們的買家創造更好的體驗。

We also recently celebrated the first anniversary of Shopee Premium, a dedicated space on Shopee for select brand partners in the luxury segment. Since launch, we have doubled the number of Shopee Premium brands. Through a more immersive shopping experience, Shopee Premium helps brands share their stories and build deeper personalized relationships with buyers. And for our buyers, we continue to roll out captivating content and activities, such as our hugely popular double day sales.

我們最近也慶祝了 Shopee Premium 一週年，這是 Shopee 上為奢侈品領域的精選品牌合作夥伴提供的專用空間。自推出以來，Shopee Premium 品牌的數量已經增加了一倍。透過更身臨其境的購物體驗，Shopee Premium 幫助品牌分享他們的故事並與買家建立更深層的個人化關係。對於我們的買家，我們將繼續推出引人入勝的內容和活動，例如廣受歡迎的雙日促銷。

Last week, Shopee had a fantastic double 11.11 shopping festival with widespread success. It was especially heartening to see an uplift in participation from consumers in rural and smaller towns as they enjoy the convenience and a wide assortment on Shopee.

上週，Shopee 舉辦了精彩的雙 11.11 購物節，獲得了巨大成功。尤其令人欣慰的是，農村和小城鎮的消費者在享受 Shopee 帶來的便利和豐富選擇的同時，參與度也有所提升。

Additionally, our new local sellers also benefited through a substantial increase in sales during the festival period. These shopping festivals showcase the numerous ways in which we serve and engage with our community, and its success exemplifies Shopee's strengthening position as the go-to marketplace for our consumers. Our focus on engagement and adding value for our community is the key factor in our sustained strong user metrics.

此外，我們的新本地賣家也受益於節日期間銷售額的大幅成長。這些購物節展示了我們服務和與社區互動的眾多方式，它的成功體現了 Shopee 作為消費者首選市場地位的不斷加強。我們專注於參與並為社群增加價值，這是我們持續保持強勁用戶指標的關鍵因素。

According to App Annie, globally on Google Play, Shopee ranked first in the shopping category by total time spent in app and second, by downloads and average monthly active users in the third quarter. Shopee also continued to be the top-ranked app in the shopping category in both Southeast Asia and Taiwan by average monthly active users and the total time spending app during the quarter. Shopee was the leading app across the same metrics in Indonesia where we recorded another quarter of triple-digit year-on-year order growth.

根據 App Annie 的數據，在第三季度，Shopee 在 Google Play 全球購物類別中按應用程式總使用時間排名第一，按下載量和平均每月活躍用戶排名第二。本季度，Shopee 也繼續成為東南亞和台灣購物類別中平均每月活躍用戶數和總使用時間最多的應用程式。Shopee 是印尼同項指標中領先的應用程序，我們在該季度又錄得三位數的同比訂單增長。

Shopee also continued to make good progress in Brazil. In the third quarter, it was once again ranked first by download and the total time spent in app. And second by average monthly active users for the shopping category according to App Annie. While Brazil is still a young market for us, our local teams are focused on better understanding our growing community of local buyers and sellers and improving the experience we offer to them. We believe that our deepening engagement with the local community is a promising sign of this market's long-term potential for Shopee.

Shopee 在巴西也持續取得良好進展。第三季度，其下載量和應用程式總使用時間再次位居第一。根據 App Annie 的數據，購物類別的平均每月活躍用戶數排名第二。雖然巴西對我們來說仍然是一個年輕的市場，但我們的當地團隊致力於更好地了解不斷成長的當地買家和賣家社區，並改善我們為他們提供的體驗。我們相信，我們與當地社區的深入合作是 Shopee 在這個市場具有長期潛力的一個好兆頭。

Shopee's total adjusted EBITDA loss per order across all markets was $0.41 in the third quarter. As we have said previously, we are committed to investing efficiently and growing in a sustainable manner across all our markets as Shopee scales. And with that in mind, we are pleased to note that adjusted EBITDA loss per order improved both on a year-on-year and quarter-on-quarter basis in Southeast Asia and Taiwan combined as well as in Shopee's other markets combined.

第三季度，Shopee 所有市場每筆訂單的調整後 EBITDA 總虧損為 0.41 美元。正如我們之前所說，隨著 Shopee 規模的擴大，我們致力於在所有市場中進行有效投資並以可持續的方式發展。考慮到這一點，我們很高興地註意到，東南亞和台灣地區以及 Shopee 其他市場的平均每筆訂單調整後 EBITDA 損失同比和環比均有所改善。

Looking ahead, we are prudently and efficiently exploring how to maximize our largest addressable opportunities, given our growing market position. In the recent months, we launched Shopee in Poland, France, Spain and India. From time to time, we may test the waters in new markets where we believe there may be an opportunity to use our experience in highly diverse environment to reach underserved buyers and sellers. On the one hand, our core focus remains managing our efficient and sustainable growth in Southeast Asia, Taiwan and Brazil, where we have established and are continuing to grow our strong presence serving local sellers and buyers. On the other hand, the opportunities we can address through efficiently leveraging the Shopee platform in existing markets and expanding into new markets have increased. We will continue to exercise prudence and maintain flexibility as we pursue the significant growth opportunities with accelerating investments.

展望未來，鑑於我們不斷增長的市場地位，我們正在謹慎而有效地探索如何最大限度地挖掘我們最大的潛在機會。最近幾個月，我們在波蘭、法國、西班牙和印度推出了 Shopee。有時，我們可能會在新市場進行試水，我們相信在那裡可能有機會利用我們在高度多樣化環境中的經驗來接觸服務不足的買家和賣家。一方面，我們的核心重點仍然是管理我們在東南亞、台灣和巴西的高效和永續成長，我們在這些地區已經建立並將繼續發展強大的業務，為當地賣家和買家提供服務。另一方面，透過在現有市場有效利用Shopee平台以及拓展新市場，我們可以抓住的機會也增加了。我們將繼續保持審慎和靈活性，透過加速投資來尋求重大成長機會。

Turning to our digital financial services business. SeaMoney recorded excellent results in the third quarter. The total payment volume of our mobile wallet services grew by 111% year-on-year to reach $4.6 billion. Quarterly paying users of our mobile wallet services increased to over $39 million, up 120% year-on-year. One of our key areas of focus is expanding the number of use cases for our mobile wallet so that we can serve more businesses and add greater value for our users.

轉向我們的數位金融服務業務。SeaMoney 第三季取得了優異的表現。我們的行動錢包服務的總支付額年增111%，達到46億美元。我們的行動錢包服務的季度付費用戶增加到3,900多萬美元，年增120%。我們關注的重點領域之一是擴大行動錢包的使用案例數量，以便我們能夠服務更多企業並為用戶創造更大的價值。

In the recent months, we've partnered with more online and offline merchants such as Google Play in Malaysia, Blue Bird Taxi in Indonesia, FamilyMart in Thailand and Lotte Cinema in Vietnam. As we grow the number of use cases, we are naturally seeing an increase in consumer adoption of our mobile wallets as more people grow to appreciate the ease and the convenience that our platform offers. And as our user base grows, we see growing interest from merchants wanting to work with us, creating a positive flywheel effect that we believe will drive increasingly efficient growth for SeaMoney.

最近幾個月，我們與更多線上和線下商家合作，例如馬來西亞的 Google Play、印尼的 Blue Bird Taxi、泰國的 FamilyMart 和越南的樂天劇院。隨著使用案例數量的增長，我們自然會看到消費者對我們的行動錢包的採用率增加，因為越來越多的人開始欣賞我們平台提供的輕鬆和便利。隨著我們用戶群的成長，我們看到越來越多的商家希望與我們合作，從而產生積極的飛輪效應，我們相信這將推動 SeaMoney 日益高效的成長。

Besides our mobile wallet business, we have launched early initiatives in other digital financial services such as buy now pay later, digital bank and insurtech. These products are still in the early development phase, and we are currently focused on strengthening our models and operations.

除了行動錢包業務外，我們還在其他數位金融服務領域啟動了早期舉措，例如先買後付、數位銀行和保險科技。這些產品仍處於早期開發階段，我們目前專注於加強我們的模型和營運。

In line with our mission to serve the underserved segment in our market, we intend to roll out more of these digital financial products in a thoughtful manner with our customary focus on long-term sustainable growth. We are excited about the significant long-term growth potential of the opportunity that SeaMoney addresses, and we believe we are well positioned to serve this opportunity by building on our strong technology core and our unique insights on and relationships with consumers and businesses across our markets.

本著為市場上服務不足的群體提供服務的使命，我們打算以周到的方式推出更多此類數位金融產品，並一如既往地關注長期可持續增長。我們對 SeaMoney 所面臨的機會的巨大長期成長潛力感到非常興奮，我們相信，透過利用我們強大的技術核心以及我們對各個市場消費者和企業的獨特見解和關係，我們完全有能力抓住這一機會。

Last but not least, I'm very pleased to announce Chris Feng's appointment as Sea's Group President effective from January 1, 2022. Chris is an exceptional business leader who has delivered outstanding results for Sea and deeply embodies our core values. He, together with the rest of the leadership team and our hugely talented Sea team, have not only driven our business forward, but also significantly furthered Sea's mission to better the lives of consumers and small businesses with technology.

最後但同樣重要的一點是，我很高興地宣布 Chris Feng 被任命為 Sea 集團總裁，自 2022 年 1 月 1 日起生效。克里斯是一位傑出的商業領袖，他為 Sea 帶來了出色的業績，深刻體現了我們的核心價值。他與領導團隊的其他成員和我們才華橫溢的 Sea 團隊一起，不僅推動了我們的業務向前發展，而且極大地推進了 Sea 利用技術改善消費者和小型企業生活的使命。

Going forward, Chris will continue to directly report to me and operate our Shopee and SeaMoney businesses. In addition, as Group President, Chris will work closely with me and the rest of the group leadership team on our long-term strategic initiatives with an increasing focus on synergy creation across our various businesses.

展望未來，克里斯將繼續直接向我報告並經營我們的 Shopee 和 SeaMoney 業務。此外，身為集團總裁，克里斯將與我以及集團領導團隊的其他成員密切合作，制定長期策略計劃，並更加重視跨業務創造協同效應。

In closing, our first core value at Sea is we serve. And this continues to inform everything we do. We believe that technology holds the greatest potential to improve people's lives, and we believe that in the current environment, our commitment to serving the unmet needs of our communities through technology has never been more important. In the quarters ahead, we will continue to focus on connecting communities, enabling consumers and empowering small businesses so that more people can benefit from the growth of the digital economy. With that, I will invite Tony to discuss our financials.

最後，我們海上的第一核心價值就是服務。這將繼續指導我們所做的一切。我們相信科技具有改善人們生活的最大潛力，我們相信在當前環境下，我們透過科技滿足社區未滿足的需求的承諾從未如此重要。在未來的幾個季度裡，我們將繼續致力於連結社區、賦能消費者和增強小型企業的能力，以便更多的人能夠從數位經濟成長中受益。因此，我將邀請托尼來討論我們的財務狀況。

Thank you, Forrest, and thank you to everyone for joining the call. We have included detailed financial schedules together with the corresponding management analysis in today's press release, and Forrest has discussed some of our financial highlights. So I will focus my comments on the other relevant metrics.

謝謝你，福雷斯特，也謝謝大家參加電話會議。我們在今天的新聞稿中提供了詳細的財務時間表以及相應的管理分析，Forrest 也討論了我們的一些財務亮點。因此，我將重點討論其他相關指標。

For Sea overall, total GAAP revenue increased 122% year-on-year to $2.7 billion. This was mainly driven by growth in the scale of our e-commerce business as we continue to deepen the engagement with our users as well as the growth of digital entertainment business, especially our self-developed game, Free Fire. Digital entertainment bookings grew 29% year-on-year to $1.2 billion. GAAP revenue was up 93% year-on-year to $1.1 billion. The growth was primarily driven by the increase of our active user base and deepened paying user penetration as we continue to engage the community through quality content and immersive experiences. Digital entertainment adjusted EBITDA was $715 million. This represents year-on-year growth of 22%, and was mainly driven by the top line growth.

就 Sea 整體而言，其 GAAP 總營收年增 122%，達到 27 億美元。這主要得益於我們隨著與用戶的不斷深化互動而帶來的電子商務業務規模的成長，以及數位娛樂業務的成長，尤其是我們自主開發的遊戲《Free Fire》。數位娛樂預訂金額較去年同期成長29%，達到12億美元。GAAP 營收年增 93% 至 11 億美元。隨著我們繼續透過優質內容和沈浸式體驗吸引社區，成長主要得益於我們活躍用戶群的增加和付費用戶滲透率的提高。數位娛樂調整後的 EBITDA 為 7.15 億美元。這比去年同期成長了 22%，主要得益於營收成長。

On e-commerce, our third quarter GAAP revenue of $1.5 billion included GAAP marketplace revenue of $1.2 billion, up 151% year-on-year. And GAAP product revenue of $0.3 billion, up 82% year-on-year. The strong results demonstrated the deepening penetration of e-commerce and our ability to capture these significant growth opportunities. E-commerce adjusted EBITDA loss was $684 million as we continued our investment to fully capture the opportunities in our markets. We remain committed to continue investing in a prudent and sustainable manner and growing the ecosystem to serve our users better.

在電子商務方面，我們第三季的 GAAP 營收為 15 億美元，其中包括 GAAP 市場營收 12 億美元，年增 151%。而GAAP產品營收為3億美元，較去年成長82%。強勁的業績證明了電子商務的滲透率不斷提高，以及我們抓住這些重大成長機會的能力。由於我們繼續投資以充分抓住市場機遇，電子商務調整後的 EBITDA 損失為 6.84 億美元。我們將繼續致力於以審慎和可持續的方式進行投資，並發展生態系統，以更好地服務我們的用戶。

Digital financial services GAAP revenue was $132 million, an increase of 818% year-on-year from $14.4 million in the third quarter of 2020. The growth was primarily due to increasing traction as we continue to expand our suite of service offerings. Adjusted EBITDA loss was $159 million compared to a loss of $149 million in the same period of 2020. This was primarily due to our continued efforts to drive mobile wallet adoption.

數位金融服務 GAAP 營收為 1.32 億美元，較 2020 年第三季的 1,440 萬美元年增 818%。成長主要歸因於我們不斷擴展服務產品組合所帶來的成長動力。調整後 EBITDA 虧損為 1.59 億美元，而 2020 年同期的虧損為 1.49 億美元。這主要歸功於我們不斷努力推動行動錢包的普及。

Returning to our consolidated numbers. We recognized a net nonoperating loss of $13 million in the third quarter of 2021 compared to a net nonoperating loss of $74 million in the third quarter of 2020. Our nonoperating loss in the third quarter of 2021 was primarily due to interest expenses on our convertible notes, partially offset by foreign exchange gains. We had a net income tax expense of $101 million in the third quarter of 2021, which was primarily due to corporate income tax and withholding tax recognized in our digital entertainment business. As a result, net loss, excluding share-based compensation, was $448 million in the third quarter of 2021 as compared to $346 million for the same period in 2020. With that, let me turn the call to Min Ju.

回到我們的合併數字。我們確認 2021 年第三季的淨非營業虧損為 1,300 萬美元，而 2020 年第三季的淨非營業虧損為 7,400 萬美元。我們 2021 年第三季的非營業虧損主要是由於可轉換票據的利息支出，部分被外匯收益所抵銷。我們 2021 年第三季的淨所得稅支出為 1.01 億美元，主要由於我們的數位娛樂業務確認的企業所得稅和預扣稅。因此，2021 年第三季不包括股權激勵費用的淨虧損為 4.48 億美元，而 2020 年同期為 3.46 億美元。說完這些，我把電話轉給 Min Ju。

Thank you, Forrest, and Tony. Our management team here today, Forrest, Tony and Yanjun are now ready to open the call for questions.

謝謝你，福雷斯特和托尼。今天，我們的管理團隊 Forrest、Tony 和 Yanjun 已準備好開始回答大家的問題。

Operator?

操作員？

And we will now begin the question-and-answer session. (Operator Instructions) Our first question today will come from Alicia Yap of Citigroup.

我們現在開始問答環節。（操作員指示）我們今天的第一個問題來自花旗集團的 Alicia Yap。

Congrats on the solid results. Two questions here. First, I guess, Forrest mentioned on the Shopee entering Europe, for example, Poland, and also more countries in LatAm. Can you elaborate what is the target you wanted to achieve, especially from the European countries? What kind of KPI that you will monitor to assess that your progress is well achieved and to -- potentially to evaluate to invest more? And then second question is on Free Fire. With the Free Fire quarterly addition of active user slowdown to single digit in the third quarter, will this suggest more or less saturated penetration of Free Fire user TAM? Or will there be room for further reaccelerated with more new games launch and more new content launch within the Free Fire. So any color you could share would be appreciated.

恭喜您取得堅實的成果。這裡有兩個問題。首先，我想，Forrest 提到了 Shopee 進入歐洲，例如波蘭，以及拉丁美洲的更多國家。您能詳細說明您想要實現的目標是什麼嗎，特別是針對歐洲國家？您將監控什麼樣的 KPI 來評估您的進度以及是否可能評估是否進行更多投資？第二個問題是關於 Free Fire 的。隨著 Free Fire 季度活躍用戶數在第三季放緩至個位數，這是否意味著 Free Fire 用戶 TAM 的滲透率或多或少已經飽和？或者隨著更多新遊戲的推出和更多新內容在 Free Fire 的推出，是否還有進一步加速的空間。因此，如果您能分享任何顏色，我們將不勝感激。

Thank you, Alicia. Happy to. So in terms of the e-commerce expansion, as we mentioned that our focus, first and foremost, is on our markets, existing markets in Southeast Asia, Taiwan, as well as the new growth market in Brazil, where we have achieved a very strong presence. And we may, of course, from time to time, test the waters in new markets in other parts of the world, given our past experience operating many different markets, including a highly diverse market in Southeast Asia and Taiwan and Brazil also being a different market from these other markets in Asia.

謝謝你，艾莉西亞。很開心。因此，就電子商務擴張而言，正如我們所提到的，我們的重點首先是我們的市場，即東南亞、台灣的現有市場，以及巴西的新興成長市場，我們在這些市場已經取得了非常強大的影響力。當然，鑑於我們過去經營許多不同市場的經驗，我們可能不時在世界其他地區的新市場進行試水，包括高度多樣化的東南亞市場以及台灣和巴西，這些市場也不同於亞洲其他市場。

We believe that we have gained a deep operational experience in operating in different markets as well as understanding of our business model focusing on mobile native, social commerce driven and long-tail high diverse categories that -- so especially the local sellers and buyers who might be underserved in their existing markets. However, of course, we are -- remain very humble. Being humble is one of our core values, in fact, and we constantly tell ourselves that we need to carefully evaluate all these market opportunities, as we learn. At the same time, we should develop a localized and tailored solution for each market. We wouldn't make any assumptions. We believe that, hopefully, our entrance could add value to the markets and see potential new growth areas that could also further promote the local e-commerce growth together with our peers.

我們相信，我們在不同市場運營方面獲得了深厚的營運經驗，並且對我們的商業模式有了深入的了解，專注於行動原生、社交商務驅動和長尾高多樣化類別，特別是現有市場中可能得不到充分服務的本地賣家和買家。然而，當然，我們仍然非常謙虛。事實上，謙虛是我們的核心價值之一，我們不斷告訴自己，在學習的過程中，我們需要仔細評估所有這些市場機會。同時，我們應該針對每個市場制定在地化、客製化的解決方案。我們不會做任何假設。我們相信，希望我們的進入能為市場增加價值，並發現潛在的新成長領域，並能與我們的同行一起進一步促進本地電子商務的成長。

However, we don't have a -- we haven't set any fixed KPI. I think it's still at a very nascent exploratory stage. We are optimistic of our Shopee's long-term growth because we believe there is a global need for -- demand for our business model is servicing the small business sellers as well as underserved consumers through our model.

但是，我們沒有設定任何固定的 KPI。我認為它仍處於非常早期的探索階段。我們對 Shopee 的長期成長持樂觀態度，因為我們相信全球需要我們的商業模式，即透過我們的模式為小型企業賣家和服務不足的消費者提供服務。

In terms of the Free Fire growth, of course, we've enjoyed a very strong growth, and Free Fire being one of the largest mobile games perhaps in history so far, and we continue to see strong user base. In fact, if we look at our metrics across the board, they have improved not only year-on-year, but also quarter-on-quarter versus very tough comps during the -- especially during the past period where both of our markets were deeply affected by COVID.

就《Free Fire》的成長而言，我們當然享受了非常強勁的成長，《Free Fire》可能是迄今為止史上最大的手機遊戲之一，而且我們繼續看到強大的用戶群。事實上，如果我們全面審視我們的指標，我們會發現不僅同比有所改善，而且與去年同期相比也有所改善——尤其是在過去兩個市場都受到 COVID 嚴重影響的時期。

Now as people -- the vaccine rate gets up across the world and also our communities generally learn to adapt to the situation, I think there is more of a normalized approach now. And we are looking at more of a pre-COVID -- back to more of a pre-COVID environment in terms of the game operations. However, our user growth continued to sustain itself and especially in the newer markets that we have entered.

現在，隨著世界各地的疫苗接種率上升以及我們的社區普遍學會適應這種情況，我認為現在採取了更正常化的方法。就遊戲運作而言，我們正在關注更多疫情之前的環境——回到疫情前的環境。然而，我們的用戶成長持續保持穩定，特別是在我們進入的新市場。

So going forward, we're looking to; a, sustain our existing strong user base in the existing markets and explore new growth opportunities in markets that we haven't deeply penetrated especially with the launch of Free Fire MAX and new features, including tools for user-generated content such as Craftland and other tools we might introduce and features we might introduce to the game in the future. We are further focused on building out our strong IP and platform. Now with more than 700 million quarterly active users and growing, we believe that this -- the platform itself can be further enhanced to really include more modes, more features, different ways of entertainment and socializing among our user communities as well as introducing more online, offline collaborations with IPs, including Fashion Week that Forrest just mentioned to further build out this IP as well as the platform and maximizing our long-term potential of Free Fire.

展望未來，我們期待； a、在現有市場中維持我們現有的強大用戶群，並在我們尚未深入滲透的市場中探索新的成長機會，特別是隨著 Free Fire MAX 和新功能的推出，包括用於用戶生成內容的工具（如 Craftland）以及我們將來可能引入遊戲的其他工具和功能。我們進一步致力於打造我們強大的 IP 和平台。現在，我們的季度活躍用戶超過 7 億並且還在不斷增長，我們相信，平臺本身可以進一步增強，真正包含更多模式、更多功能、用戶社區中不同的娛樂和社交方式，以及與 IP 進行更多線上、線下合作，包括 Forrest 剛才提到的時裝週，以進一步打造這個 IP 和平台，並最大限度地發揮 Free Fire 的長期潛力。

We will continue to focus on that as well as continue to build up our game pipeline with more diversified genres from our self-developed pipeline as well as publishing as well as our investment pipeline. So that's going to be our focus in the near to longer term, we continue to see a long-term potential for the game.

我們將繼續專注於此，並持續透過自主開發、發行和投資等多種方式拓展我們的遊戲產品線，打造更為多元的遊戲類型。所以這將是我們近期和長期的關注重點，我們繼續看到該遊戲的長期潛力。

Our next question today will come from Piyush Choudhary of HSBC.

今天的下一個問題來自匯豐銀行的 Piyush Choudhary。

Congratulations. Two questions for me. Firstly, Free Fire MAX was launched in late September. So could you give us some insights on user engagement? How is that option and time spent? How different is it from Free Fire? And how does it impact your 2022 outlook? Second question is on the Sea capital. Could you give us an update how much of initial $1 billion capital is already deployed? And there was some media news around investment in Forte. Is that correct? And if yes, then what's the strategic rationale for the same?

恭喜。我有兩個問題。首先，《Free Fire MAX》於9月底上線。那麼您能否向我們介紹一些使用者參與度的見解呢？該選項和時間是如何花費的？它與 Free Fire 有何不同？這對您的 2022 年展望有何影響？第二個問題是關於海上首都。您能否告訴我們，在最初的 10 億美元資本中，已經部署了多少？媒體上還有一些關於對 Forte 投資的新聞。那正確嗎？如果是，那麼其戰略依據是什麼？

Thank you, Piyush. In terms of Free Fire MAX, it is still at very early stage. We already see some positive and encouraging signs within our expectation of deeper engagement with users who have higher spec phones and they can enjoy higher resolution pictures and more features, et cetera. But very importantly, we make sure using our proprietary technology to fully integrate Free Fire and Free Fire MAX so that users playing both versions can play together in the same game and also user can use the same account to log into both versions.

謝謝你，皮尤什。就 Free Fire MAX 而言，它仍處於非常早期的階段。我們已經看到了一些積極的、令人鼓舞的跡象，我們期望與擁有更高規格手機的用戶進行更深入的互動，他們可以享受更高解析度的圖像和更多的功能等等。但非常重要的是，我們確保使用我們的專有技術完全整合 Free Fire 和 Free Fire MAX，以便玩兩個版本的用戶可以在同一個遊戲中一起玩，並且用戶可以使用同一個帳戶登入兩個版本。

And also within Free Fire MAX, we have introduced some features such as Craftland, which allows people to edit map and customize it and make it available for other users. This is our initial attempt in creating more user generation, content tools for our community engagement and bringing more creativity from our communities into the game itself. So I think there are a lot of exciting developments that are to be rolled out in Free Fire MAX, and as well as in Free Fire. So we are very much looking forward to the fourth quarter and ahead to continue to grow this game.

此外，在 Free Fire MAX 中，我們還引入了一些功能，例如 Craftland，它允許人們編輯地圖並對其進行自訂，並使其可供其他使用者使用。這是我們首次嘗試創造更多的用戶生成、內容工具以促進社群參與，並將更多來自社群的創造力帶入遊戲本身。因此我認為在 Free Fire MAX 以及 Free Fire 中將會推出許多令人興奮的發展。因此，我們非常期待第四季並繼續發展這款遊戲。

In terms of Sea Capital, well, we don't specifically disclose investment amounts. It's important to focus on supporting our ecosystem as well as innovation as a core mission of not just Sea, but also the different arms of Sea including Sea Capital where that team will continue. As we mentioned before, the theme is to focus on supporting innovation, supporting founding teams and -- who are providing better services and enabling our communities through technology that are generally aligned with our mission to serve our communities with technology. And the Forte investment is part of that effort as well.

就 Sea Capital 而言，我們不會具體揭露投資金額。重要的是專注於支持我們的生態系統和創新，這不僅是 Sea 的核心使命，也是 Sea 不同部門的核心使命，包括該團隊將繼續運作的 Sea Capital。正如我們之前提到的，主題是專注於支持創新、支持創始團隊以及——他們提供更好的服務並透過技術為我們的社區提供支持，這與我們用技術服務社區的使命大體一致。對 Forte 的投資也是這項努力的一部分。

Our next question will come from Piyush Mubayi of Goldman Sachs.

我們的下一個問題來自高盛的 Piyush Mubayi。

Yanjun, you talked about normalization post COVID, could you take us through the range of possible outcomes as we come out of COVID? Given your footprint across gaming and e-commerce, it's slightly confusing. If I live through the e-commerce businesses that you're in and in those jurisdictions, it's likely to be an economic boost that you will see, which, in theory, should be great for e-commerce company, maybe your e-commerce footprint. And when I look at it on the gaming side, well, there will be greater degrees of affordability and that does have repercussions for what you're paying ratios could be. But I can understand in markets like the U.S., it would have a different impact. So if you could take us through what you think the post-COVID world could look like for you? And how -- and what's the right normal number we should be looking at? I'd be grateful. That's my first question.

嚴軍，您談到了新冠肺炎疫情過後經濟恢復的正常化，能否為我們介紹一下疫情過後可能出現的各種結果？考慮到您在遊戲和電子商務領域的足跡，這有點令人困惑。如果我經歷過您所在的電子商務業務以及這些司法管轄區的情況，您可能會看到經濟成長，從理論上講，這對電子商務公司來說應該是件好事，甚至對您的電子商務足跡也有好處。而當我從遊戲角度來看時，遊戲的可負擔程度將會更高，這確實會對你的支付比率產生影響。但我可以理解，在美國這樣的市場，它會產生不同的影響。那麼，您能否向我們介紹一下，您認為後疫情時代的世界會是什麼樣子呢？我們如何－我們應該關注的正確正常數字是多少？我將非常感激。這是我的第一個問題。

And my second question, again, a big-picture question. You talked initially about helping merchants build out and leverage the platform to go across the world. Could you take us through where you think that process is in the buildup of the merchant base in countries like Indonesia and compared to where the cycle that we've seen in China? And give us a feel for what -- which innings we are in, in the baseball context?

我的第二個問題同樣是一個宏觀問題。您最初談到幫助商家建立和利用平台走向世界各地。您能否向我們介紹一下您認為印尼等國家的商人基礎建設過程是怎樣的，以及與我們在中國看到的周期相比如何？讓我們感受一下——在棒球比賽中，我們處於哪個局？

Thank you, Piyush. In terms of COVID, I think we are already living in a more normalized time. I believe the Q3 results partly reflect that, in fact. So we continue to see strong growth from e-commerce sites across various markets. Now we discussed it before during -- I believe, a few quarters earlier when COVID hit. There are different scenarios. One is -- on the one hand, there is tailwind coming from social distancing rules where people rely more on online shopping to fulfill their consumption needs because of social distancing rules as well as for safety measures. On the other hand, if in the longer run, there is a significant impact on economies, there could be downward pressure on overall consumption that could also affect e-commerce industry as a whole and how much of that impact might be felt by us individually remains to be seen.

謝謝你，皮尤什。就 COVID 而言，我認為我們已經生活在一個更正常化的時期。事實上，我相信第三季的業績在某種程度上反映了這一點。因此，我們繼續看到各個市場電子商務網站的強勁成長。我想，我們在之前幾季 COVID 爆發時就討論過這個問題。有不同的情況。一方面，社交距離規則帶來了順風，由於社交距離規則以及安全措施，人們更依賴網上購物來滿足消費需求。另一方面，如果從長遠來看，對經濟產生重大影響，那麼整體消費可能會面臨下行壓力，這也會影響整個電子商務產業，而我們個人能感受到多大影響還有待觀察。

Now looking at our current trends and results, we believe that on the one hand, the step-up in digitalization in our markets, the forming of user behavior to shop online and also sell things online by more of the especially the small businesses and even the brands are permanent here to stay. Meanwhile, we haven't seen any particular economies being so deeply or permanently impacted by COVID that there is clearly an impact on consumption. And at least from our perspective as a market leader, we continue to grow in our market leadership, especially in our markets, which are generally high-growth markets with low e-commerce penetration, we continue to see long-term growth potential.

現在回顧我們目前的趨勢和結果，我們認為，一方面，我們市場數位化的步伐加快，用戶在線購物和在線銷售的行為的形成，尤其是小型企業和品牌，都將永久存在。同時，我們還沒有看到任何一個特定的經濟體受到新冠疫情如此深刻或持久的影響，以至於對消費產生明顯的影響。至少從我們作為市場領導者的角度來看，我們的市場領導地位不斷增長，特別是在我們的市場，這些市場一般都是電子商務滲透率較低的高成長市場，我們繼續看到長期成長潛力。

So on that front, we are quite optimistic about the long-term growth potential of e-commerce. Of course, in normalized stage, when you do year-on-year comparison, the comp is generally tough for all e-commerce companies. I think Shopee has done -- our teams have done a great job and continue to grow at triple-digit rates for so many quarters. And that was a lot of efforts, and we also applaud our sellers communities and their efforts in working with us. And that actually leads to the second question on how we grow our merchant base to help them grow more. I think that our merchants are -- especially as we focus more on the small business sellers, they need more handholding and also more help in managing their business.

因此從這方面來看，我們對電子商務的長期成長潛力非常樂觀。當然，在正常化階段，當你進行同比比較時，所有電子商務公司的競爭通常都很激烈。我認為 Shopee 已經做到了——我們的團隊做得非常出色，並且在這麼多季度中繼續以三位數的速度成長。這需要付出很多努力，我們也讚揚我們的賣家社群和他們與我們合作的努力。這實際上引出了第二個問題：我們如何擴大我們的商家基礎以幫助他們實現更大的發展。我認為我們的商家——特別是當我們更加關注小型企業賣家時，他們需要更多的指導以及更多幫助來管理他們的業務。

We started with a very basic tools, teaching them how to take a picture of their products to be -- nicely to be sold online, how to describe their products accurately to be picked up by the right keyword searches from all the way to how to manage inventory, how to manage marketing to maximize ROI, how to manage your accounts and finance. So we have all levels of classes for our merchants as well as many Shopee centers set up everywhere that we can help them with tools and develop the online tools and mobile tools, game features, social features as many ways as we can reach them very deeply to help them manage their sales. And of course, from the platform perspective, we also offer integrated payment and logistics services to make things much easier for them.

我們從非常基本的工具開始，教他們如何拍攝要在網上銷售的產品的照片，如何準確描述他們的產品以便透過正確的關鍵字搜尋找到它們，如何管理庫存，如何管理行銷以最大化投資回報率，如何管理帳戶和財務。因此，我們為商家提供各個級別的課程，並在各地設立許多 Shopee 中心，為他們提供工具，開發線上工具和行動工具、遊戲功能、社交功能，透過多種方式深入接觸他們，幫助他們管理銷售。當然，從平台的角度來看，我們也提供整合​​的支付和物流服務，以方便他們的業務。

Now on international potential, we have been very focused on helping our Indonesian merchants to also globally sell their products and -- that's are in demand. For example, using our international programs that their products can be mapped easily onto a different markets UI without them having to learn different languages and do a lot of tweaking. And that's done through our in-house technology. So there are many tools we have developed to help them by making this as smooth as possible.

現在，就國際潛力而言，我們一直非常注重幫助我們的印尼商人在全球銷售他們的產品，這是有需求的。例如，使用我們的國際計劃，他們的產品可以輕鬆地映射到不同市場的 UI 上，而無需學習不同的語言和進行大量調整。這是透過我們的內部技術實現的。因此，我們開發了許多工具來幫助他們，使這個過程盡可能順利。

On the game side, I think, as I mentioned, the post-COVID normalization, as you can see, we have more of a stable user base. But on the -- however, even against very tough comps, we see improvements year-on-year and Q-on-Q pretty much across all our metrics. So I think that has already shown a great achievement by our game team. However, in the longer run, we continue to see growth opportunities both in Free Fire itself with new features, new modes, new collaborations and new IPs and being introduced into it as well as our further growing game pipeline through self-development, publishing and investment partnerships. So we are very positive on the game outlook as well.

在遊戲方面，我認為，正如我所提到的，在疫情後正常化過程中，正如你所看到的，我們擁有更穩定的用戶群。但是，即使面對非常艱難的競爭，我們也看到所有指標較去年同期和季比都有所改善。所以我認為這已經表明我們的遊戲團隊取得了巨大的成就。然而，從長遠來看，我們將繼續看到 Free Fire 本身的成長機會，包括新功能、新模式、新合作和新 IP，以及透過自主開發、出版和投資夥伴關係引入的進一步成長的遊戲管道。因此我們對遊戲前景也非常樂觀。

And our next question today will come from Venugopal Garre of Bernstein.

今天的下一個問題來自伯恩斯坦的 Venugopal Garre。

My first question is, again, on the expansion in the new geography. And I was curious to understand that given that we've seen a number of countries that you've entered in the last couple of months, are we done in terms of the choice of countries that we wanted to do in terms of global expansion? And secondly, when we sort of observed the user awareness campaigns and things centered post the launch, we haven't clearly seen any major activities around that. While you're using probably social media as a platform even things like Instagram, we don't really see too many followers as yet. So I wanted to understand how are you approaching these while we're testing waters? But to what extent are we -- would we have to actually spend incrementally, which could, of course, alter a bit of the cost structure for the e-commerce business as well as we go forward. That's the first question.

我的第一個問題還是關於新地理區域的擴張。我很好奇，鑑於我們在過去幾個月中看到你們進入了許多國家，那麼從全球擴張的角度來看，我們是否已經完成了想要進入的國家的選擇？其次，當我們觀察用戶意識活動和發布後關注的事情時，我們並沒有清楚地看到圍繞此的任何重大活動。雖然您可能正在使用社交媒體作為平台，甚至像 Instagram 這樣的平台，但我們目前還沒有看到太多的追蹤者。所以我想了解一下，在我們試水時您是如何處理這些問題的？但是，我們實際上需要在多大程度上逐步增加支出，這當然可能會改變電子商務業務的一些成本結構。這是第一個問題。

The second one is somewhere down the line in the press release as well, you mentioned on the cost side for e-commerce, logistics is one of the reasons for the increase as well. Wanted to understand from a sustainability perspective, is it more driven by any freight rate increases that we've been seeing of late globally, especially with a larger cross-border effort midway given our geographic expansion or is it more driven by the value-added initiatives you are doing in ASEAN as well, which, of course, all of that comes to the take rate as well?

第二個問題也在新聞稿中提到，您提到電子商務的成本面，物流也是成本上漲的原因之一。想要從永續性的角度了解，它是否更多地受到我們最近在全球範圍內看到的運費上漲的推動，特別是考慮到我們的地域擴張而中途進行的更大規模的跨境努力，還是更多地受到您在東盟正在實施的增值舉措的推動，當然，所有這些都會影響到費率？

Thanks.

謝謝。

Okay. Thank you. On e-commerce questions. So regarding the global expansion, I think as we mentioned, we may test waters from time to time. And I think it's still too early to focus on those markets, and there's not much for us to report on. If we open a new market, I'm sure people will hear about it in the market otherwise. So I think there's not much to report on at this point. Now If I understand correctly, you're asking whether we have been employing social media tools like Instagram to promote our e-commerce platform. Is that the question?

好的。謝謝。關於電子商務的問題。因此，關於全球擴張，我認為正如我們所提到的，我們可能會不時地進行試水。我認為現在關注這些市場還為時過早，而且我們也沒有太多可報告的內容。如果我們開闢一個新市場，我相信人們會在市場上聽到這個消息。因此我認為目前沒有太多可報告的內容。如果我理解正確的話，您問的是，我們是否一直在使用 Instagram 等社群媒體工具來推廣我們的電子商務平台。這是問題嗎？

No. Rather, the question is that we haven't released any major brand advertising or any brand ambassadors or major awareness campaigns in each of these geographies. What we are actually seeing deploying social media. So we have seen -- we are seeing Instagram for example, you are having a lot of posts out there, but we don't really see too many followers for some of these social media and Instagram feeds and stuff like that. So wanted to understand from a cost structure point of view, at what stage will we have to kick start a fairly intense campaigns to create a user awareness because geographies like India is fairly large. So you would have to at some stage to allocate some amount of cost towards that?

不。相反，問題在於我們尚未在每個地區發布任何主要品牌廣告、任何品牌大使或主要宣傳活動。我們實際看到的是社群媒體的部署。所以我們看到——例如，我們看到 Instagram，你在那裡發布了很多帖子，但我們並沒有看到這些社交媒體和 Instagram 動態等的太多追蹤者。因此，想從成本結構的角度了解，在什麼階段我們必須啟動相當激烈的活動來提高用戶知名度，因為印度這樣的地域相當大。那麼您在某個階段必須為此分配一定金額的成本嗎？

Yes. I think India is still very -- at a very early stage. So we haven't really focused on widespread campaign nationwide. Again, but if you look at our other markets, we believe that we are very well followed on social media and -- in our Southeast Asia and the LatAm markets, especially. For the newer markets, again, I won't want to read too much into the current operations or numbers because it's really at a very nascent stage.

是的。我認為印度仍處於非常早期的階段。因此，我們並沒有真正集中精力在全國範圍內開展大規模的宣傳活動。再說一次，但如果你看看我們的其他市場，我們相信我們在社群媒體上非常受關注，尤其是在東南亞和拉丁美洲市場。對於較新的市場，我再次強調，我不想過度解讀當前的營運或數字，因為它確實處於非常早期的階段。

In terms of logistics and cross-border logistics, I think we -- as usual, we continue to partner with third-party logistic service providers to serve our sellers and buyers communities. Most of our buyers -- sellers, in fact, are primarily local sellers. So more focus is on connecting with local 3PLs to make sure the process is smooth and the delivery is timely and reliable for our users and also the cost can over time go down due to -- with efficiency and improvement on operations and deeper connections, integration with our platform.

在物流和跨境物流方面，我認為我們—像往常一樣，我們繼續與第三方物流服務提供者合作，為我們的賣家和買家社群提供服務。事實上，我們的大多數買家——賣家主要是本地賣家。因此，我們更加重視與本地第三方物流的連接，以確保流程順暢，為我們的用戶提供及時可靠的交付，同時由於營運效率的提高和更深層次的連接以及與我們平台的整合，成本可以隨著時間的推移而下降。

So this has not been a change in our overall strategy. While we do have Shopee Xpress last mile delivery services in certain markets, as a supplement to 3PL capacity, we continue to view it as a holistic -- from a holistic perspective to see how overall logistic service experience has been for our sellers and buyers? Whether we need to ramp up more our own Shopee Xpress delivery or we can rely more on the 3PLs? So on that front, we are very open-minded and adopt a highly pragmatic approach on this.

所以這並沒有改變我們的整體策略。雖然我們在某些​​市場確實有Shopee Xpress最後一哩配送服務，作為3PL能力的補充，但我們仍然將其視為一個整體——從整體的角度來看待我們的賣家和買家的整體物流服務體驗如何？我們是否需要加強我們自己的 Shopee Xpress 配送，或者我們可以更多地依賴第三方物流？因此，在這方面，我們非常開放並採取高度務實的態度。

Our next question will come from Ranjan Sharma of JPMorgan.

我們的下一個問題來自摩根大通的 Ranjan Sharma。

Two questions from my side. Firstly, on the gaming side, you have not changed your guidance. And based on your 9 months' results, it's indicating that the gaming portfolio is going to be declining in the fourth quarter despite the launch of Free Fire MAX. Is there any trends that make you guide this way? Or could there be some upside risk to the guidance? The second question is on the e-commerce basket size seems to be trending down. If you could help us understand what's driving that and if that could be turned around as well?

我有兩個問題。首先，在遊戲方面，你沒有改變你的指導。根據您過去 9 個月的業績，儘管推出了 Free Fire MAX，但第四季的遊戲組合仍將下降。是否有一些趨勢促使您以這種方式進行指導？或者該預期可能存在一些上行風險？第二個問題是電子商務購物籃的規模似乎呈現下降趨勢。您能否幫助我們了解造成這現象的原因以及是否可以扭轉這現象？

Yes. Thank you, Ranjan. Regarding the game side, as I mentioned, we are continuing to build our game franchise. Free Fire MAX, we primarily see as a user engagement to deepen with user engagement with user communities, offer more features and the possibilities to use especially those with phones having higher specs that can allow more high-resolution maps and features. So this is not for us, especially at this stage, a revenue driver. We believe our game guidance, given the beginning of the year has been a very strong guidance in terms of monetization given the comp versus last year. And the overall size of the game portfolio we have already achieved and scaling up so rapidly over the course of a few years.

是的。謝謝你，Ranjan。關於遊戲方面，正如我所提到的，我們正在繼續打造我們的遊戲系列。對於 Free Fire MAX，我們主要將其視為一種用戶參與，透過深化用戶與用戶社群的互動，提供更多的功能和使用可能性，特別是那些擁有更高規格的手機的人，這些手機可以提供更多高解析度的地圖和功能。所以對我們來說，特別是在現階段，這不是一個收入來源。我們相信，考慮到年初的情況，與去年同期相比，我們的遊戲獲利能力指導非常強勁。並且，我們的遊戲組合的整體規模在過去幾年中已經實現並且迅速擴大。

So I think it's very important for us to also focus on solidifying our user base and our game content and pipeline and capabilities, to focus on long-term growth and long-term maximization of the potential of the Free Fire platform and IP as well as the diversification of our genres across a further stronger spectrum.

因此，我認為對我們來說，同樣非常重要的一點是，我們要專注於鞏固我們的用戶基礎、遊戲內容、管道和能力，專注於長期成長，最大限度地發揮 Free Fire 平台和 IP 的潛力，以及在更強大的範圍內實現遊戲類型的多樣化。

Now in terms of e-commerce AOV, I think it's been slightly trending downwards, probably also because of entrance of new markets where the AOV tend to be -- the basket size might be smaller with a new market mix. And overall, I think our AOV has been relatively stable at high single, low double-digit range. It's -- sometimes it can fluctuate because of shopping season or seasonality of category mixes. So overall, I think that's been quite stable.

現在就電子商務 AOV 而言，我認為它略有下降趨勢，可能也是因為新市場的進入，AOV 往往在新的市場組合下，購物籃規模可能會變小。整體而言，我認為我們的 AOV 相對穩定在高個位數、低兩位數的範圍內。有時它會因為購物季節或類別混合的季節性而波動。所以總的來說，我認為這是相當穩定的。

So the AOV mix is not -- our overall AOV size is not a target for us. We don't have a KPI to say that we must drive up AOV. I think what AOV is the right mix for us depends on the markets that we have and our understanding of what users in those markets need and what categories really serve the users best and also might evolve over time as we focus on user growth. So on that front, I don't think it's necessary having a higher AOV is a right strategy for e-commerce platform. And singularly focusing on AOV could have a negative impact on the health and the long-term profitability of the e-commerce platform.

因此 AOV 組合不是——我們的整體 AOV 規模不是我們的目標。我們沒有一個KPI來規定我們必須提高AOV。我認為什麼樣的 AOV 對我們來說是正確的組合取決於我們擁有的市場以及我們對這些市場的用戶需求的理解，以及哪些類別真正能為用戶提供最好的服務，並且隨著我們關注用戶增長，這些類別也可能隨著時間的推移而發展。所以從這個方面來看，我認為電子商務平台沒有必要追求更高的 AOV 才是正確的策略。而單一關注AOV可能會對電子商務平台的健康和長期獲利能力產生負面影響。

This concludes our question-and-answer session. I would like to turn the conference back over to Min Ju Song for any closing remarks.

我們的問答環節到此結束。我想將會議交還給宋敏珠 (Min Ju Song) 做結束語。

Thank you, and thank you all for joining today's call. We look forward to speaking to all of you again next quarter. Thank you.

謝謝大家，也謝謝大家參加今天的電話會議。我們期待下個季度再次與大家交談。謝謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。